Conditional vs unconditional lien waivers
The four lien waiver types, which one a general contractor should collect with each pay app, states with statutory forms, and mistakes that cost lien rights.
Updated
A conditional lien waiver gives up lien rights only once the payment it describes actually arrives. An unconditional lien waiver gives them up the moment it is signed, whether or not the money came. Each comes in a progress version, for one pay application, and a final version, for the last payment on the job.
What are the four types of lien waiver?
| Waiver | Takes effect | Covers | Typical use |
|---|---|---|---|
| Conditional, progress | When the payment clears | Work through a stated date | Sent with a pay app, before payment |
| Unconditional, progress | On signing | Work through a stated date | Sent after the progress payment is received |
| Conditional, final | When the final payment clears | All work on the job | Sent with the final pay app |
| Unconditional, final | On signing | All work on the job | Sent after the final payment is received |
Progress waivers usually leave out retention, unpaid extras, and work after the through date. A final waiver generally releases everything, except any disputed amounts the claimant lists on the form.
When should a general contractor collect each one?
A common cycle on a monthly pay app:
- The subcontractor sends its pay app with a conditional progress waiver for the amount requested, through the end of the billing period.
- The general contractor (GC) pays.
- With the next pay app, the subcontractor sends an unconditional progress waiver for the payment it received last month, plus a new conditional waiver for the current request.
- At closeout, the subcontractor sends a conditional final waiver with the final pay app, then an unconditional final waiver once the final payment clears.
Many GCs also ask for waivers from sub-tier subcontractors and major suppliers, since they can hold lien rights too. Owners and lenders often ask the GC for the same package before they fund a draw.
Which states have statutory lien waiver forms?
Some states set the wording by statute, and a waiver that does not substantially follow it may be unenforceable. The rules differ a lot, so read the statute for the project's state. A few examples:
- California. Civil Code sections 8132, 8134, 8136, and 8138 set four forms: conditional and unconditional, on progress and on final payment. A waiver given in exchange for, or to induce, payment must be in substantially the statutory form to be enforceable.
- Texas. Property Code section 53.284 sets the same four forms, and a waiver that does not substantially comply is unenforceable. For original contracts signed on or after January 1, 2022, the waivers no longer have to be notarized. The unconditional forms state that it is prohibited to require the claimant to sign if it has not been paid.
- Arizona. A.R.S. 33-1008 sets four forms. The unconditional ones must warn that the document is enforceable against the signer even if it has not been paid.
- Georgia. O.C.G.A. 44-14-366 sets an interim waiver and a final waiver. Since January 1, 2021, the waiver affects only lien and payment bond rights, and a claimant that was not paid has 90 days to file an affidavit of nonpayment, or the waiver stands.
- Florida. Section 713.20 gives a progress form and a final form, and no one may require a lienor to sign a different one. Florida's forms do not split conditional and unconditional; instead, a lienor paid by check may condition the waiver on payment of the check. Florida also makes a waiver given in advance of the work unenforceable.
Other states have their own forms or rules, and where a state has none, the contract and case law decide what a waiver means.
What are the common mistakes?
- Unconditional before payment. Asking a sub to sign an unconditional waiver for money it has not received. Texas prohibits it outright, and anywhere it costs trust.
- Custom wording in a statutory state. Adding indemnity, release of claims, or warranty language to a statutory form can make the waiver unenforceable.
- Wrong through date or amount. A waiver that does not match the pay app leaves a gap, or waives more than was paid.
- Missing sub-tier waivers. Paying the sub does not stop its supplier from filing a lien if the sub did not pay that supplier.
- A final waiver too early. Open change orders and retention should be settled first or listed as exceptions.
- No tracking. A missing unconditional waiver from last month is easy to overlook when the next pay app arrives.
Lien waivers sit next to the other documents a GC checks before releasing money: a current certificate of insurance and a valid license. See subcontractor prequalification for the full packet, and what to do when a certificate expires for the insurance side.
Lien law is technical and state specific. Have a construction attorney review your forms and your pay app process. Nothing here is legal advice.
Where ComplySub fits
ComplySub does not prepare or track lien waivers. It covers the insurance and license part of the payment check: it reads each subcontractor's certificate of insurance and license, compares them with your requirements, flags gaps and expirations, and reminds the vendor and their agent.
This guide is general information, not legal or insurance advice. Insurance and licensing rules vary by state, carrier, and contract; confirm what applies to you with your insurance professional, attorney, or licensing board.