In construction projects, contractors routinely sign conditional waivers and releases when accepting progress payments from property owners. This allows work to continue while protecting contractor rights.
What Are Conditional Waivers?
A conditional waiver releases the contractor’s lien on the property and other claims for payment up to the date of the current progress payment. However, this waiver only takes effect if the owner meets certain conditions, such as:
- Making the progress payment in full and on time
- Contractor completed all required work covered by the payment
- Contractor submitted necessary invoices and documentation
Protecting Contractor Rights
If the owner fails to satisfy these conditions, the contractor may reinstate lien rights or claims against the property or owner. This protects the contractor if issues arise.
Tips for Contractors
Here are some key tips on conditional waivers and releases:
- Get waivers in writing, signed by both contractor and owner
- Clearly state payment amounts, dates, and scope of work covered
- Explicitly outline conditions necessary for waiver validity
- Review waivers carefully before signing to ensure favorable terms
The Benefit of Conditional Waivers
conditional waiver and release on progress payment allow construction to proceed while preserving contractor rights if owners breach payment terms. But contractors must closely examine waivers before acceptance to avoid accidentally giving up protections. Legal counsel can provide guidance on negotiating favorable conditional waiver conditions in construction contracts. Clear terms prevent misunderstandings down the road.
