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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    Real Property - Transactions

Date & Time
  • event Date

    Wednesday, April 6, 2022

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE webinar will advise construction attorneys on the risks and potential liabilities when signing lien waivers, particularly in those cases when the contractor has yet to receive payment. The panel will discuss differences in conditional lien waivers vs. unconditional waivers, properly exclude retainage, and address reservation of rights. The panel will advise all stakeholders, contractors, subcontractors, and suppliers on the best practices when presented with lien waivers and how to protect themselves from losing their rights.

Faculty

Ariel Weinstock
Partner
Katsky Korins LLP

Mr. Weinstock concentrates his practice on commercial real estate and construction transactions including purchase and sale, financing, development, access agreements leasing, property management, organizational planning and structuring, I.R.S. §1031 exchanges, tenancy-in-common arrangements, air rights transactions, and joint ventures. He advises and represents local and national clients on a broad array of design and construction agreements including RFP’s, purchase orders, construction management and alteration agreements, in addition to requisitions, lien waivers and mechanics’ liens and surety bonds. Within the legal community, Mr. Weinstock serves as an Officer of the Executive Committee of the Real Property Law Section of the New York State Bar Association, Co-Chair of the Student Affairs Committee, and Secretary of the NYSBA RPLS Construction Law Committee. He is currently serving in his second term as a Director on the New York County Lawyers Association’s Board of Directors.

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Tracey L. Williams
Senior Counsel
Peckar & Abramson, PC

Ms. Williams is a skilled litigator and has successfully represented contractors, developers, owners and subcontractors during all phases of the construction process, and thereafter. She assists clients in managing project risk through effective contractual risk allocation and counsels clients in construction matters involving contract disputes, mechanic’s and materialman’s liens, bond claims, construction defect, and other construction-related claims. In addition to construction law, Ms. Williams has extensive experience in creditor’s rights and commercial collections.

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Mark A. Cobb
Founder
Cobb Law Group

For over 25 years, Mr. Cobb has been practicing construction law throughout the state of Georgia. He remains active in many professional organizations, and he speaks and lectures extensively on Georgia’s Mechanics and Materialmen’s Law, payment bonds (Miller Act and Little Miller Act claims), construction contracting and risk-allocation & damage mitigation. In addition, Mr. Cobb publishes on similar topics regularly. Mark recently finished co-editing a 50-State Lien Law publication for the American Bar Association’s Forum on the Construction Industry and has contributed to several other books and industry publications.

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Description

Lien waivers are documents that give the relevant parties notice that an entity gives up the right to file a lien in exchange for payment. Lien waivers are generally divided into two categories: conditional and unconditional waivers. The main difference is that unconditional lien waivers are effective as soon as they are signed. In contrast, conditional lien waivers are only in effect once a predetermined condition (most commonly, a payment) is fulfilled. Typically, conditional lien waivers are submitted with every contractor and vendor invoice, while these parties sign unconditional lien waivers upon receipt of payment.

Some states (12) strictly regulate lien waivers and employ mandatory lien waiver forms. There are no set forms for waivers in states that do not strictly regulate lien waivers. Various construction contracts contain similar technical wording (for instance, a "lien waiver" is not the same as a "lien cancelation" or a "no lien clause.") Counsel must pay close attention to the contents and the conditions of the agreement.

Retainage creates a tricky issue because the lien waiver is supposed to waive lien rights to all work performed up to the effective date. If an owner is withholding retainage, contractors risk waiving their lien rights if they submit unconditional lien waivers. To preserve lien rights to retainage, a contractor can either list the precise dollar amount for work being paid and waive its lien, or expressly exclude retainage from the lien waiver with a notation to that effect.

Some lien waivers provide space to identify open change orders and claims that are not being waived or released. In these instances, contractors should identify COVID-19-related impacts as an open claim to be resolved later. Even when that option is not provided, contractors should append language to the lien waiver, excluding COVID-19-related cost and time impacts. What the reservation language should say may vary by the language in the lien waiver. Owners and other upstream entities may push back on such reservation language, but usually, the parties can work out agreeable language.

In jurisdictions where the government or health official mandates shut down of construction, the impacts of COVID-19 are apparent. However, in other jurisdictions where construction continues without extensive restrictions, the results may be more subtle or difficult to identify. Nonetheless, contractors should attempt to identify cost or time impacts and seek changes or submit claims as appropriate. But, submitting the change order request or claim is not always enough. If not expressly identified and excluded, lien waivers may still release and waive unsettled change orders or claims.

Listen as our authoritative panel of construction lawyers discusses lien waivers, when and if they should be accepted, how to address contingent issues such as retainage and reservation of rights.

Outline

  1. Lien waivers
    1. Conditional
    2. Unconditional
      1. Progress payments vs. final
    3. Retainage
    4. Reservation of rights

Benefits

The panel will address these and other key issues:

  • What should counsel include in lien waivers in states that do not have statutory requirements?
  • How can retainage be addressed in lien waivers?
  • How should counsel address reservation language in lien waivers?