Before signing a lien waiver, construction participants must pay close attention to what is written on the document. Not all states have statutory lien waiver forms, which means that a lien waiver can contain other statements that can cause you to waive more than just your lien rights over a specific project.
Ohio is one of the states where lien waivers are not regulated by the law. Ohio lien waivers have no required statements or warnings, so contractors and subcontractors must pay careful attention before signing a lien waiver in Ohio.
This guide offers some quick tips on how to sign one specific type of Ohio lien waiver: the unconditional waiver and release upon final payment.
- When do you use an Ohio Unconditional Waiver and Release Upon Final Payment?
- How to sign an Ohio Unconditional Waiver and Release Upon Final Payment?
- Best practices before signing an Ohio Unconditional Waiver and Release Upon Final Payment
When do you use an Ohio Unconditional Waiver and Release Upon Final Payment?
Before signing an Ohio Unconditional Lien Waiver Upon Final Payment, make sure that the following conditions apply to your situation:
You are done working on a project.
This is a final payment waiver, so you should sign this type of waiver in Ohio when you are finished with our work on a project. Another way of assessing if this is the right type of lien waiver for you is to ask yourself whether you are expecting any more future payments for the project. If you have received your final payment, use this lien waiver.
You already have the payment on hand.
This is an unconditional lien waiver, so you should sign it only when you have verified that you have the money on hand. If your client has not yet handed you the payment, sign a conditional lien waiver instead.
You should keep in mind that payments made through credit cards and bank cheques must first be cleared by the bank before you sign a lien waiver. If, for instance, a bank cheque bounces or a credit card transaction gets rejected, you have no way of taking back your signature from an unconditional lien waiver. Any unconditional lien waiver takes effect as soon as you sign it, regardless if payment has already gone through or not.
Also, note that you must only sign a final payment lien waiver when you are done working on a project. Once you sign an unconditional lien waiver upon final payment, you waive your lien rights for all of the services that you furnished to a project. If you want to sign away only a portion of your lien rights, consider signing a progress payment type of lien waiver instead.
How to sign an Ohio Unconditional Waiver and Release Upon Final Payment?
Here are some tips that you should keep in mind when signing an unconditional lien waiver for final payment in Ohio:
Verify that you are signing the correct type of lien waiver
An Unconditional Waiver and Release Upon Final Payment should have the following tells:
- The lien waiver takes effect immediately.If a lien waiver does not have a conditional statement saying that it will only take effect when payment is made, you are most likely signing an unconditional lien waiver.
- The lien waiver does not have a “through date.”A “through date” is the date that marks the coverage of your lien waiver. This date is usually required when you are signing a progress payment lien waiver. If the lien waiver does not require a through date, you can assume that you are signing a final payment lien waiver.
Ensure that important details are included
Ohio is not one of the few states that impose statutory lien waiver forms. However, you can expect to provide the following details when signing an unconditional final payment waiver:
- 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 furnishing to the project
- The amount of payment you have received for signing the waiver
- The amount of payment you have received in the past
- A list of the lien waivers that you have signed, if applicable
Best practices before signing an Ohio Unconditional Waiver and Release Upon Final Payment
Use a conditional lien waiver, if possible
The best practice is to never sign an unconditional lien waiver, especially in Ohio where there are no statutory lien waiver forms. If possible, always choose to sign a conditional lien waiver instead. A conditional lien waiver contains a conditional statement that says the lien waiver will only take effect once payment is made.
Verify that payment has been made before signing
Before you sign an unconditional lien waiver for final payment, you must make sure that the payment has gone through and that you already have it on hand. Credit card transactions can fail and a bank cheque can bounce. If these payments fall through, it won’t be easy to gain back your lien rights once you have already signed an unconditional lien waiver in Ohio.
Make sure that you are indeed done working on a project
The unconditional lien waiver upon final payment waives your lien rights for the entirety of the project. You should only use this lien waiver if you are indeed finished with your work on a project and you have received your final payment. If you have only received a portion of your expected full payment, you should use a lien waiver upon progress payment instead.