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Title company on a job refuses to release payment without Waiver- Can they do that?

IllinoisLien Waivers

Is it ok to provide a final waiver to a title company who will be issuing payment, prior to payment being received ? Located in Illinois. Is this a risk when its a title company? or is this a pretty safe bet when its a reputable title company?

1 reply

Apr 24, 2020
Providing a final unconditional mechanics lien waiver before getting paid is always a risk, regardless of how reputable the company is. And, requesting to use a final conditional mechanics lien waiver would be much safer, and honestly, more appropriate if payment hasn't been made. A conditional lien waiver is just as effective as an unconditional one - with the only difference being that it's not effective until payment is actually made. But, coupled with proof that payment was given for the waiver, it's just as valid as an unconditional waiver. What's more, if necessary, offering to submit a conditional waiver before you've received funds, then to follow up with an unconditional waiver might ease their fears, too. With that being said, it's absolutely common for a contractor to issue a final unconditional lien waiver before they're actually paid - especially when they trust the party who will be making payment. But, that doesn't make it a safe practice. For further discussion on conditional and unconditional waivers, this article has great info: Unconditional Lien Waivers vs Conditional Lien Waivers. For more on Illinois' lien waiver rules, and for free downloadable waiver templates - this page will be useful: Illinois Lien Waivers Guide and FAQs.
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