Lien waivers are among the most important documents that a construction professional must know how to use. When working on a construction project, a construction participant will most likely be asked to sign a lien waiver in exchange for payment.
Some states have strict regulations regarding the use of lien waivers. In states like Oregon, however, there are no specific rules to follow and there are no state-prescribed templates. While this may sound like a good idea at first, it can also mean that if you sign the wrong lien waiver, you may end up relinquishing your rights and not getting paid.
There are four major types of lien waivers, and this guide will specifically discuss the Oregon Unconditional Waiver and Release on Final Payment form.
- When do you use an Oregon Unconditional Waiver and Release on Final Payment?
- How to prepare an Oregon Unconditional Waiver and Release on Final Payment
- Best practices before signing an Oregon Unconditional Waiver and Release on Final Payment
When do you use an Oregon Unconditional Waiver and Release on Final Payment?
Before you sign an Oregon Unconditional Waiver and Release on Final Payment, make sure that the following criteria apply to your situation:
a. You have your payment on hand.
Having payment on hand means you have verified that the paycheck has been cleared by the bank or that the credit card transaction has been approved. “Pending” payments do not count, because a cheque may bounce and a transaction can get rejected. Make sure that you have the payment on hand because you are signing an unconditional lien waiver — you waive your lien rights the moment you hand it over, regardless of whether you actually received the payment or not.
b. You have received your final payment for the project.
As the name implies, the Unconditional Waiver and Release on Final Payment means that you have received your last paycheck for the job. If there are disputed claims, you may explicitly mention them in your lien waiver. Generally, however, you use a final payment lien waiver when your work on a project is done and you are not expecting any more future payment other than the disputed claims, if any.
Meeting these two conditions is very important before signing an Oregon Unconditional Waiver and Release on Final Payment. If you are in doubt, consider signing an Oregon Conditional Final Payment lien waiver instead as it will give you more protection in the event that your payment does not go through.
How to prepare an Oregon Unconditional Waiver and Release on Final Payment
In Oregon, there are no required lien waiver templates that you must use in order for your lien waiver to be considered valid. Generally, an Oregon Unconditional Waiver and Release on Final Payment must contain the following information:
a. The type of lien waiver
This is usually the title of the document. The words “Unconditional Waiver and Release on Final Payment” must be written at the top of the page.
b. Your name
This is your full business name. Make sure that you include the correct suffix, e.g. Ltd. or Inc.
c. The name of the party who hired you
This is the name of your client. If you are working for a party that is not the general contractor, also write the name of the general contractor separately.
d. The name of the property owner
This is the name of the owner of the project.
e. A description of the job location
This can just be the street address of the project.
f. The amount that you are waiving
This is the amount of the final payment that you received.
g. The amount of the disputed claims
This is the amount of any disputed payment that is not included in the final payment that you received.
h. Payment application or invoice number
This is the invoice number or payment application number that corresponds to the final payment that you received.
i. A statement saying you have already been paid the final payment amount and are waiving your lien rights
This is a statement that explains that you have already received the payment so you are waiving your mechanics lien rights over it.
j. Your name, job title and signature
This is your name, title and signature, or the name, title and signature of your authorized agent.
Best practices before signing an Oregon Unconditional Waiver and Release on Final Payment
1. Watch out for lien waiver language in your job contract
Before executing a contract with your client, be wary of possible statements that may ask you to unknowingly waive your lien rights. There are no rules in Oregon that specifically prohibit construction parties to waive their lien rights before getting paid, so anyone can waive their lien rights at any point in a project, whether they get paid or not.
Always read through your contract carefully to make sure that you keep your Oregon lien rights intact and to only waive them once you have been duly paid for your services.
2. Verify that payment is on hand before you sign
Verifying that payment is on hand means making sure that the money has been received and is already at your disposal. Signed cheques do not count as these cheques could bounce. Pending credit card transactions also do not count as they may get rejected. Sign an Oregon Unconditional Final Payment Lien Waiver only when you know for certain that you have the money on hand.
3. Sign a conditional final payment lien waiver if in doubt
If you are not sure whether payment is already deposited into your account or if your client is demanding that you hand over a lien waiver before they give you the money, always choose to sign an Oregon conditional lien waiver. A conditional lien waiver takes effect only when you actually receive the payment. Sign a conditional lien waiver when in doubt as it protects you from non-payment, just in case your client does not honor their end of the negotiation.