I am performing some electrical work for a General Contractor for a residence of my friend. The GC wants me to provide a lien waiver so he can get the draw from the bank in order to pay me. Shouldn`t the waiver come after the payment? (Sort of a reciept?)
If I give him the waiver can I specify that I have not recieved any payment and that a final waiver is dependent on payment?
Can the waiver be a “partial” waiver, like maybe 50% of the total bid?
How should I proceed? I would like to get paid and dont want to screw up the GCs draw from the bank. I also don`t want to get screwed.
Yes your waiver can be partial up to the amount of work you have completed and are asking for payment for.
I generally do not release a check until I receive the waiver. I have a feeling that this is SOP. You present the lien waiver, you get your check. However, if you are worried and you don’t receive your check when you present your lien waiver, the GC would have to produce a cancelled check as proof of payment, if you need to sure him to get the money. So there is your “check and balance”
its not a problem for the GC if he already has the money to pay you. If he’s counting on the funds from the draw to pay you, then he has a chicken and egg problem. If you have completed all of your work, one solution would be for the relase to say “upon payment of $X, I hereby release the lien etc.”. Then the GC’s bank can cut a check to you for that amount, and a check to the GC for the balance.
WAIVER OF LIEN
On [date] , [name of claimant] , of [address]
, City of [city] , County of [county],
State of [state] , entered into a contract with [name
of owner] , to furnish [description of labor and
materials] for the [construction or work performed]
on property owned by [name of owner] , of [property
address where work was performed], the description of which
is as follows:
In consideration of [amount] Dollars,
($ ), receipt of which is hereby acknowledged,
[claimant] hereby waives any right to claim a mechanic’s
lien against the above described property, or any
improvements thereon, in order to secure payment for the
services he has furnished under the herein mentioned
contract. ** I realize this is a lien waiver for partial completion. A cancelled check will be proof of payment for 50% of the agreed original bid. Further, a final lien waiver will be issued for the remaining 50%
at a future date.**
This waiver has been executed by [claimant] voluntarily
and with full knowledge of the rights afforded him under
the laws of the State of [state]
Dated:________________________
______________________
[Signature]
I added the bolded wording. You think it would be acceptable?
IANAL, and you should probably consult one, but the purpose of a lien is to make sure that you get paid. If you hand over a lien waiver without having a check in your hand, you are signing away any leverage you have for payment. If the GC can’t get his money to pay you until you sign a form that you’ve already been paid, that’s poor money management on his part.
From WI state statutes;
**779.05 Waivers of Lien
(1) Any document signed by a lien claimant or potential claimant and purporting to be a waiver of construction lien rights under this subchapter, is valid and binding as a waiver whether or not consideration was paid therefore and whether the document was signed before or after the labor or material was furnished or contracted for. Any ambiguity in such document shall be construed against the person signing it. Any waiver document shall be deemed to waive all lien rights of the signer for all labor and materials furnished or to be furnished by the claimant at any time for the improvement to which the waiver relates, except to the extent that the document specifically and expressly limits the waiver to apply to a particular portion of such labor and materials. A lien claimant or potential lien claimant of whom a waiver is requested is entitled to refuse to furnish a waiver unless paid in full for the work or material to which the waiver relates. A waiver furnished is a waiver of lien rights only, and not of any contract rights of the claimant otherwise existing.
(2) A promissory note or other evidence of debt given for any lienable claim shall not be deemed a waiver of lien rights unless the note or other instrument is received as payment and expressly declares that receipt thereof is a waiver of lien rights.**
anyone care to elaborate?