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Conditional Waiver/Release Form Upon Progress/Partial Payment – Part 2

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When it’s time to submit an invoice for a partial / progress payment you may need to include a “Conditional Waiver and Release Upon Progress Payment” form (#1 release).

If you have suppliers you’ll probably have to include these same forms from them.

Once you’ve received payment and it has cleared the issuing financial institution then typically that Conditional Release becomes an Unconditional Release (#2).  That means you’ll never be able to file a lien for that time frame.

Lien Waiver/Release FormsState Requirements For Waiver / Release Forms

Each state has its own requirements for release forms.

California recently changed its mechanic’s lien laws requiring new wording on its release forms.  Keep an eye out for any possible changes in the requirements for the state(s) you work in.

Usually a #1 release requires information such as:

  • The claimant’s name
  • The customer’s name
  • The location of the project
  • The owner’s name
  • The “release through date”

It may also require info from the check such as:

  • The maker
  • The amount
  • The payee

Some states allow exceptions in the form.  Some examples:

  • Retentions
  • Extras not paid yet
  • Work previously invoiced for but not paid yet

Don’t Lose Your Lien Rights

It’s very easy to lose your lien rights.  Important points to help reduce that risk:

  • Never sign an Unconditional if you haven’t been paid
  • Be absolutely certain that you have the correct dollar amount and “release through date” (this will usually match your invoice)
  • Don’t use a form that doesn’t meet the state’s requirements

A Couple Tips

– Although the Conditional Waiver and Release Upon Progress Payment form usually “becomes” an Unconditional (#2) upon successful payment your customer will probably still require the #2 release from you once that payment has cleared.

– If you didn’t work on the project for that particular period then you may need to submit a release form (from you and your suppliers) for that time frame showing there’s no money owing.

And Finally…

After the form is filled out and the claimant has signed and dated it make a copy of it for your job files and send the original along with the invoice to your customer.

Be sure to include releases from any suppliers you have (make a copy for your files first).

I hope that you find this series of articles on lien waiver/release forms to be helpful.  In our next article, the third of five in this series, we’ll discuss the #2 Unconditional Waiver and Release Upon Progress Payment form.  Please see the first article in this series for definitions and tips.

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.

——————-

About the Author:  Diane Dennis – In 1999, after realizing there were so many contractors who were struggling with the day-to-day of their businesses, Diane Dennis – founder of InformedContractors.com – quit contracting (suspended ceilings) so that she could focus on serving contractors.

She now has four construction-related websites and she is rapidly becoming a top advocate for contractors in the United States.

With close to 20 years of experience in the world of construction contracting Diane continues to provide information that contractors need when they need it.  Find out more and claim your free gift here: http://www.InformedContractors.com/free-gift.html.

 

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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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