Most if not all construction professionals in Arizona have heard of lien waivers. These are some of the most important construction documents, and they’re particularly significant during the payment process.
Project owners and higher-tier parties often require construction parties to hand in a lien waiver before payment gets released. If you’re a construction professional in Arizona, you should know that the state requires you to use a specific lien waiver form.
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This guide explains the basics of one of the four types of Arizona lien waiver, the Arizona Conditional Waiver and Release on Final Payment.
- When do you use an Arizona Conditional Waiver and Release on Final Payment?
- How to fill out an Arizona Conditional Waiver and Release on Final Payment
- Best practices before signing an Arizona Conditional Waiver and Release on Final Payment
When do you use an Arizona Conditional Waiver and Release on Final Payment?
Before you sign an Arizona Conditional Waiver and Release on Final Payment, make sure that these two criteria apply to your situation:
1. You are still waiting for your payment.
This Arizona lien waiver is a conditional waiver, so it must be used if you still have not received your payment. A conditional waiver takes effect only when payment is received and cleared in the bank. It protects you from releasing your lien rights without receiving your due compensation.
2. Your work on a project is all done.
This Arizona lien waiver is also a final payment waiver, which means that all your work is done and you will not be expecting any more regular payments in the future.
If neither of the criteria matches your situation, or if your work on a project is still ongoing and not yet final, you should consider signing another type of Arizona lien waiver.
Note that in Arizona, you are expected to use a specific lien waiver form for all lien waiver types. Aside from making sure that you are using the correct lien waiver, the other important concern is for you to use the proper Arizona lien waiver form as mandated by the state.
How to fill out an Arizona Conditional Waiver and Release on Final Payment
The Arizona Conditional Waiver and Release on Final Payment form must be of the following format:
Conditional waiver and release on final payment
Job No.: _______________
On receipt by the undersigned of a check from ________________
(maker of check)
in the sum of $_________________ payable to ____________________
(amount of check) (payee or payees of check)
and when the check has been properly endorsed and has been paid by the bank on which it is drawn, this document becomes effective to release any mechanic’s lien, any state or federal statutory bond right, any private bond right, any claim for payment and any rights under any similar ordinance, rule or statute related to claim or payment rights for persons in the undersigned’s position, the undersigned has on the job of ___________________ located at ______________________________.
(owner) (job description)
This release covers the final payment to the undersigned for all labor, services, equipment or materials furnished to the jobsite or to _________________________________________________________,
(person with whom undersigned contracted)
except for disputed claims in the amount of $__________. Before any recipient of this document relies on it, the person should verify evidence of payment to the undersigned.
The undersigned warrants that he either has already paid or will use the monies he receives from this final payment to promptly pay in full all his laborers, subcontractors, materialmen and suppliers for all work, materials, equipment or services provided for or to the above referenced project up to the date of this waiver.
Dated: ____________________ _________________________________
Filling out the form above is all about writing the following information in the appropriate blanks:
This is the identification name of the project, which can be the official project name, if available, or a project description that includes the project address.
2. Job No.
This is your contract number, if available, or just a simple project description with the project address.
3. Maker of check
This is the name of the party who issues your paycheque.
This is the payment amount you are expecting to receive.
5. Payee or payees of check
This is the name of the party to whom the check is given.
This is the name(s) of the owner(s) of the property.
7. Job description
This is the project location, which can be a legal property description or a simple street address.
8. Person with whom undersigned contracted
This is the name of the party who hired you for the project.
9. Date signed
This is the date when you sign the lien waiver.
10. Company name, Signature, Title
This is your or your agent’s information, including signature and official title.
Best practices before signing an Arizona Conditional Waiver and Release on Final Payment
1. Verify that you are using the correct Arizona lien waiver form
Keep in mind that Arizona is one of the states that strictly regulate their lien waivers. You must use the correct form as described in the Arizona Statutes; otherwise, your lien waiver may not be enforceable.
You may not modify the language in the waiver and try to customize it with your own provisions. It is best practice to stick to what the state law requires.
2. Double-check the accuracy of the information in your Arizona lien waiver
It may seem obvious, but you must still be thorough in filling out your Arizona lien waivers. Pay attention to the names of the parties involved. A business name must be written completely, including the appropriate suffixes (e.g. Ltd. or Inc.) and the amount under $ must correspond to the amount that you are expecting to receive.
3. Use a conditional lien waiver whenever possible
This waiver is a conditional type of lien waiver, so you have the advantage of being protected in case payments do not get cleared in the bank. When you use an Arizona unconditional final payment waiver, your lien rights are waived whether you get the final payment or not. If a cheque bounces, for example, you have little recourse to recover back your payment because you have already surrendered your lien rights. Using a conditional lien waiver protects you from dealing with this potential issue.