From the course: Construction Loan-in-Process

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Construction loan-in-process: Types of lien waivers

Construction loan-in-process: Types of lien waivers

From the course: Construction Loan-in-Process

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Construction loan-in-process: Types of lien waivers

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- [Lecturer] If the waivers are collected before payment is made, you may be asking why a subcontractor would provide a lien waiver as proof of payment for payment that does not get made until lien waivers are collected. To alleviate that, issue lien waiver language can include the concept of conditional or unconditional. A conditional waiver will include language stating "upon payment of X," where X is the amount owed on the progress claim. This then means that the lien waiver is not valid until payment is made. Therefore, the contractor has not given up their rights to file a claim until the payment is received. An unconditional waiver by comparison can be punitive if a contractor signs the waiver expecting payment but doesn't actually get paid. However, if the contractor is giving a lien waiver for money already received, then it would be absolutely reasonable to request an unconditional lien waiver. We have now talked about conditional and unconditional waivers. However, there are…

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