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Conditional and Unconditional Lien Waiver/Release Forms for Progress and Final Payments – Part 1

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Knowing which lien waiver/release form to use when on a construction project can be confusing at times.  This series of articles will help to clear up some of the questions.

Lien Waiver/Release FormsMake Sure The Forms From Your Vendors Are Accurate

Whether you’re a general or sub, it is imperative that you make sure the forms you collect from your vendors are legal and accurate – don’t and you’re risking a lien on the property and breaching your contract with your customer.

Helpful Tips

  • Photocopy checks before depositing them so that you have the information from the front. This allows you to verify that a check has cleared the issuing bank before you submit an unconditional release.
  • Invariably papers end up misfiled or not filed.  Include your internal job/account number on the form – if you find it laying somewhere you’ll know which job folder it belongs in.
  • In some states the forms are known informally as #1, #2, #, and #4.  They’re numbered in the order they’re used – kind of.

If you’re on an ongoing project then chances are you’ll use the forms in the order of #1, #2, #1, #2, #1, #2, and so on until the final payment when you’ll use the #3 and then the #4.

If you’re working on a quick project where you’ll be invoicing only once then chances are you won’t even use the #1 and #2, and instead just the #3 and #4.

  • If you’ll be on a project for more than one billing period fill in the redundant information on the form ahead of time.  Then save the form with the job name/number in the file name – for example: “Job 1234 Conditional Waiver and Release Upon Progress Payment Master”.

You’ll save yourself some time by using that master every time you need the form.

The first time you use it save it under the file name above replacing “Master” with “-01” (without the quotation marks).  The second time you use it replace “-01” with “-02”.  Follow this procedure through the entire project.

Ditto for the unconditional progress release.  Don’t worry about the final releases though (#3 and #4); typically those should each be used only once on a project.

Glossary

“#1” or “Conditional on Progress”: A form that releases your lien rights on a portion of the project provided the conditions on the form are met.

“#2” or “Unconditional on Progress”: A form that releases your lien rights on a portion of the project unconditionally.

“#3” or “Conditional on Final”: A form that releases your lien rights on the entire project provided the conditions on the form are met.

“#4” or “Unconditional on Final”: A form that releases your lien rights on the entire project unconditionally.

Release thru date: The date you’re invoicing through.  For example if you’re invoicing by month the “release through date” would be the last day of the month.

Successful payment: When the check has cleared the issuing financial institution.

Wet signature: An original signed document, not a photocopy.

I hope that you found this overview of lien waiver/release forms to be helpful.  In our second article in this five-part series we’ll discuss the #1 Conditional Waiver and Release Upon Progress Payment form in greater detail followed by articles for the #2, #3, and #4 release forms.

This article is an overview of waiver/release forms and is not legal advice.  Please contact an attorney in your state with any questions you might have.

 

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About Your Host:

Nancy Smyth, Certified QuickBooks ProAdvisor

Nancy Smyth, Sunburst Software Solutions, Inc.
QuickBooks Construction & Payroll Expert


I've been using and supporting QuickBooks products since the early 1990's. I've worked with thousands of contractors, assisting them with QuickBooks setup, Certified Payroll Reporting requirements, AIA Billing and Weighted-Average Overtime.


QuickBooks is a powerful product, but learning how to use it in your construction business can be difficult. I hope you find resources available here to be helpful.

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