Exchanging lien waivers is a common practice in construction. Lien waivers allow project participants to surrender their lien rights in exchange for payment, and some property owners require parties to first sign a lien waiver before releasing payment.
In Arizona, lien waivers are state-regulated. This means that all lien waivers must follow a specific form, and failing to use the statutory forms is not acceptable — or at least your customized lien waiver will be ineffective and unenforceable.
Note that there are four types of Arizona lien waivers, but this guide explains all you need to know about signing an Arizona Unconditional Waiver and Release on Final Payment.
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- When do you use an Arizona Unconditional Waiver and Release on Final Payment?
- How to fill out an Arizona Unconditional Waiver and Release on Final Payment
- Best practices before signing an Arizona Unconditional Waiver and Release on Final Payment
When do you use an Arizona Unconditional Waiver and Release on Final Payment?
There are two criteria that you must meet before you sign an Arizona Unconditional Waiver and Release on Final Payment:
1. You have already received your payment.
Every time you sign an unconditional lien waiver, you must first verify that you already have the payment on hand. This type of waiver takes effect as soon as you sign the form, regardless of whether you get paid or not. If a cheque bounces and you have already signed this waiver, you may not receive your payment at all as you have already relinquished your lien rights.
2. You have received your final payment for a project.
This specific Arizona lien waiver applies for those who have received their final payment on a project. It means that your work on a project has wrapped up, and you are no longer expecting to receive any more regular paychecks in the future.
If you have received only a portion of your payment and your work on a project is still ongoing, consider signing an Arizona Unconditional Waiver and Release on Progress Payment. If you are unsure whether you have already received the payment or not, consider signing an Arizona Conditional Waiver for Final Payment.
How to fill out an Arizona Unconditional Waiver and Release on Final Payment
The first step is to ensure that form you are signing is the correct Arizona Waiver and Release on Final Payment, which is as follows:
Note that only the form above is the correct Arizona Unconditional Lien Waiver and Release on Final Payment. To fill it out, simply provide the following required information in the blanks:
This is the main identification of the project, which could be the official project name or a project description that includes the project address.
2. Job No.
This is the contract number of your project, if available. Otherwise, you may write the project description with the project address.
This is the amount that you received in exchange for signing this waiver. The amount should be your final payment.
4. Person with whom undersigned contracted
This is the party who directly hired you for the project.
This is the name(s) of the owner(s) of the property. You are allowed to write multiple names if there are multiple owners.
6. Job description
This is the project location, which can be a legal property description or a simple street address.
7. Date signed
This is the date when you sign the lien waiver.
8. Company name, Signature, Title
This is your or your agent’s information, including your or their signature and official title.
Best practices before signing an Arizona Unconditional Waiver and Release on Final Payment
1. Ensure that you have the correct lien waiver form
Remember that Arizona does not allow its construction parties to use just any type of waiver. Your Arizona Unconditional Waiver and Release on Final Payment must be the same as the form prescribed in Arizona Statutes. Before signing your lien waiver, you have to first make sure that your form matches what is required by the law to avoid any potential issues.
2. Ensure that you have received payment
Whenever you are signing an unconditional lien waiver, you always have to first verify that you have received the payment and that the money has been cleared in the bank. This is because unconditional waivers are enforceable regardless of whether payment is received or not. Signed cheques or credit card transactions may not go through, so you better make sure that you have the money before you revoke your lien rights.
3. Ensure that you are signing the appropriate Arizona lien waiver type
The Arizona Unconditional Waiver and Release on Final Payment applies when you have received your final payment on a project. This means that you are no longer expecting any additional payments in the future as your work on a project is already finished. If your work on a project is still in progress, you must sign an Arizona lien waiver for progress payment.