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What should I do.

I'm currently working with Levelset on a lien. The customer gave me a check that's $4400 (lien amount) less than what it should've been. Once she receives the paperwork for the lien I'm afraid she will stop payment on the check I have (she's done it once already). Is it ok to deposit the check I have now to insure it clears before she gets the lien paperwork? By depositing it am I acknowledging that this check is sufficient enough for the work I did? I'd like to deposit it now.

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Oct 18, 2019

Negotiating payment in exchange for forgoing the mechanics lien process can be a tricky process, and exchanging a mechanics lien waiver for a check that you know may be canceled can be stress-inducing. But, keep in mind that it's all a negotiation - and that a mechanics lien may be the most powerful recovery tool in your arsenal. Depositing a check and foregoing future payment Whether or not to deposit a check can depend on a multitude of factors. But, when a check is given by an owner that purports to be full payment, depositing that check will likely act as the claimant's confirmation that they've been fully paid. So, if a claimant is unhappy with the check an owner has given them for final payment, then the claimant may not want to deposit that check right away. Levelset discusses this situation in great detail here: Are Checks with “Payment In Full” In Memo Field Legally Binding? Do They Effect Mechanics Lien Rights? Waiving lien rights when there's a chance the check will bounce A would-be lien claimant can always attempt to set their own terms as to when lien rights will be waived. When an owner has a history of shady-dealing on a project, it's completely understandable for an unpaid contractor to demand that payment be deposited before any lien rights be waived. Further, in a situation where partial payment will be accepted in exchange for foregoing lien rights, it's probably important to have a written agreement evidencing the arrngement anyway. So, on that document, a would-be lien claimant could always try and specify that no rights will be waived until payment hits their bank account. But, the safest way to proceed will generally be to agree that a lien waiver will be given when and only when payment has hit the claimant's bank account. And, it's entirely possible to make that official by putting the arrangement in writing.

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