Home>Levelset Community>Legal Help>Are there risks to signing a conditional progress waiver for $0?

Are there risks to signing a conditional progress waiver for $0?

I am a supplier on a job in NC where the GC is requiring my customer and us to sign off on a conditional partial waiver for $0.00, although my customer hasn't incurred any invoices yet. The GC won't pay my customer unless they sign it and all their vendors (i.e., us) signs it, too. Are there risks here?

4 replies

May 20, 2020

Zero dollar lien waivers are relatively common, but they aren't totally harmless. Plus, often, their use doesn't make a lot of sense. Levelset dives into that idea here: The Dangers of Zero Dollar Lien Waivers. Instead of providing a written waiver for a period where no work was done, it might make sense to provide a written affidavit stating that they didn't provide any work or materials for that time period. With that being said, waiving lien rights for a specific period where no work was actually performed could be pretty inconsequential. After all - that'd be waiving nothing! Still, even if such a waiver was going to be signed, it'd be important to pore over the terms of the waiver to make sure that rights aren't waived. It's not hard to misinterpret waiver language and accidentally waive more than you intend or to subordinate lien rights. More on that here: Should You Sign That Lien Waiver? Unfortunately, that means there's no black and white answer to your question. Yes, it's possible that there could be risks in signing a zero dollar lien waiver. And, as a rule of thumb, it makes a lot of sense to say no to $0 waivers. But, ultimately, it's also possible that the waiver is perfectly harmless as long as that waiver doesn't actually waive rights for a period when work was performed. Though, again - that makes for a pointless waiver.

0 people found this helpful

Helpful

Still looking for the right answer? Ask me your question!

May 21, 2020

Good Morning Matt Thank you for your response. The sub is pushing me to sign the "Lower tier subcontractor/supplier partial conditional release of claim" that I enclosed with the first email to Erin. Is there anything on that document that i need to add or delete and initial in order to make it more harmless. Thank you Jim

Report Spam

May 22, 2020

Hello Matt Did you receive my above question? The sub is awaiting my answer.I can resend the "Release of Claim" document if you don't have it. I sent it originally with Erin. thank you Jim

Report Spam

May 27, 2020

Hey Jim! Apologies for the delay, I didn't see the follow-up questions you'd posted. Unfortunately, Levelset isn't able to provide direct legal review for your documents, so I can't help with that. But, generally, California mechanics lien waivers can't really be toyed with too much - the state has statutory lien waiver forms which must be used. And, if they're tweaked too much, they won't be effective. More on that here: California Lien Waivers Guide and FAQs. As mentioned above, though - $0 lien waivers tend to be pretty pointless and can even be dangerous, at worst. But, if you're being asked to sign a lien waiver for a specific period where no work was performed, then waiving rights for that period might not be an issue since there weren't any lien rights there to begin with. Still, it's important to review the dates to ensure actual rights aren't waived. And, signing any "final" lien waiver early on in the job is not a good idea.

0 people found this helpful

Helpful

Add your answer or comment

Not the answer you were looking for? Ask your own question