By Diane Dennis
But all of your release forms are valid you say?
That may be but what about the waiver release forms submitted to you by your subcontractors.
Subcontractors what about release forms from your sub-subs?
When receiving lien waiver/release forms from your contractors and suppliers don't rely on them at face value.
We all want to trust our Subs and believe the best of them. But in today's day and age that trust could be fatal to your company.
Call the issuing company(ies) and make sure the releases are legitimately from the issuer(s).
Speak with a supervisor, not a clerk, to make sure you get the straight scoop.
Consider the trusted, long-time subcontractor who hits a terribly rough patch in life. Whatever that rough patch might be you, yes YOU, can get burned beyond belief.
He splits town and no one is the wiser - until the supplier starts making calls looking for payment.
Think it's far-fetched? Unfortunately it's not. It happened.
The GC was a vendor of mine and the supplier happened to be my supplier as well.
Guess who had to pay for the materials a second time? The General Contractor ... (!!!)
His contract with his customer had a clause - a standard clause amongst most contracts - that stated that the GC would keep the customer's property free of liens (and you know that the subcontractor's supplier will file a lien if they don't get paid).
If the GC had confirmed the unconditional waiver/release form with his subcontractor's supplier he would have had a much better chance of catching up with the deadbeat sub.
Not that it's the GC's fault that he didn't expect to get scammed by his trusted sub but sadly in today's day and age you have to be ready for it.
Well, true but...
He's had this sub working for him for many years and all has been fine. He has no reason to suspect that things are about to go south.
So yeah it's really not the General's fault that he received a fraudulent release from his sub.
In a case like this the person at fault isn't the issue.
The issue is the clause in the GC's contract with his customer that states that he'll keep his customer's property free of liens.
You're not going to be able to remove that clause from your contract so you're going to have to be vigilant. No one wants to receive a fraudulent lien waiver release form but without following up on them that's exactly what you might be facing.
Then you get to pay for the material a second time.
Not the GC's fault but still the GC's responsibility...
As sad, and even as uncomfortable as it is, it's time to change your frame of mind from blind trust to "I better verify this before relying on it".
Attention subcontractors... This applies to you as well! You might have sub-subs who have suppliers or you might be dealing with a dishonest, embezzling employee of your supplier who issues you a forged unconditional.
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