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Unconditional vs. Conditional Lien Waiver

We have a project that the customer sent us an “Unconditional Lien Waiver” for along with a photo copy of the check. The check amount includes a 10% retainage withholding. Shouldn’t this be a “Conditional Lien Waiver”? Also we have some change orders to submit and want to preserve our lien rights until these are paid also. Please advise.

1 reply

Feb 13, 2020

Ultimately, that's the tension that comes with submitting lien waivers. Customers want them before making payment, and parties submitting a lien waiver want to wait until payment has been made. As you mention above, using conditional lien waivers is a fair way to split the difference. A conditional lien waiver won't be effective until payment has been made - so, it's a much safer option to submit a conditional lien waiver if payment isn't in hand. Further, note that - unless there's an exceptions section on the waiver that can reserve retainage rights - submitting a final conditional lien waiver might be riskier than a partial/progress conditional lien waiver. Depending on the language featured on the waiver, a claimant could end up unintentionally waiving their retainage rights. Regarding change orders - that's another example of rights that might be preserved with an exceptions section. And, as you mention above, parties should be mindful of change orders when submitting a waiver - otherwise, rights pertaining to change orders might end up being waived, too.

Ohio construction businesses are free to negotiate what waivers they'll use

With all of the above in mind: Ohio construction businesses are free to negotiate what waivers will be used. And, while that can be tense, it's up to the parties involved to agree on what waivers will be used. Here are Levelset's free, downloadable lien waiver forms. I've included all 4 types so you can take a look and ultimately determine which waiver type might make the most sense for you. - Ohio Partial Conditional Lien Waiver Form - Ohio Final Conditional Lien Waiver Form - Ohio Partial Unconditional Lien Waiver Form - Ohio Final Unconditional Lien Waiver Form

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