States like Arizona regulate the use of lien waivers. This means that for a lien waiver to be valid, it has to follow the exact format prescribed under Arizona statutes. This way, nobody can write sneak provisions in a waiver that might put either the owner or the construction party at a disadvantage.
It is very important that you know when and how to sign Arizona lien waivers. This guide answers frequently asked questions about signing one of the four Arizona lien waivers: the Arizona Conditional Waiver and Release on Progress Payment.
- When do you use an Arizona Conditional Waiver and Release on Progress Payment?
- How to fill out an Arizona Conditional Waiver and Release on Progress Payment
- Best practices before signing an Arizona Conditional Waiver and Release on Progress Payment
When do you use an Arizona Conditional Waiver and Release on Progress Payment?
There are two conditions that you must meet before you sign an Arizona Conditional Waiver and Release on Progress Payment:
1. You have not yet received your payment.
Signing a conditional waiver means that you will relinquish your lien rights only on the condition that you get paid for your work. As long as you have not yet received your payment, always sign a conditional type of lien waiver in Arizona.
2. Your work on a project is in progress.
This waiver is for progress payment, so it applies to you only if you are expecting more payment in the future. Use a progress payment waiver when your work on a project is still ongoing.
If you do not meet one or both of the conditions above, consider signing a different type of Arizona lien waiver.
It is also important to consider that signing a conditional waiver is always better than signing an unconditional waiver. Even if you have already received a cheque or processed a credit card payment, the payment may still not go through in the bank. A conditional waiver protects you from rejected payments as the waiver only takes effect once you have actually gotten paid.
How to fill out an Arizona Conditional Waiver and Release on Progress Payment
Your Arizona Conditional Waiver and Release on Progress Payment must first be in the following form:
Conditional waiver and release on progress 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 that the undersigned has on the job of ______________________________________________________________
located at __________________________________ to the following
extent. This release covers a progress payment for all labor, services, equipment or materials furnished to the jobsite or to ______________________________________________________________,
(person with whom undersigned contracted)
through _______________ only and does not cover any retention,
pending modifications and changes or items furnished after that date. Before any recipient of this document relies on it, that 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 progress payment to promptly pay in full all of 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.
Date: ____________________ _________________________________
Note that only the form above is the correct Arizona Lien Waiver and Release on Progress Payment. To fill it out, simply provide the following required information in the blanks:
This is the identification name of the project. You may write the official project name, if applicable, or a project description that includes the project address.
2. Job no.
This is your contract number, if available. You may also write the project description with the project address.
3. Maker of check
This is the name of the party who is issuing the check for your payment.
This is the amount of payment that you are receiving.
5. Payee or payees of check
This is 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. You may write 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. Through date
This is the date until which your lien rights coverage will be waived. All your work before and up to this date will no longer be lienable once the waiver takes effect.
10. Date signed
This is the date when you sign the lien waiver.
11. 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 Progress Payment
1. Ensure that all the details in your lien waiver are correct
Double- and triple-check the spelling of the names as well as the accuracy of the information that you write in every lien waiver. This may seem pretty obvious, but some construction parties write the incorrect amount or the wrong Through Date and they end giving up a bigger part of their lien rights. Also make sure that you are using the correct lien waiver form as prescribed by Arizona laws.
2. Do not sign a blank Arizona lien waiver
If you are given a lien waiver and you are asked to sign it in exchange for payment, make sure that you fill all the blanks before you sign the form. If you sign a blank lien waiver, someone might fill in the information for you and you might end up “approving” something without your knowledge. Do your due diligence and make sure that you have all the blanks filled.
3. Use a conditional lien waiver rather than an unconditional lien waiver
Signing an Arizona Conditional Waiver and Release on Progress Payment is better than signing its unconditional counterpart. If possible, always sign a conditional type of lien waiver in Arizona as it gives your protection in case payment does not go through. A cheque may bounce, for example, and you want to keep your lien rights intact until payment is settled.