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Is Shawmut's lien waiver valid?

Shawmut Construction asks their subs to sign a lien waiver and send it with their payment application. Here's one of the lines from the waiver: "The undersigned has received payment in full, less Retainage, if any, for all labor, services, materials, fixtures, apparatus, and/or equipment furnished in the construction of the Project through the above Application for Payment Period and there are no outstanding claims against Shawmut Design and Construction, and/or its sureties, or the Subcontractor/Supplier, in connection with the Project." It sounds like they're asking me to say that I've already been paid...in order to get paid. Is it legal for them to ask a sub to sign this before payment is actually made?

1 reply

Aug 19, 2020

Massachusetts is one of the 12 states with a statutory lien waiver form, however the statutory waiver form is only applicable to a "Partial Waiver and Subordination of Lien" and there is no regulation of a party making a statement of "amounts due or paid to them." When evaluating a lien waiver, it is critical to determine whether the waiver is conditional or unconditional. Whether or not a lien waiver prior to payment is allowed is a different question, but if the waiver is conditional it is less crucial (as the waiver is not effective until payment is made). With respect to an unconditional waiver, which states that payment has been received, it is very important to make sure that payment has already been received. In many cases, what is said on the waiver os more important than what actually happened, so it is not generally best practice to say that payment has been made prior to that event actually occurring.

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