Conditional Waiver / Release Upon Final Payment – Part 4
When it’s time to submit the invoice for the final payment you may need to include a “Conditional Waiver and Release Upon Final Payment” form (#3 release).
Usually this release form does not include a “release through date” like the #1 and #2 forms do because it’s your final invoice on the project.
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. That means you’ll never be able to file a lien on the project (which is okay as long as you’re paid in full).
State Requirements For Waiver / Release Forms
Each state has its own requirements for release forms. Although many are similar it’s still important to make sure the forms you are using meet the state’s requirements where the project is located.
Usually a #3 release requires information such as:
- The claimant’s name
- The customer’s name
- The location of the project and the owner’s name
It may also require info from the forthcoming check such as:
- The maker
- The amount
- The payee
Some states allow exceptions in the release forms but when it comes to the final release forms the exceptions can be minimal (or even nonexistent). Read and understand what you’re signing before you sign it.
Don’t Lose Your Lien Rights
It’s very easy to lose your lien rights. Important points to help reduce that risk:
- Don’t use the Conditional Upon Final release form unless it truly is the final payment you are invoicing for
- Don’t forget to list any disputed claims that might exist (if allowed)
- Make sure the form meets the state’s requirements
A Couple Tips
– Although the Conditional Waiver and Release Upon Final Payment form usually “becomes” an Unconditional (#4) upon successful payment your customer will probably still require the #4 release from you once that payment has cleared.
– If your customer wants you to do more work after you’ve submitted this form to them chances are you’ll need to treat it as a new job and do everything you had to do originally (e.g. new contract; new preliminary notice; etc.).
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 fifth and final in this series, we’ll discuss the #4 Unconditional Waiver and Release Upon Final Payment form.
Previous articles in this series:
- Part 1 – Conditional and Unconditional Lien Waiver/Release Forms for Progress and Final Payments
- Part 2 – Conditional Waiver/Release From Upon Progress/Partial Payment
- Part 3 – Unconditional Waiver/Release Form Upon Progress/Partial Payment
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.
One Response to Conditional Waiver / Release Upon Final Payment – Part 4
Leave a Reply
- Using Account Numbers in Your QuickBooks Chart of Accounts
- The Great Debate – QuickBooks Desktop vs. QuickBooks Online
- Calculating & Displaying Fringe Benefits on a Certified Payroll Report
- QuickBooks Creating a More Meaningful Payroll Expenses Section
- QuickBooks Payroll Tip - Tracking Employee Advances or Loans
- QuickBooks Tip - Job Costing Starts With A Simple Item
- QuickBooks Tip-Handling Employee Reimbursements for Expenses
- Straight from the IRS - Social Security Tax Reduced to 4.2%
- How To Turn On and Use Manual Payroll in QuickBooks
- Create a QuickBooks Job Cost Report With Hours & Payroll Costs
- QuickBooks 2013 Upgrade Do's, Don'ts & Frequent Questions
- QuickBooks for Contractors Tip – Basics of Progress Invoicing
- QuickBooks Tip - Determing Cost of Goods Sold
- Welcome to the QuickBooks for contractors blog
- QuickBooks 2012 - Frequently Asked Questions About Upgrading
- QuickBooks Tip-Creating a Functional Payroll Liabilities Section
- QuickBooks Tip: Important Facts About Items Left as Billable
- QuickBooks 2015- The Good, Bad and Ugly, Part 1
- QuickBooks Tip - Child Support Garnishments
- QuickBooks for Contractors Tip – Advanced Progress Invoicing