Unconditional Lien Waivers Vs Conditional Lien Waivers

Beginning a big job and hiring a General Contractor in Florida you will need to go over Lien Waivers with the contractor that you have hired for your project. Lien waivers generally come in two forms: conditional and unconditional. In a nutshell, conditional lien waivers show how much money is owing through a particular date, and unconditional lien waivers show how much money has been paid for work through a particular date. In most states, lien waivers can be distinguished into 4 distinct types: Conditional Partial/Progress Waivers; Unconditional Partial/Progress Waivers; Conditional Final Waivers; and Unconditional Final Waivers. These are important to be knowledgeable in and to make sure that progress is being handled correctly. A lien waiver revokes your right to file a lien, while a lien release removes the effectivity of your existing mechanics lien. A lien waiver only touches upon your right to file a mechanics lien. Once you sign a waiver, you forego your option to record a mechanics lien should a payment dispute arise down the line. In this article we will discuss the difference in a Unconditional lien Waiver and a Conditional Lien Waiver, let’s get started!

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Unconditional Lien Waiver

We will go over what an Unconditional Lien Waiver is first and what they are and why you will need one. Unconditional lien waivers are provided by contractors or suppliers after they’ve been paid. The form immediately releases or waives the right to file a lien, as payment has already been made. These forms create two agreements: on the amount owed for the period in question, and that the amount has been paid. Typically, conditional lien waivers are submitted with every contractor and vendor invoice, while unconditional lien waivers are signed by these parties upon receipt of payment. Both types of waivers have two subcategories: waivers on progress payment and waivers on final payment. When you are filling out an unconditional lien waiver you will need to fill it out as follows:

  1. Name of Claimant. Name of Customer. Job Location. Owner. Exceptions. Contrary to the progress payment lien waivers, the final payment waivers of this type don’t include exceptions by default.
  2. Claimant’s Signature. Claimant’s Title. Date of Signature.

Lien’s are important because A lien provides a creditor with the legal right to seize and sell the collateral property or asset of a borrower who fails to meet the obligations of a loan or contract. The owner cannot sell the property that is the subject of a lien without the consent of the lien holder. It is important to have all the proper documents when you are working with a general contractor to protect you as well as them.

Conditional Lien Wavier

Now, to discuss what a Conditional Lien Waiver is and why you will need one. Conditional lien waivers are provided by contractors or suppliers before they’ve been paid. This means they are owed the money and will waive their lien rights once payment has been received. These waivers are often used as a form to show agreement on the amount owed for a certain time period. The purpose of a conditional waiver is a “Conditional Waiver and Release Upon Progress Payment” discharges all claimant rights through a specific date, provided the payments have actually been received and processed. An “Unconditional Waiver and Release Upon Final Payment” extinguishes all claimant rights upon receipt of the payment. When the claimant is required to sign a waiver and release in exchange for, or in order to, induce a final payment, and the claimant has not yet been paid. This release is only binding if there is evidence of payment to the claimant, you may need a different type of form for this. A conditional lien waiver for partial payment, also known as a “conditional lien release for progress payment”, is a contract used for surrendering a contractor’s right to file a lien on a property in the amount they have already been paid. Conditional waivers are often sent alongside invoices. This need to be filled out as follows:

  1. Name of Claimant. This is the name the party to be paid, and the party who will be signing the lien waiver document.
  2. Name of Customer.
  3. Job Location.
  4. Owner.
  5. Amount of the Check.
  6. Check Payable To.
  7. Exceptions.
  8. Claimant’s Signature.

The “Through Date” on the conditional waiver, the two progress payment forms now use the term “Through Date”, which indicates the date through which the claimant has provided labor, services or materials which are covered by the release, subject to the stated exceptions.

Taylor Builders; Conditional & Unconditional Waivers

Taylor Builders is a full-scale General Contractor servicing the Tri-County area of South Florida and beyond providing ground up construction and addition services. They are happy to go over waivers with you and to get you the lien waiver you are needed for the project at hand. If you are looking for a reliable General Contractor in your area contact Taylor Builders today!