By Diane Dennis
When you invoice, and/or get paid, on a construction project you'll almost always be required to provide a mechanics lien waiver, also commonly known as a "lien waiver form" and "lien release form".
There are typically four lien waivers in the series. The length of your project, how long it takes to complete it, will determine which of the four you'll use, and how often.
The ultimate goal of these documents is to allow you to incrementally release your lien rights on a construction project, as you get paid.
When you get paid you'll submit an unconditional mechanics lien waiver for that dollar amount. Using the "Progress" and/or "Unconditional" mechanics lien waiver rest of your lien rights remain protected while your customer is able to pay you on your invoice knowing that the portion of his property he's paying/paid for is now protected from liens.
The Conditional Waiver and Release Upon Progress Payment form is used when submitting your first invoice on a project that's lasting longer than one billing period.
When using this document, also known as the #1 lien waiver form/lien release form, if not careful you can inadvertently release 100% of your lien rights with this document, even without full payment, and have no recourse in regard to filing a mechanics lien.
The Unconditional Waiver and Release Upon Progress Payment form is used
when you've been paid on a progress invoice on a project that lasts
longer than one billing period.
Also known as the #2 lien waiver form/lien release form, this document is designed to release portions of your lien rights as you get paid on the project *but* as with the #1, if you're not careful you could release 100% of your lien rights with no hopes of ever being paid.
The Conditional Waiver and Release Upon Final Payment form is used only when you're submitting your final invoice on a project. If you're invoicing only once on a project then you won't use the #1 form because, while it is your first invoice on the project it's also your *final* invoice on the project.
If you use this document, also known as the #3 lien waiver form/lien release form, when you should be using a #1 instead yet again your lien rights, and rights to payment, are in danger.
The Unconditional Waiver and Release Upon Final Payment form is used when you're collecting the final payment on the project.
When you use this document, also known as the #4 lien waiver form/lien release form, you do indeed release all of your lien rights on the project. Use this form *only* after receiving final payment on a project.
Any entity working on a construction project that has lien rights will undoubtedly be required to submit mechanics lien waivers.
You'll always submit them with your invoices, to your customer(s).
Typically every supplier, subcontractor, and direct contractor will submit lien waiver/release forms to their respective customers.