In states like California, lien waivers are regulated by the state. There are statutory lien waiver forms, and each form contains a warning and clear statements about the type of lien waiver that you are signing.
Such is not the case in Ohio. There are no statutory lien waiver forms in Ohio, so construction participants must be extra careful when signing their lien waivers. They have to understand everything written on a lien waiver prior to signing away their lien rights.
This guide explores a specific type of lien waiver that you may encounter in Ohio: the unconditional waiver and release upon progress payment.
When do you use an Ohio Unconditional Waiver and Release Upon Progress Payment?
Make sure that the following two situations apply to you prior to using and signing an unconditional waiver and release upon progress payment:
- You are not yet done working on a project.
This is a progress payment waiver, which means that your work is still in progress. You are receiving partial payment in exchange for signing this lien waiver, but you are still expecting more payments in the future, so you want to preserve your lien rights for the work that you have not yet performed.
- You already have the payment on hand.
This is an unconditional lien waiver so it takes effect as soon as you sign the document. You should only sign this document if the payment has gone through and that you are certain that you have the payment on hand.
Note that when signing an Ohio unconditional lien waiver upon progress payment, it is important that the payment has been cleared in the bank. A check can bounce, and a credit card transaction can get rejected, so unless the money is good for you to spend, do not sign an unconditional lien waiver yet.
How to sign an Ohio Unconditional Waiver and Release Upon Progress Payment?
When signing an unconditional waiver and release upon progress payment in Ohio, do the following:
Confirm that you are signing the correct lien waiver type
An Unconditional Waiver and Release Upon Progress Payment has the following:
- A statement that says the lien waiver takes effect immediately
An unconditional lien waiver does not have a conditional statement that says you will give up your lien rights only when payment is received. If a lien waiver “takes effect immediately,” you are indeed signing an unconditional lien waiver and you must first verify that you have the money on hand before signing.
- A “through date”
The “through date” is the date that marks which of your services is covered in the lien waiver. Everything that you did up until that through date may not be subjected to a mechanics lien once you sign a lien waiver. Make sure that the “through date” that you write on the lien waiver is true and accurate.
- A statement that says the lien waiver takes effect immediately
Ensure that important details are included
Ohio does not have statutory lien waiver forms, but an unconditional progress payment waiver usually asks for the following details:
- 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
- The Through Date that covers the progress payment you are receiving
When writing the Through Date, make sure that it aligns with the payment that you received for signing this waiver. Remember that everything up until the Through Date will not be lienable anymore when you sign the lien waiver, so make sure that you write the correct date.
Best practices before signing an Ohio Unconditional Waiver and Release Upon Progress Payment
Sign a conditional lien waiver instead
If possible, you should not sign an unconditional lien waiver. A conditional lien waiver upon progress payment is preferable because it protects your lien rights in case a payment does not go through. If your client does not pay up after you signed an unconditional lien waiver, you will still lose your lien rights.
Verify that the Through Date is correct
The Through Date is very important in progress payment lien waivers. If you write an incorrect date, you may end up losing your lien rights even for services that you have not yet performed or that you have not yet received the payment for. Always verify that the Through Date agrees with the invoices you issued and the payments you received.
Make sure you have the payment on hand before signing
If you are being asked to sign an unconditional lien waiver, you must always verify that the money has been cleared in the bank before signing. If payment has not gone through yet, tell your client that you want to wait until the payment gets cleared prior to signing. If a check bounces or a credit card transaction gets rejected, you will still keep your lien rights as long as you have not yet signed the unconditional progress payment waiver.
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