Lien waivers are documents that allow a construction party to relinquish their lien rights. It is usually handed over to the property owner in exchange for payment. Mechanics liens are so effective that the owners want assurance that you will not record a lien as long as you get paid.
In Oregon, there are no strict laws that regulate lien waivers. There are no templates or specific deadlines to follow, and anyone can waive their lien rights at any point during a project. You must, therefore, be extra careful when signing a lien waiver lest you end up unknowingly waiving your rights for a portion of a project.
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This guide will discuss one specific type of Oregon lien waiver: the Conditional Waiver and Release on Final Payment.
- When do you use an Oregon Conditional Waiver and Release on Final Payment?
- How to prepare an Oregon Conditional Waiver and Release on Final Payment
- Best practices before signing an Oregon Conditional Waiver and Release on Final Payment
When do you use an Oregon Conditional Waiver and Release on Final Payment?
Sign an Oregon Conditional Waiver and Release on Final Payment if these two scenarios apply to you:
a. You have not received payment.
A property owner may ask you to first hand over a lien waiver before they release your payment – if this is your situation, then always use a conditional type of lien waiver. A conditional lien waiver takes effect only once you receive the payment, so it offers you protection from non-payment.
Note that even if you have received a cheque or processed a credit card transaction for payment, you must still use a conditional type of lien waiver. Always use an Oregon conditional lien waiver when you are not yet sure if the money is already at your disposal.
b. You are receiving your final payment.
This waiver is specifically for those who are done working on a project and are about to receive their final payment. This implies that you will no longer receive regular payments in the future, not including disputed claims that you may recover through an Oregon mechanics lien.
Make sure that you meet the two criteria above, especially the second condition on final payment. If you are only waiving your lien rights for a portion of your services that are still ongoing, consider signing a Condition Release on Progress Payment instead.
Remember that this waiver specifically applies to final payment — use another Oregon lien waiver if you are not expecting to receive your final payment for a project.
How to prepare an Oregon Conditional Waiver and Release on Final Payment
Oregon is relatively lax with its rules on lien waivers. You may customize your own template as long as it has all the important details, including the following:
1. The type of lien waiver
Write the title of your lien waiver as “Conditional Waiver and Release on Final Payment.”
2. Your name
Write the name of your construction business. Make sure that you write your full business name, including the appropriate suffix like Ltd. or Inc.
3. The name of the party who hired you
This is the name of your client. Write their full business name as well.
4. The name of the general contractor
Write the full name of the general contractor, if different from your client.
5. The name of the property owner
Write the full name of the owner of the project.
6. A description of the job location
Write the street address of the project, or any location description that is sufficient for identification.
7. The amount that you are waiving
Write the amount of the final payment that you are expecting to receive. Note that this is not the full amount of the contract – this is the amount of your last payment in the project.
8. Amount of disputed claims
Write the amount of disputed claims, if any. This is the remaining amount that you are still negotiating with your client. If they have not agreed to pay you a certain amount, write the contested amount in this line. You may recover this money by recording an Oregon mechanics lien.
10. Payment application or invoice number
Write the number of the payment document or the invoice related to your final payment.
11. A statement declaring you are waiving your lien rights for a specific amount provided that you receive your payment
Write the declaration that you are waiving your lien rights over the specified amount on the condition that you get paid.
13. Your name, job title, and signature
Write your or your agent’s name, job title and signature at the bottom of the page.
Best practices before signing an Oregon Conditional Waiver and Release on Final Payment
1. Ensure that your contract has no clause that waives your lien rights
Oregon has no specific rules on using lien waivers, so a construction party may waive their lien rights at any point in a project — even before payment is received. You must, therefore, make sure that you understand all the documents you are signing, including your job contract. One way of protecting your Oregon lien rights is to be diligent in reading your contract before signing it.
2. Use an Oregon conditional lien waiver if possible
A conditional lien waiver offers you protection in case a cheque bounces or a credit card transaction is rejected. This specific type of lien waiver takes effect as long as you receive the payment, so it is preferable to an unconditional lien waiver. If possible, use only a conditional lien waiver in Oregon.
3. Ask yourself whether you are receiving your final payment or not
This specific waiver is for final payment — you should be done working on a project and you are about to receive the last payment for your services. Disputed claims may be specified on the Oregon lien waiver form to ensure that you still have the right to recover those payments by filing an Oregon mechanics lien.