Home>Levelset Community>Legal Help>Waiver

Waiver

At what point in the process of building a house should the general contractor provide homeowner with waivers from the subcontractors? What type of waiver should homeowner receive, conditional or unconditional? No banks involved, paying cash for house.

2 replies

Feb 17, 2020

Best practice would be tho get the conditional waiver from the General contractor's sub-contractors prior to releasing payment to the GC. the conditional waiver will do 2 main things for you - (1) let you know the exact amount the sub is owed and (2) through what time period specifically. When you are about to pay the GC you can write a Joint check to the GC and the subcontractor for the amount of the conditional release OR you can make payment directly to the GC and ask them to provide you with an unconditional release from each subcontractor within 5 business days. If you are holding back 10% for retainage on the GC this will allow you to have some safety against non-payment by the GC. This is the same process the bank would follow if they were releasing draws to the GC so it should not be an issue for them to follow.

0 people found this helpful

Helpful

Feb 17, 2020

Adding to Scott's comments, I highly recommend that you require your contractor to submit a sworn statement with every pay application and that the contractor provide unconditional lien waivers that match the sworn statement with the following draw. As the Owner, you are also entitled to contact the subcontractors and suppliers listed on the Contractor's sworn statement to verify the numbers (contract amount, paid to date, etc) and to verify the validity of any lien waivers you've been provided. Forged waivers are not uncommon. The Contractor's sworn statement should include telephone numbers for the subs and suppliers listed.

0 people found this helpful

Helpful