There are two types of lien waivers -- conditional and unconditional. A conditional waiver depends on a triggering event occurring, which activates the waiver clause. The event is usually the payment of the due amount or the clearing of an issued check. A conditional waiver offers more protection for the contractor or subcontractor and less for the owner.

The second type of waiver is an unconditional waiver and is effective upon its issue to waive a lien claim for all or part of the potential claim amount. This waiver offers the owner stronger protection and the contractor or subcontractor less assurance of payment. Therefore, it should only be granted when the contractor or sub is close to 100% certain that payment will clear.

So, use the conditional waiver when receiving a check or some other form of payment that might not clear the bank. It is also useful when the owner promises to pay by a specific date in the future, say next Wednesday, but wants a waiver regardless.

Find Colorado's General Mechanic's Lien laws at C.R.S. 38-22.

This article is provided for informational purposes only and should not be relied upon as a substitute for an attorney's advice. Please contact a Colorado attorney with any specific question about lien waivers.

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