Supplier Lien Waiver: Fill & Download for Free

A lien waiver is a document signed by a contractor or supplier that “waives” their right to file a mechanics lien.It’s a little like the construction industry’s version of a receipt for payment. If a contractor pays you $50K, then you sign a lien waiver to waive $50K in lien rights.Lien waivers are very common in the construction industry because they help protect everyone involved, and they help prevent mechanics liens from getting filed.There are four main types of lien waivers:Partial ConditionalPartial UnconditionalFinal ConditionalFinal UnconditionalLearn more about each type in this blog post: Ultimate Guide to Lien Waivers.

Aside from Peyton Gambrell's excellent points, accepting that problems discovered once a wall or floor are opened up are your problems and your costs, not those of the contractor. Your contractor doesn't have a crystal ball, and does not know what shortcuts were taken by previous owners, contractors, the original builder, etc. You own the building "warts and all", and any discovered hidden defects are your costs to bear, and they can be substantial. Plan on it.There are certain instances when the contractor should have known a problem exists, but if you can't see it before work begins, why do you assume the contractor can? By and large, you will be on the hook. Keep track of changes through use of change orders with dollar amounts attached to them, so you don't get stuck with an unexpectedly large bill.Get lien waivers, signed statements from subs and suppliers that they have been paid before cutting that next check to the builder. ALWAYS. Good contractors will have them ready. Fraudsters and cheats will have a million excuses for just this once, I promise you.

Let’s say you want to build a new home, so you hire a contractor. But you don’t pay them for the whole house before they start working. Instead, you pay a deposit and then schedule monthly payments based on the percentage of work completed.In order to build the home, that GC needs materials (that are usually purchased on credit since they haven’t been paid enough to cover the costs yet.) The GC also hires a handful of subcontractors who also need materials.One month in, it’s time payment the GC. Before releasing any money, your home lender requires an inspection just to make sure everyone has completed what they said they have. They also require signed lien waivers—not just from the GC but from all of his subs and even some of the suppliers. Chances are the GC doesn’t know who all of the sub-subs and suppliers are so that takes some tracking down.Let’s say all of the paperwork is collected and the inspection goes well (which isn’t always the case). The money gets released to the GC who then has to write checks for all of the subs, who then pay their subs and suppliers.On average, it takes 73 days for the construction business to get paid. If you’re net 30 for materials and paying laborers biweekly, you’re way underwater by now.If you’re interested in learning more, this webinar does a great job of explaining this construction conundrum:Webinar On-Demand: Cash Flow - Things to Keep In Mind to Stay Ahead