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SUBCONTRACTOR/VENDOR LIEN WAIVERS

INTRODUCTION

This procedure outlines the process for issuing payments to subcontractors/vendors and collecting signed lien waivers. Proper management of lien waivers is essential for maintaining financial control and reducing legal risk on projects.

PROCEDURE

1. PAYMENT ISSUANCE

  1. Notify CEO of Payment

Project management will notify CEO when payment is ready to be issued.

  1. Issue Payment

CEO will write the check and project management is accountable to issue and collect signed lien waivers.

Payment Responsibility

While the CEO writes the check, project management remains responsible for tracking and collecting all associated lien waivers.

2. TRACK ISSUED LIEN WAIVERS

  1. Locate Waiver Storage Location

In the project folder, locate the "Receivables_Payables" folder, and find the folder titled "A Payments".

  1. Select Correct Waiver Type

Waiver Type Selection

Using the wrong waiver type can create legal complications. Ensure you select the appropriate type based on payment status.

Template Location

Lien waiver templates are located in OneDrive inside DOCBASE\Project Setup Files\Receivable _ Payables\A Payments. The folder contains templates for Conditional and Unconditional waivers for both Progress and Final payments.

  • Conditional waivers are used for progress payments
  • Unconditional waivers are used for final payments
  • Always ensure the waiver type matches the payment purpose
  1. Complete Waiver Information

Enter all subcontractor and payment information on the applicable lien waiver in the fillable sections.

Compliance Check

Before issuing payment, verify the subcontractor is in compliance by checking the compliance log.

  1. Distribute Waiver for Signature

=== "Mailed Checks" - Include a lien waiver with the check in the mail - Put your email address as the return email on the bottom of the waiver - Email a copy to the subcontractor or vendor when you put it in the mail

=== "Check Pickup" - Put the lien waiver at the front desk with the check - Require that it is signed before releasing the check - Ensure subcontractors/vendors are notified when checks are ready for pickup

  1. Follow Up On Missing Waivers

Follow up with subcontractors/vendors 5 business days after a check is mailed if a lien waiver has not been received yet.

3. SAVE RECEIVED LIEN WAIVERS

When a signed lien waiver is received, save it to the correct draw folder under the applicable subcontractor.

CHECKLIST

  • Payment readiness confirmed with CEO
  • Check issued by CEO
  • Correct lien waiver type selected
  • Subcontractor compliance verified
  • Waiver information completed
  • Check and waiver distributed to subcontractor/vendor
  • Follow-up scheduled if waiver not returned within 5 days
  • Signed waiver saved to correct folder location

Process Complete

When all steps are completed and the signed waiver is properly filed, the lien waiver process is complete for this payment.

graph TD
    A[Payment Ready] --> B[Notify CEO]
    B --> C[CEO Issues Check]
    C --> D[Project Management Prepares Waiver]
    D --> E{Delivery Method?}
    E -->|Mail| F[Include Waiver with Check]
    E -->|Pickup| G[Place at Front Desk]
    F --> H[Email Copy to Sub/Vendor]
    G --> I[Notify Sub/Vendor of Pickup]
    H --> J{Waiver Returned?}
    I --> J
    J -->|Yes| K[Save to Draw Folder]
    J -->|No after 5 days| L[Follow Up]
    L --> J