Alabama Conditional Lien Waiver on Progress Payment

Conditional Lien Waiver on Progress Payment for Real Estate Located in Alabama

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Conditional Waiver and Release of Lien on Progress Payment

Alabama mechanic's liens are governed under Chapter 11 of the Alabama Property Code (Section 11). Throughout the construction process, potential claimants may elect to serve the property owner with a lien waiver in exchange for partial or full payment.

The term "waiver" refers to giving up a legal right. In this case, the person granting the waiver is giving up the right to seek a mechanic's lien for all or part of the amount due. This assurance is usually enough to get the other party to pay. In Alabama, there are no statutory forms for waivers although according to the principles of contract law, the parties may agree to such modifications in writing.

Waivers generally come in four varieties: conditional or unconditional, and partial or final. A conditional waiver means the waiver is conditioned upon the claimant receiving the amount due, while unconditional waivers are effective regardless if payment is actually made. Partial waivers are used to waive a lien for up to the partial or progress payment amount, and final waivers release all lien rights based on a customer's full payment.

Partial waivers are used to waive a lien for up to the partial or progress payment amount. A conditional waiver means the waiver is conditioned upon the claimant receiving the amount due. Use the partial conditional waiver when the owner makes less than the full or final payment and the payment method does not guarantee receipt of the money (such as a check that hasn't cleared yet). Be sure to note any exceptions to which the waiver will not apply. This type of waiver offers more protection for the contractor or materials supplier.

This article is provided for informational purposes only and should not be relied upon as a substitute for the advice from an attorney. Please contact an attorney with questions about waivers or anything else related mechanic's liens in Alabama.

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