Lien waivers are commonplace and provide much-needed protection for contractors, subcontractors, and material suppliers working on projects. They are an essential part of doing business in the construction industry. Simply put, these hard-working professionals do what they do professionally to get paid. The document is signed in exchange for payment, effectively surrendering the right to file a lien for the specified amount specified in the waiver.
Not all lien waivers are the same, and they are a common point of contention in construction projects. The smallest oversight or outright mismanagement can lead to serious disputes involving the payment of services and supplies.
Unconditional versus Conditional Lien Waivers
The type of waiver should match the payment process. Using the correct one is paramount. Unconditional waivers are used following payment. Conditional waivers serve as a promise of payment. Signing one when the other should have been used could create serious problems, up to not receiving compensation for the materials or job done.
Failing to Read the Waiver
Seasoned professionals who have signed countless, non-regulated lien waivers may sign them without looking over the specific language. Failing to take the time and read the document could result in smaller payments based on certain factors, added duties not part of the original contract, or being held personally liable for the work done.
Wrong Waiver Form
Lien waivers are a nationwide tool. However, Nevada is one of 12 states that regulate the actual form that has specific verbiage. Affixing a signature on one that does not apply to the particular state where the work is being done can create significant legal complications and lengthy payment delays.