Sat May 28, 2011, 9:47pm
Mechanics Lien Waiver FormsThe Word WAIVER means: the voluntary relinquishment, expressly or by implication, of some claim or right and can be a formal statement in writing of such relinquishment
A Mechanic’s Lien Waiver, releases Claims made by Lien holders, often called Claimants. Claimants are usually:
One of the most Common and Costly Mistakes a property owner makes is only having the General Contractor providing a Lien Waiver. The Property Owner is happy with the work; Receives the Waiver of Lien Release from the General Contractor, Pay’s the General Contractor and thinks that everything is perfect. The General Contractor doesn’t pay the Subcontractor’s.
For Example (Plumbers, Dry Waller’s, Carpenters and the Material Suppliers). This is becoming more and more common even with reputable General Contractors. The bad economy has hurt many Contractors; they have issue’s collecting monies owed to them and may have used your money to pay other Bills, hoping payment will come in from other Jobs that they have finished. A bankruptcy and everything comes crashing down. Even with proof that you have paid the Contractor in full, including all Subcontractors included in the Bill, the courts will frequently allow the Subcontractor’s to enforce their Mechanic’s Lien, especially if they have not been paid.
To protect yourself from Paying The Subcontractors again, it has become more and more common for Property Owners to have the Subcontractor’s Waive their rights to a Mechanic’s Lien.
To be effective, the waiver and release forms must follow substantially one of the forms. The four forms are:
Conditional Waiver And Release Upon Progress Payment
Unconditional Waiver And Release Upon Progress Payment
Conditional Waiver And Release Upon Final Payment
Unconditional Waiver And Release Upon Final Payment
These forms are binding if signed by the claimant or his or her authorized agent. The Signed form is effective to release:
The owner; The construction lender; and the surety (in the case of a payment bond).
Caution: in the case of a conditional release, the release is only binding if there is evidence of payment to the claimant. Evidence of payment may be demonstrated by:
The claimant’s endorsement on a single check or a joint payee check which has been paid by the bank upon which it was drawn; or Written acknowledgment of payment given by the claimant.