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Lien Waivers Series: Conditional Progress waivers

Posted by Victoria Jennings

4/18/17 10:49 AM

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At zlien, we have many conversations with our customers about when to send waivers and which forms should be used. This series will cover the ins and outs of Waivers (also referred to as releases) by breaking down the different types and how they are used in the zlien platform. This post continues the series by covering conditional progress waivers. 

Why use a lien waiver

While lien waiver documents are an important part of the construction industry, these documents can be complex and are sometimes overlooked. Essentially, lien waiver documents state that you've received or expect to receive payment and waive future lien rights. The lien waiver is an important form of security for your customer and a great tool to provide more transparency as well as promote faster payment. 

One of the main purposes of a lien waiver is to provide protection to the paying party. In exchange for such payment, the lien waiver “waives” the payee’s right to file a lien for the exact value of the payment they have received. In essence, the waiver works as a receipt for payment that protects the paying party from paying twice.

You can always review our thorough guide to lien waivers and read part 1 in this series on Unconditional Progress Waivers. This post will specifically cover Conditional Progress Waivers.

conditional Progress Waivers: Defined

The paying party wants a lien waiver before handing over payment, and the receiving party wants payment before handing over the lien waiver. Heard of this before? The solution to this stand off is the “conditional” set of waivers.

More formally referred to as a Conditional Waiver for Partial Payment, this waiver should be used when you are expecting to receive a progress payment on the project

Because this is a “conditional” waiver, you may not have received the payment. That is okay. A conditional lien waiver is “conditional” on your receipt of the payment and will be invalid if payment is not ultimately received. If you have already received this payment in full, then you will likely want to consider signing an “unconditional” waiverConsidering conditional waivers are only valid once the payment has been made, parties should always send a conditional waiver with each invoice.

Generating conditional Progress Waivers Through zlien

zlien has created the Waiver Inbox, which allows you to electronically exchange lien waivers with confidence and ease. If you subscribe to zlien, you just have to log in to your account to get started on your first conditional progress waiver. As a subscriber, you can choose to use one of zlien's standard, state-compliant templates, or you can create your own template. Watch our 5 minute tutorial on generating waivers through the Waiver Inbox to get started today!


Topics: Best Practices, waivers