When it comes to the world of construction, there are a lot of moving parts to keep track of. You have to keep track of workers, equipment, materials, and timelines. One aspect of construction that is often overlooked is the process of lien waivers. A lien waiver is a legal document that is used to release someone’s rights to place a lien on your property. These waivers are important because they protect the property owner and anyone providing labor or materials from the risk of having a lien placed against them. In this article, we’ll discuss the different types of lien waivers and their importance in the construction industry.
Conditional Lien Waivers
A conditional lien waiver is a document that is signed by a contractor or subcontractor and given to the property owner before any work starts. This type of waiver is used to protect the contractor or subcontractor in the event that they do not get paid for their work. In this situation, the property owner is not liable for the work done by the contractor or subcontractor. The conditional lien waiver is conditional upon the receipt of payment for the work, and once payment is received, the waiver is no longer valid. It is important to note that this type of waiver does not cover any work that has already been completed.
Here is an example of a conditional lien waiver form:
Unconditional Lien Waivers
An unconditional lien waiver is another type of waiver that is used in construction. This type of waiver is signed after the work has been completed and the contractor or subcontractor has been paid. An unconditional lien waiver is used to release the property owner from any future claims that may arise due to the work done on the property. This type of waiver is often used when a property owner needs to refinance their property or when they are selling it. It is important to note that when signing an unconditional lien waiver, the contractor or subcontractor is giving up their rights to place a lien on the property even if they have not been paid for their work.
Here is an example of an unconditional lien waiver form:
Partial Lien Waivers
A partial lien waiver is a document that is used when only part of the work has been completed. This type of waiver is conditional upon the receipt of payment for the work that has been completed up to that point. Once payment has been received, the waiver is no longer valid for that part of the work. It is important to note that this type of waiver only covers the work that has been completed and does not cover any work that has yet to be done.
Here is an example of a partial lien waiver form:
Final Thoughts
Now that you understand the different types of lien waivers and their importance in the construction industry, it is important to ensure that you have the appropriate waivers in place for your project. Lien waivers protect both the property owner and the contractor or subcontractor from the risk of having a lien placed against them. While it may seem like just another form to fill out, it can save you a lot of headache down the road. Make sure to consult with your attorney or legal advisor if you have any questions about the use of lien waivers in your particular project.
