Dealing with a mechanics lien can be difficult both for the property owner and the lien claimant. This is why it is common for property owners to ask construction participants to hand over a lien waiver before payment is exchanged.
When a construction participant signs a lien waiver, they are essentially relinquishing their lien rights over a specific amount of their services. This way, property owners are assured that as long as payment is released, no mechanics lien will be filed against their property.
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In Nevada, lien waivers are statutorily regulated, which means that construction parties must use specific lien waiver forms. This guide explains everything you need to know about one specific type: the Nevada Conditional Progress Payment Waiver.
- When do you use a Nevada Conditional Progress Payment Waiver?
- How to fill out a Nevada Conditional Progress Payment Waiver
- Best practices before signing a Nevada Conditional Progress Payment Waiver
When do you use a Nevada Conditional Progress Payment Waiver?
A Nevada Conditional Progress Payment Waiver must be used when you meet the following criteria:
a. You are still awaiting payment.
A conditional waiver is used when you still have not received payment, so the waiver will only take effect on the condition that you get paid. Keep in mind that even if you have gotten a blank cheque, you must still wait for the money to be cleared in the bank. You must always use a conditional waiver unless you are absolutely sure that payment is on hand.
b. You are expecting more payment in the future for your continuing work in the project.
This waiver is for progress or partial payment, which means that your participation in the project is ongoing and you will be receiving more payment in the future. In other words, the payment that you will be getting in exchange for signing a conditional progress payment waiver is not yet your final or full payment.
You must use a Nevada Conditional Progress Payment lien waiver if you meet the two conditions above, although it is generally a good idea to sign a conditional type of lien waiver regardless of whether you have received payment or not. A conditional waiver gives you an assurance that your lien rights will remain protected until you receive your payment.
Also, note that progress or partial payments apply only if your work on a project is ongoing. If you are done working on a project and there are disputed claims that you want the property owner to honor in the future, consider signing a final payment waiver.
How to fill out a Nevada Conditional Progress Payment Waiver
It is very important that you use the correct lien waiver form in Nevada. Using a customized form with your own statements and without including all the necessary information is not allowed in Nevada, so your customized lien waiver is effectively invalid.
The correct and only acceptable form for the Nevada Conditional Progress Payment Waiver must be the exact same form pursuant to what is prescribed in Nevada Revised Statutes § 108.2457:
The form above has all the required statements as mandated by Nevada state laws, and all you have to do is to fill in the blanks accordingly:
a. Property name
Write the designated name of the project or the street address of the project location, if there is no official project name.
b. Property location
Write the street address of the project location or the legal property description, if available. Note that using a legal property description is generally not a requirement when filling out Nevada lien waivers.
c. Undersigned’s customer
Write the name of the party who hired you. Business names must be written in full, including the appropriate suffix, such as Ltd. or Inc.
d. Invoice/payment application number
Write the invoice or payment application number that applies to the partial payment that you are expecting to receive.
e. Payment amount
Write the amount of the partial payment that you are expecting to receive. The amount written here must match the amount written on the invoice that you specified in the previous item.
Write the date when you sign the lien waiver.
g. Company name
Write the name of your company or business. All business names must be written in full.
h. Your or your agent’s name (By)
Write your name and signature. If an authorized agent is signing on your behalf, they must write and sign this part.
i. Your or your agent’s title (Its)
Write your job title or the job title of your authorized agent.
Best practices before signing a Nevada Conditional Progress Payment Waiver
1. Ensure that you are using the appropriate Nevada lien waiver
The Nevada Conditional Progress Payment Waiver is specifically for those who are still waiting for partial payment to be given to them. Even if you think you have the payment on hand, signing a conditional lien waiver is a good idea so you do not run the risk of losing your lien rights and not getting paid.
2. Ensure that you are using the correct Nevada Conditional Progress Payment form as prescribed by Nevada laws
You may not make your own custom Nevada lien waiver, so be sure that you are using the exact form as prescribed in Nevada’s Revised Statutes. Using the wrong form is not accepted in Nevada, which means that even if you signed a lien waiver, it will not be considered effective if it is not the same form prescribed by Nevada laws.
3. Ensure that all pieces of information in your lien waiver are accurate
When filling out the details required in the Nevada Conditional Progress Payment Waiver, make sure that all the names are spelled correctly and all the amounts are written accurately. Avoid making minor spelling mistakes. Also verify that the payment amount is indeed for partial payment, not final payment, and that it matches the amount listed on the invoice that you are referencing.