Ohio is one of the many states where lien waivers are not regulated. There are no statutory lien waiver forms, and anyone can write anything on a lien waiver and have it signed by a construction participant.
When signing lien waivers in Ohio, construction parties must then make sure that they know and understand what they are signing away. Lien waivers allow you to give up all or part of your lien rights in exchange for payment, and you want to ensure that you are indeed in the right position to waive your lien rights.
This guide discusses everything you need to know about one specific lien waiver in Ohio: the Conditional Waiver and Release Upon Final Payment.
When do you use an Ohio Conditional Waiver and Release Upon Final Payment?
The Ohio Conditional Waiver and Release Upon Final Payment must be signed when the following situations apply to your case:
- You have finished your work on a project.
This is a final payment waiver, which means that you should only use it when your work on a project is done. The payment that you will receive or have received in exchange for signing this Ohio lien waiver should be your final payment for the project.
- You have not received your payment.
This is a conditional lien waiver, so it only takes effect on the condition that payment is actually made. You should always use a conditional lien waiver, most especially if you do not yet have your payment on hand.
Note that it is best practice to always sign a conditional lien waiver. A conditional lien waiver protects you just in case a payment does not go through, or in case your client does not fulfill their obligation of paying you. Remember that a lien waiver lets you give up your lien rights, and you do not want to sign away your right to payment if you have not been paid yet.
How to sign an Ohio Conditional Waiver and Release Upon Final Payment
Before you sign a conditional lien waiver upon final payment, keep in mind the following steps:
1. Ensure that you are using the correct lien waiver
Ohio has no statutory forms, so you have to go over the lien waiver to know that you are indeed signing the correct type of lien waiver. A conditional waiver upon final payment usually has a conditional statement.
A conditional statement is a statement that clearly says the document will only take effect if or once payment is made. This is the most important part of a conditional lien waiver. Without this statement, your lien waiver becomes an unconditional waiver upon final payment so you lose your lien rights as soon as you sign the document.
2. Ensure that important details are included
A conditional lien waiver upon final payment in Ohio generally requires the following details:
- The name of the property owner
- The name of the hiring party
- Your name, address, and signature
- A description of the property location
- A description of the services you are furnishing to the project
- The amount of the payment you are expecting to receive for signing the waiver
- The amount of the payment you have already received
- A list of the lien waivers that you have signed, if applicable
If you are handed a lien waiver to sign, make sure that you complete all the information and that you don’t leave any items blank. Other parties may tamper with your lien waiver, so make sure that all the details that the lien waiver asks for are provided.
Best practices before signing an Ohio Conditional Waiver and Release Upon Final Payment
1. Use a conditional lien waiver instead of an unconditional one
Conditional lien waivers protect you from delinquent clients who may not honor their obligation to release your payment. If a cheque bounces or a credit card transaction gets rejected, you may end up with no payment and no lien rights unless you sign a conditional lien waiver. A conditional lien waiver ensures that your lien rights remain intact in case of fraudulent payments.
2. Read through all your contracts and waivers before signing
Understanding your contracts and lien waivers should be standard business practice, especially in states like Ohio where parties can waive their lien rights even before starting work on a project. There are no statutory waiver forms that show clear warnings, so make sure that you read through everything you sign and look for provisions that could get you to lose your lien rights.
3. Always look for a conditional statement
The conditional statement is the statement in a lien waiver that keeps your lien rights preserved in case you do not receive your payment after signing the waiver. This statement is necessary, especially if you are being asked to waive your lien rights when you do not yet have the money on hand. If you are unsure, do not hesitate to verify with your client or consult an expert.
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