Don’t Take Lien Waivers for Granted!
Failure to use lien waivers in a timely and proper way can lead to problems for everyone on a construction site, from owners to suppliers.
A lien waiver is used during the mechanic’s lien process to allow a claimant party (usually a contractor, subcontractor or supplier) let another party (usually the owner) know that they have received payment and therefore waive any future lien rights to the property.
Because lien waivers are such a routine part of construction contracts, many in the industry take them for granted.
Disciplining yourself to secure lien waivers is where Sage 300 Construction (CRE) can help.
Types of Lien Waivers
Lien waivers can be conditional or unconditional, and can apply toward partial payment or final payment.
A conditional waiver on partial payment says that if a claimant has been paid to date, the waiver is an effective proof against any lien claim on the property, providing the greatest protection for contractors, subs and suppliers.
An unconditional waiver on partial payment unconditionally releases all claimant rights through a specific date.
In Sage 300 CRE, you can set up the software to generate lien waivers for your vendor.
In Accounts Payable, select File > AP Settings > Compliance Settings and choose the option to have Sage 300 CRE automatically create lien waivers.
In the Vendor Setup, on the Insurance/Compliance tab, select the check box “Create lien waivers for this vendor based on job settings”.
In JC Job Setup select the Job Compliance Tab, select the check box for each Vendor type you wish to generate Lien Waivers as required.
Sage 300 CRE Accounts Payable Settings
Accounts Payable has settings for automatically generating lien waivers including the ability to specify:
- When lien waivers are created
- The report formats for printed lien waivers
- If warning messages appear or if payment is blocked when a signed lien waiver has not been received back from the vendor
- Which vendors can have lien waivers
You can also enter lien waiver information manually and have Sage 300 Construction software warn you when a signed lien waiver has not been received back from the vendor.
Sage 300 CRE Job Cost Setup
Job Cost has settings for automatically generating lien waivers for a job that include:
- Selecting which types of vendors are expected to submit lien waivers.
- Specifying the minimum lien waiver or commitment amount.
- Setting up a job commitment (subcontract or purchase order) that is associated with a vendor.
Note: You do not need to set up a commitment if you plan to enter lien waivers manually.
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