we are a supplier/manufacturer. we have a contract with a subcontractor to provide some material. We do not have a contract with the GC. our customer has been asking for a lien waiver but keeps insisting we need to sign off on it as if it says we are dealing with them and with the GC. (They want us to sign a notary statement about their payment applications to the GC.) This doesn't seem right since we are not a party to the prime contract. What are our next steps in this situation?
Can someone answer this question please?? It has been three weeks since I asked it. The customer is still fighting with us over this.
Yes, think carefully. Signatures are very important. Weigh the risks before signing any contract. But what if you don't sign the document? If there is no major loss, you can cancel this contract with the existing customer. And if you need more help to be sure of the law, you should find a lawyer to look into this matter. Lawyers will have enough expertise to advise you. Because my knowledge is too little. And no expertise. So I can only give you that advice. Hope it helps you Drift F1
Lien waivers are an important part of the construction payment process, and should be executed with caution. That being said, lien rights exist on the project as a whole. A general contractor is typically the one in charge of requesting waivers from all their subs, who in turn, collect waivers from any of their subs and suppliers; to reassure the property owner that no liens will be filed against their property.
As a supplier to a subcontractor on the project, you are presumably entitled to file a mechanics lien if you are unpaid for the materials furnished. A subcontractor requesting a lien waiver from their supplier in exchange for payment is fairly standard practice.
Here are some articles that provide some additional context and information
First, note that Oregon is in the majority of states in that there aren't really any statutory guidelines for what a lien waiver form should look like. So, parties can generally draft waivers how they see fit, there. Further, note that Oregon is not a state where notarization is required on lien waivers. So, if notarizing the document gives you pause, the notary block can likely be removed from the Oregon lien waiver.
As for the "three party" waiver, I'm not entirely sure I follow. But, if your customer is insisting you put false information on the lien waiver, it's generally a bad idea to sign and/or notarize a document you know to be false. Instead, it might be wiser to draft a waiver document that's accurate and mentions both your customer (the sub) and their customer who hired them (the GC).
Finally, if your customer cannot agree on a more reasonable waiver form, it might be wise to try and open up a conversation between all of the involved parties - you, the sub, and the GC. By doing so, you could get another party's input and better understand what's being asked of you. In all likelihood, the GC will not be asking other parties to lie on their pay apps or waivers.
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