If ever you get in to a situation when you hire the services of a contractor for remodeling your home that in turn gets the job done through sub-contractors you ought to protect yourself from any future risk or liability and ensure that everyone concerned sign a lien waver before starting the job or before you make any advance deposit.
While a contractor who even works for a few hours in the house needs to sign a waiver, you could save a lot of legal hassles in future, if you make every sub-contractor as well as the contractor sign a lien waver before any financial transaction is completed.
Unfortunately many home owners do not even know that sub-contractors may place a lien on their property, if the contract who hired them in the first place does not pay them their dues. This can happen even after you, as a home owner have paid the contractor in full and final settlement of the remodeling job and have obtained a legitimate receipt also. If you sing a lien waver before making payment, you are saved from this liability as it is then passed on to the general contractor, who had hired the services of sub-contractors.
Though it is presumed that the main contractor will pay his hired sub contractors in full, after he has received all the payments from the home owner, in reality, the contractor often does not pay his hired sub contractor personnel and this starts a dispute. If you do not get a lien saver signed by each and every person who is working in your house, you stand liable to make them payment, even if you have paid main contractor the full amount as agreed.
The biggest benefit of signing a lien waver is that it protects you from making any duplicate payment for a single job. This also ensures that everyone working in your home understands fully well that the payment will be received from the general contractor and not the home owner.
The following are some of the most important points which a lien waver must include:
- The homeowner’s name.
- The contractor’s full name, address and telephone number.
- A detailed description of the work including the final state of the house which is mutually agreed upon at the completion of the job, as well as a listing of what materials should be removed from the premises.
- The status of the work.
- Signed and dated. Be sure to have the contractor print and sign his name on two copies (one for him and one for you). Everyone must also insert the date on which they are signing the lien.
- A witness signature (optional, but highly recommended).
It does seem a bit of a problem to get each and every member of the sub-contractor’s group to sign the lien waver, especially if it is a large project and there are many sub-contractor personnel expected to be working in your home. But remember, signing this paper would mean that you are cleared of any future financial liability and there will never be any chance of a dispute, double payments, etc.
