Delaware Unconditional Waiver and Release Upon Progress Payment: When to Sign and Best Practices

Construction participants are often asked by their clients to sign lien waivers in exchange for payment. Once they sign a lien waiver, they get paid and forego their lien rights. By relinquishing your lien rights, you assure property owners that you will not file a mechanics lien as long as you receive your payment.

Some states like California have statutory lien waiver forms. States like Delaware, however, do not. This means that Delaware lien waivers may not have warning statements that remind you of what exactly you are waiving once you sign a lien waiver.

This guide walks you through some tips and tricks on how to sign a Delaware unconditional lien waiver and release upon progress payment.

When do you use a Delaware Unconditional Waiver and Release Upon Progress Payment?

If you intend to sign a Delaware Unconditional Waiver and Release Upon Progress Payment, make sure that the following situations apply:

• You are not yet finished working on a project.
  
  This is a progress payment waiver, so your work on a project should still be in progress. You are only waiving a part of your lien rights, but you expect future payments for the project.
• You already have the payment on hand.
  
  This is also an unconditional lien waiver, so you must have already received the payment. An unconditional lien waiver takes effect regardless if you got your payment or not – before you sign this lien waiver, make sure that you have the money on hand. Otherwise, you will waive your lien rights without getting paid.

You should keep in mind that credit card transactions and bank cheques may get rejected. Before you sign an unconditional lien waiver upon progress payment, make sure that the payment has been cleared in the bank.

How to sign a Delaware Unconditional Waiver and Release Upon Progress Payment?

Take note of these steps when signing a Delaware lien waiver for unconditional release upon progress payment:

1. Make sure that you are signing the correct lien waiver

   Delaware has no statutory lien waiver forms, so lien waivers may not be explicitly labeled. To know that you signing a Delaware unconditional lien waiver upon progress payment, take note of the following tells:

   • The waiver is effective immediately

     If a waiver takes effect immediately or if it lacks a conditional statement that says the waiver will only be binding once payment is actually released, you are signing an unconditional lien waiver.

   • The waiver asks for a “through date.”

     A through date specifies the coverage of your lien waiver. All the services you performed up to this date should have already been paid and may therefore not be the subject of a mechanics lien claim. A progress payment lien waiver in Delaware should ask for this through date.

2. Make sure that important details are included in the lien waiver form

   Since Delaware does not have statutory lien waiver forms, there are no specific details that must be written on a lien waiver in order for it to be valid. Generally speaking, however, a lien waiver upon progress payment asks for the following information:

   • The name of the property owner
   • The name of the hiring party
   • Your name, address, and signature
   • A description of the property location
   • A description of the services you furnished to the project
   • A through date
   • The amount of payment you are expecting to receive for signing the waiver
   • A list of the lien waivers that you have signed, if applicable

   Remember that the through date must align with the amount of payment that you have received in exchange for signing the lien waiver. Note that all services you performed through this date will not be lieanable once the lien waiver is signed. You can also generate and sign an unconditional waiver and release upon progress payment form for Delaware on Handle.com.

Best practices before signing a Delaware Unconditional Waiver and Release Upon Progress Payment

1. Use a conditional lien waiver form instead

   A conditional lien waiver form takes effect only once payment is made. If you do not receive payment, you still have your lien rights intact. On the other hand, an unconditional lien waiver takes effect as soon as it is signed. If a payment does not go through, you will still lose your lien rights. It is therefore best practice to sign a conditional lien waiver over an unconditional lien waiver.

2. Ensure that you have your payment on hand

   This is an unconditional lien waiver so once you sign it, you lose your lien rights regardless if you get paid or not. To avoid having issues, make sure that you have the payment on hand before you sign this lien waiver. Having a payment on hand means that you have the money in the bank and the transaction has been approved and cleared.

3. Make sure that the Through Date is accurate

   The Through Date determines the coverage of your lien waiver. All the services you perform after this date may still be subjected to a mechanics lien if payment is not made. Meanwhile, everything you performed before this date should have already been paid so you no longer have lien rights over them. Always double-check to make sure that this date is accurate.

Further reading

• Delaware Preliminary Notice: Why It’s Always a Good Idea to Serve It
• Delaware Notice of Intent to Lien: Benefits of Filing
• Delaware Conditional Waiver and Release Upon Progress Payment: When and How to Send