Home>Levelset Community>Legal Help>Why am I ask to fill out so many waivers and especially if I am only billing one time for total contract amount.

Why am I ask to fill out so many waivers and especially if I am only billing one time for total contract amount.

This is in TN-I am dealing with a Owner that wants many Lien Waivers all of a sudden. I want to know the difference between an Interim Release and Waiver (is this a partial payment) and conditional final release. And is it correct that you do not sign a unconditional lien release until you have been paid in full. And can a subcontractor fill out same waiver as a Contractor. I can't find a simple TN subcontractor's lien waiver. I'm sorry but I am way overwhelmed over all of this-I am just not comfortable signing all of these.

1 reply

Sep 19, 2019

Mechanics lien waivers can be tricky, and it's completely natural to be wary of signing a lien waiver without fully understanding the impact of that waiver. I'll dive into more details below, but if you want to learn about mechanics lien waivers, here's a great place to start: The Ultimate Guide to Lien Waivers. Further, Levelset offers free, downloadable Tennessee lien waiver templates, which you can find here (about half-way down the page): Tennessee Lien Waivers Guide and FAQs Let's look at the basic lien waiver types for more clarity. Types of lien waivers Generally, there are 4 types of lien waivers. There are conditional waivers (only effective upon receiving payment), and there are unconditional waivers (waive lien rights immediately upon signing). Then, there are progress/partial waivers (meant for progress payments and/or when there are more expected payments on the job) and final waivers (used for final payment). Progress or partial waivers (also called "interim" waivers) are used for progress payments - but, if payment hasn't been received, it's typically a good idea to submit a conditional interim waiver. That way, lien rights aren't waived until payment is received. Once payment is actually in hand, a contractor or sub can confidently submit an unconditional interim waiver. Naturally, final waivers are more dangerous. A conditional final waiver won't be effective until the payment in the waiver is received. So, there tends to be less danger there as long as the correct waiver forms are being used (and as long as they're being properly utilized). But, a final unconditional lien waiver has the potential to waive all lien rights, regardless of whether payment has actually been received. So, it's best practice to only utilize a final unconditional lien waiver when full payment is in hand. Contractor vs. subcontractor lien waivers Contractors and subs typically use the same lien waiver forms. Some contractors and subs may have their own preferred waivers - and those waivers may make distinctions. But, by and large, it shouldn't matter all that much whether the form is for a contractor or a subcontractor. Technology can make exchanging mechanics lien waivers easier It's natural to be a little overwhelmed when a substantial amount of lien waiver requests are being made - but technology can help. More on that here: How To Handle Requesting & Tracking Lien Waivers. I hope this information has been helpful! Feel free to reply here or to post another question on the Expert Center if you have any additional questions.

0 people found this helpful

Helpful