We are a GC doing a private commercial job in MN. Currently, we require Conditional waivers from our subs with each payment application they submit. We are currently working with a lender who is adamant about us requiring Unconditionals from our subs after each payment and before subsequent payments. We have a bit more leverage with Conditionals as subs must turn it in with their payment application, and then we know when it becomes valid because we directly pay them. Additionally, our subs are safer and more willing to sign a Conditional vs an Unconditional. We have offered to provide the bank with the Conditionals and then confirm payment with a check register as proof that those subs have been paid, but the bank is determined to get the Unconditionals. We are concerned that if ONE sub does not turn in an unconditional waiver or is late, it will delay owner payment to us and thus delay payment to the rest of our subs.
The bank is concerned about, and our question is: Is a lender who records a mortgage after construction starts at risk (of the sub being in first position for a lien) for the duration of the project? Managing the lien waivers - does the type matter or not if the lender is in 2nd position for a lien and if they do matter, does being in 2nd position get absolved as of a certain date?
We usually don't encounter this issue, but post-covid, A LOT of banks are now asking us for extra waivers and paperwork and pushing back on our solutions to mitigate that paperwork, while still ensuring and proving that we are tracking waivers and paying our subs. Every bank has a different request, and usually, they are fine with getting the Conditionals and check register as proof, but this bank is really pushing back because they are concerned about being in this "2nd position" for a lien, and say the Unconditional will protect them from that. We are pretty confused and are not sure how to proceed here. Any guidance or proposed solutions would be greatly appreciated.
...Read More
I am a snow removal sub contractor. I recently received a lein waver to sign for payment of my services. I have not been paid yet and the General contractor wants to have me sign a lein waver before he pays me. Is this legal? Sounds like I should get payment first before signing away my rights. I am located in Minnesota. What are your thoughts?...Read More
How long do I have to file a mechanic's lien on the property? What county: where work performed, or my business? What if partial payment was made, but balance due is not being paid? Deceased husband unable to finish project....Read More
What is the Minnesota statue that addresses the following:
Minnesota specifically forbids the waiving of the right to file a mechanics lien or make a claim against a payment bond prior to the actual receipt of payment. Any such waiver is void and unenforceable. However, the statute specifically notes that the waiver may be valid as to any third party that relied on the waiver to his/her own detriment....Read More
We get various lien waivers from our general contractors. Some have the invoice # listed on lien waiver for which the payment is being made. Even though the project may not be complete (we may do additional work and bill for that work), the payment is "in full" for the referenced invoice(s). In that case, how should I mark the lien waiver? As full and final for the indicated invoice(s)? Or partial?...Read More
I am a General Contractor, performed work for a homeowner, he requested paid in full lien waivers and I sent to him. He replied stating he wants my paid in full lien waivers to my material companies and subcontractors with the amount on it what I paid them
...Read More
I contacted a contractor to do a roof job out of pocket. The contractor suggested I had storm damage and that I should file an insurance claim. I did and in the end it went from a roof to a serious project worth over $70,000. At this point I don't want to work with the original contractor because it is a lot more involved.
I signed a contract with the contractor early on because he said he would not help me with the insurance claim unless I did. The contract contains a statement that says if I want to cancel the contract without legal right, and the project has not started that they would be entitled to "Actual Cost" and "Not as a penalty"
The contractor has never received any payment, has not ordered materials, or performed any work in relation to the claim.
I need to know if this contractor has any legal ground to file a lien against my property even though they didn't do any work....Read More
Our customer is requesting a final lien from our Suppliers on a projected. However, we generally do not pay our vendors until we are paid on the project. Also, these vendor have not yet even met the terms (net 30) in our system. What should I do? I am not sure who to respond to our customer.
Becky
...Read More
Our company is supplying labor for a subcontractor on a MN jobsite. The subcontractor is asking for our company to sign a conditional lien waiver prior to our receiving payment. My practice in MN has been to only waive rights once the payment is received and cleared the bank. What is best practice in this situation?...Read More
I'm currently working with Levelset on a lien. The customer gave me a check that's $4400 (lien amount) less than what it should've been. Once she receives the paperwork for the lien I'm afraid she will stop payment on the check I have (she's done it once already). Is it ok to deposit the check I have now to insure it clears before she gets the lien paperwork? By depositing it am I acknowledging that this check
is sufficient enough for the work I did? I'd like to deposit it now....Read More
I am a prime contractor on a commercial project. What dollar amount and which conditional waiver do I request when the subcontractor sends in their billing for 100% complete? In our state of Minnesota, 5% retention is withheld from progress payments.
The through date of the final billing (progress billing 2) is September 30, and is approved for 100% complete.
Revised Contract Amount is $36,869.00
Previously Approved Amount is $13,127.50
Complete through September 30, Progress Billing 2: 100%.
Current payment due is $21,898.05
Balance to finish (including 5% retainage) is $1,843.45
...Read More
I work for a construction company and I'm new to lien waivers. So, one of our project manager needed warehouse space for one of his project and we got an space from a company. There was a lease agreement and 3months and security deposit needed to be paid upfront. I sent payment that was required with the lien waiver. Our lien are condition waiver and release on progress payment. Fast forward, our payment has clear the bank but we still haven't received the lien waiver sent back. The company that we sent payment got their legal team involve and said since there was already a lease agreement before the lien waiver and also the lien waiver was not part of the lease agreement. It was not required. How do I go about why we required the lien waiver and explaining it?...Read More
We are a manufacturing company who uses third party manufacturing companies to build our products. We recently supplied a piece of equipment and the customer aka general contractor They asking us to fill out a very detailed conditional lien waiver before sending payment. However on the waiver they are asking for "all parties" who finished materials, supplies or labor to be listed, along with cost. Would we only list ourselves as we are the manufacture or do we need to list our third party manufacture and costs? Please see below for the exact verbiage.
"That all waivers are true, correct and genuine and delivered unconditionally and that there is no claim either legal or equitable to defect the validity of said waivers. That the following are the names of all parties who have furnished material or labor, or both, for said work and all parties having contracts or sub contracts for specific portions of said work or for material entering into the construction thereof and the amount due or to become due to each, and that the items mentioned include all labor and material required to complete said work according to plans and specifications:"...Read More