General Inquiries

Final Payment Affidavit vs Conditional Final Release

  • 1.  Final Payment Affidavit vs Conditional Final Release

    Posted 09-10-2019 12:20
    I have found that a lot of our subcontractors don't bill out their retention on an invoice at the end of a project. I have decided to take a different approach to ensure that retention is being paid out timely. I have used a Final Payment Affidavit in the past that I complete with the retention value on it. The sub would then have it signed and notarized and sent back. I was also thinking of just making it a bit easier and just completing a conditional final release. This way they don't really need a notary. Does anyone have an opinion I why I should use one or the other? I want to make this as easy as I can for everyone while also protecting the business. Thank you.

    Cara Conroy
    Viking Engineering & Construction, LLC
    Portland OR

  • 2.  RE: Final Payment Affidavit vs Conditional Final Release

    Posted 09-11-2019 15:31
    Cara -- First, you almost never need a notary on any lien waiver. This is a common myth, and I highly recommend trying to fight against it in your company. The lien waiver process is hard enough. Chasing down non-requirements makes it more difficult. Here is an article on this:
    Do lien waivers need to be notarized?  Usually No.

    The question of whether to use a conditional or unconditional waiver is - otherwise - an important one.

    If you are paying someone and looking for a waiver from that person, then it doesn't matter. You can get the conditional or the unconditional. Either of these will be satisfactory for your purposes. In fact, you don't even need the waiver. You have proof that you paid the subcontractor immediately when you pay them.  Having the waiver in hand is really not for your benefit. It's for the benefit of the owner (or whoever is looking to see that the sub was paid).  In this case, you will want to show:  (i) Proof of payment + conditional; or (ii) Unconditional.

    If you are not paying the party, then the waiver becomes a lot more relevant.  If you are not directly paying the sub/supplier, you will want to get an unconditional waiver, if possible.  This is because you need to make sure those parties are actually paid, and since you are not paying directly, the waiver is the only proxy you have to that information.

    Article to read more on difference between conditional & unconditional lien waivers here:
    Unconditional Lien Waivers vs Conditional Lien Waivers

    Scott Wolfe J.D., Loyola College of Law
    CEO & Founder
    New Orleans LA
    (866) 720-5436

  • 3.  RE: Final Payment Affidavit vs Conditional Final Release

    Posted 09-14-2019 08:05
    Great answer Scott

    Steve Brunner CPA, CVA, MAFF
    Rizzo Brothers Painting Contractors
    Covington KY
    (859) 431-4700