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Partial lien waiver

Upon making progress payments, the owner or general contractor will generally require the contractor to waive all lien claims that the contractor may have for the work invoiced.

Practical pointers:

• the requirement and the form of partial lien waivers should be contained in the contract.
  
• Partial lien waiver are often used in conjunction with Affidavit of Contractor.

Final lien waiver

Upon completing the job, the contractor must usually complete a final lien waiver.

Practical pointers:

• The Fairness in Contracting Act provides that the requirement to sign a final waiver of claims in order to obtain final payment is void and against public policy, if the contractor has asserted a claim or request for an adjustment to the contract price. Ohio Revised Code §4113.62(B).
  
• Because of the Fairness in Contracting Act, no longer will contractors be caught between waiving a previously asserted claim, and getting paid for its work.

Protecting lien rights in contract and in waivers

Make sure lien waiver is contingent on payment, either partial or final. Only waive liens through the date of the invoice, not through the date of the payment.

Look for no lien clauses in your contract, and in the contract with the owner, if that contract is incorporated by reference.

Practical pointers:

• A no lien clause in the contract with the owner may be incorporated into a lower tier contract, if there is incorporation language in the lower tier contract.
  
• Such incorporation language is usually enforced. If a no lien clause is in the contract, try to negotiate it out of your contract.

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This site was last updated on November 02, 2006