- A conditional lien released is typically used when the work to be completed on a property is to be paid in installments to the contractor. Each time an installment has been paid a conditional lien release should be signed for all contractors and subcontractors that have been paid for the work completed. An unconditional lien release is typically used when the job is paid in one lump installment at the end of the job.
- A conditional lien release is only good when the contractor or subcontractor has been paid for the work that has been completed. If the contractor or subcontractor does not receive payment, the conditional lien does not restrict these individuals from filing a mechanics lien against the home. An unconditional waiver states that the contractor has been paid or is the process of being paid, for example a check in the hand. The unconditional waiver states that no lien can be filed, even if the check is returned for nonsufficient funds.
- A conditional lien release is only good when there is proof that the contractor has received the funds. This proof is in one of two forms, either a copy of the cancelled check that has cleared or through a written statement provided by the contractor. It is advisable not to pay contractors in cash and if so require a written statement on letterhead immediately. Keep the proof in case a mechanics lien is placed against the property or require an unconditional lien release be signed. With unconditional liens there is no concern about providing proof of payment.
- Final payment is the last draw at the completion of the project. Certain items may still remain unfinished due to exterior weather conditions that are held in escrow until the work can be completed. If conditional waivers had been used through the process, the last payment should be accompanied by an unconditional release if at all possible. The unconditional release has more protections to the individual to protect against any mechanic liens.
Payment
Release
Proof
Final Payment
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