Conditional Contractor’s Lien Release Form

Conditional Contractor’s Lien Release Form is a special kind of mechanic’s lien form created by a contractor or a company. Generally speaking, Conditional Contractor’s Lien Release Form is used instead of a work contract and announces that an employee has been paid for the work.

The difference between conditional and unconditional forms is that the conditional lien release comes into effect after the employee receives payment for their work. The unconditional lien release comes into effect the moment the release of liability form is signed. It is generally accepted to consider a conditional lien release more reliable since it guarantees the receipt of funds.

When to Use Conditional Contractor’s Lien Release

This type of document is drawn up if the company hires contractors and wants to pay them at the end of the work or progressively, that is, paying for the work before the end of the work.

Progressive wages are often more convenient for contractors and the company. It allows contractors to receive the necessary payments on time while the company avoids large one-time cash expenditures.

But often, with progressive or final wages, both the contractor, the subcontractor, and the leading contractor are involved, and the company is obliged to pay off each on time. Such an intricate payment system can lead to difficulties or debts on behalf of the company, so it is more convenient to use the lien system when paying contractors.

A lien release is a document that states that the contractor has received money for his or her work and agrees not to demand a lien from the company and to claim liens in the future.

A conditional line release becomes valid only after the money is received in the recipient’s bank account, not after the document is signed. This type of lien release is considered the most convenient and reliable for both the company and the contractor because it guarantees that the money will be credited to the account.

General Steps: What to Consider While Creating Conditional Contractor’s Lien Release

Before you start creating a Conditional Contractor’s Lien Release Form, decide which type is convenient for you. There are two types of Conditional Contractor’s Lien Release Form:

  • Conditional Lien Release Upon Final Payment. This type of lien release is created after the final payment and informs that all the money for the work has been received, there will be no more payments, and the contractor will not apply for a lien.
  • Conditional Line Release Upon Progressive Payment. This type of lien release is created after receiving interim payments and reports that one of the interim payments has been received, but there are still payments for ongoing work.

Remember that you also need to prove that the payment was made, and you can do this in two ways:

  • Provide a Check. It can be a joint or single check, but it must be paid by a bank.
  • Provide Written Acknowledgment. The applicant must draw up the written acknowledgment.
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Download your fillable Conditional Contractor’s Lien Release template in PDF.

Filling Out a Conditional Contractor’s Lien Release Form

To avoid the hassle of completing the Lien Release Form, we recommend that you use our form-building software. If you think you need professional help with filling out the form, it is best to seek legal advice on how to complete the Conditional Contractor’s Lien Release Form.

Below are step-by-step instructions on how to fill out the Conditional Contractor’s Lien Release Form.

Enter the Names of the Parties

Provide the claimant’s and client’s full legal name.

Indicate the Place of Work

After specifying the parties’ names, you need to indicate who the employer is and enter the job address and owner’s full legal name.

Specify Payment Amount

First, indicate who is the creator of the check, and then indicate the amount in dollars.

Describe Exceptions

Write down exceptions, if any.

Sign the Document

After filling in all the fields, you must sign the form.

Specify Signing Date

Indicate the date (day, month, year) of signing the document under the signature.

Published: Jan 18, 2021