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Unconditional Vs Conditional Lien Waiver

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Anonymous contractor
Oct 14, 2020

Hi, I'm new to the flooring Sub contracting industry and I don't know the exact difference between a conditional and unconditional waiver? I think I'm just not fully grasping the concept for some reason. If our GC's require vendor waivers for the previous month, to be summitted during the current months billing, do I use a conditional or unconditional waivers? Also, if I want to bulk multiple months such as July and August to be submitted with October's billing, which waiver do I use?

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Anonymous contractor
Oct 14, 2020

The difference between an unconditional and conditional lien waiver is subtle, yet crucial! 

An unconditional waiver is a lien waiver that, upon execution, is binding and enforceable. In other words, once you sign the waiver, it effectively waives your lien rights; regardless if you've been paid or not.

Conditional waivers on the other hand, are the safer option. A conditional waiver is just as valid as it's unconditional counterpart; with one key difference. A conditional waiver doens't become binding (i.e. waive lien rights) until payment is received (the condition is met). These will typically include a reference to the party making payment, along with an amount and thename of the financial instutition from which the check will be drawn.

Another important thing to keep in mind that there are 12 states that regulate the form and content of lien waivers . If you are operating in one of these states, you must use the statutory form in order for the waiver ot be valid. If you aren't in one of these states, review the terms carefully; as some waivers contain additional language that could end up waiving more than you anticipated. 

Given how important lien waivers are in the construction industry, we have a ton of resources on the topic. Here's a few you may find helpful:

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Anonymous contractor
Oct 15, 2020
Thank you very much for the detailed response!
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