Every construction professional must know when and how to sign a lien waiver. Lien waivers are very important in the construction business, and one must know what they are doing before they sign away their lien rights.
In states like Arizona, construction participants must use a specific form for their lien waivers. A customized lien waiver that is not the same as what is prescribed in the Arizona statutes cannot be considered valid in the state.
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This guide will explain the ins and outs of signing the Arizona Unconditional Waiver and Release on Progress Payment, one of the four types of lien waivers in the state.
- When do you use an Arizona Unconditional Waiver and Release on Progress Payment?
- How to fill out an Arizona Unconditional Waiver and Release on Progress Payment
- Best practices before signing an Arizona Unconditional Waiver and Release on Progress Payment
When do you use an Arizona Unconditional Waiver and Release on Progress Payment?
Before you sign an Arizona Unconditional Waiver and Release on Progress Payment, you must first ask yourself if you meet these two conditions:
1. You have already received payment.
This waiver is an unconditional type of waiver. This means that your lien rights with regards to this project will be revoked the moment you sign this document, regardless of whether you have received your payment or not. It is, therefore, best practice to first ensure that you have the payment on hand before you sign this Arizona unconditional waiver.
2. You are expecting more payments in the future.
This waiver is for progress payment, so you should have received only a portion of your full payment and your work on a project is still ongoing. Because this is a progress payment waiver, only a portion of your lien rights (effective up until a certain date) will be revoked.
If at least one of the two conditions above does not apply to you, consider signing a different type of Arizona lien waiver. If you are still waiting for payment, consider signing a conditional lien waiver; if you are already finished with the project, consider signing a lien waiver for final payment.
How to fill out an Arizona Unconditional Waiver and Release on Progress Payment
First, you have to verify that the Arizona Unconditional Waiver and Release on Progress Payment form you are using is exactly the same as the following:
Unconditional waiver and release on progress payment
Job No.: _________________
The undersigned has been paid and has received a progress payment in the sum of $_____________ for all labor, services, equipment or material furnished to the jobsite or to ______________________________________________________________
(person with whom undersigned contracted)
on the job of ________________________________________________
located at ___________________________________________________
and does hereby 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 above referenced project 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.
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.
Dated: ____________________ ________________________________
Notice: This document waives rights unconditionally and states that you have been paid for giving up those rights. This document is enforceable against you if you sign it, even if you have not been paid. If you have not been paid, use a conditional release form.
All statements included in the form above, most especially the Notice at the bottom, must be included in your Arizona Unconditional Waiver for Progress Payment. The Notice must be in a font size as large as the largest type on your form, according to Arizona laws.
When you have the correct Arizona lien waiver form, all you need to do is to fill in the blanks with the correct information:
This is the main identification of the project. If your project does not have an official project name, write an overall description that includes the project address.
2. Job No.
This is the contract number, if available.
This is the amount the you received in exchange for signing this waiver.
4. Person with whom undersigned contracted
This is the party who hired you for the project.
This is the name(s) of the property owner(s).
6. Job description
This can be a legal property description or a simple street address for the project.
7. Through date
This is the date that is covered by your lien waiver. All you services rendered up to this date may no longer be covered in a mechanics lien, so be very careful when writing this date.
8. Date signed
This is the date when you sign the lien waiver
9. Company name, Signature, Title
This is your or your agent’s information, including signature and official title.
Best practices before signing an Arizona Unconditional Waiver and Release on Progress Payment
1. Verify that you are signing the correct Arizona lien waiver
The Arizona Unconditional Waiver and Release on Progress Payment must be used only when you have received payment and you are expecting to receive more payment in the future for the same project. If you are still waiting for your payment when your work on a project is done, this waiver may not be the right lien waiver to use for your situation.
2. Ensure that you have received the payment
Remember that this is an unconditional lien waiver — if payment does not go through and you have already signed the form, you have little recourse for gaining back your lien rights. So before you sign this waiver, you have to be absolutely certain that you have the payment on hand. Note that cheques or credit card transactions do not count as actual payment unless the money has been cleared in the bank.
3. Make sure that the details written in your Arizona lien waiver are correct
Aside from making sure that the names and addresses are correct and properly spelled, you have to pay attention to the $ (amount being waived) and Through Date parts. The amount should correspond to the payment that you received for signing this waiver, while the Through Date determines the cut-off date covered by your lien waiver. Make sure that these details are correct before you sign the form.