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I’m in the process of building my own home. I will be subbing out portions of the work. Are there any standard contracts available to prevent subs from applying liens to my project? I’m receiving financing from a private party that would require this. AIA document g706a seems to apply after the work has been completed. Thanks
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Richard-
The lein process is the only way a sub can make sure they are paid for work. I will sign a lein release after the bill is paid, but ask me to sign before the work is started and you'll have to find another sub.
My impression is you aren't going to pay.
*Most construction lenders have line items for the subs, e.g., concrete driveway budgeted at $12,000.The lender either has a construction department or uses a construction clearing house, which monitors the construction process, and cuts checks when it is advised that the concrete work is done. It inspects the work to be assured that it is in fact done, drafts a lien release, and cuts the check for the amount of the invoice. Check is handed over when sub signs lien release.If the amount of the check exceeds the line item budget then the developer is a bit of trouble. Construction Lenders like to see the projects come in at or below the budget.
*Richard, I'm doing the same as you and constructing my own (and subbing out very little which has in turn made me work harder...thats another story). Anyway, the lender didn't need any lien waivers unless one of the subs filed a lien. After that, I would need waivers for everyone. I remedied this by paying those who did the work and we are all happy. Now if I can just get the house completed the wife will be happy too.Mike
*A couple of questions along these lines. The waiver of lien form that I have has places for signatures from a witness and a notary public. I assume that few would bother with a notary (unless, perhaps, the lien covers a lot of money), but do people generally have a witness sign when they have the sub sign off? I have read that it is a good idea to also have a lien waiver signed if an advance or payment is made for materials. Is this commonly done? It appears from a brief purusal of websites that while there are "universal" forms, it may be desirable to have a form tailored to the exact law in your state. You may want to check with the appropriate authorities for a specific form. Some websites with lien waiver forms, some are specific to states but could be modified:http://www.aciatl.com/pdfs/forms.htmhttp://www.thecontractorsgroup.com/list_of_forms_to_print.htmhttp://www.knight-barry.com/new/doc_lien_waiver_form.htmhttp://www.hbwtitle.com/Forms/forms%20page.htmBased on Florida law, but some general info:http://www.agccf.org/waiver_&_release_of_liens.htmSome cautions before signing a lien waiver:http://www.corwinlaw.com/newsletters/94fall3.htmlSome related info:http://andyshowto.com/insurance.htm
*Don't dink around with this. Spend the money for a set of forms made up by a GOOD and EXPERIENCED attorney in your state. Or, get a copy from your local AGC chapter.lots of sins hidden in the commas and clauses of these things. So, do it right the first time.
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I'm in the process of building my own home. I will be subbing out portions of the work. Are there any standard contracts available to prevent subs from applying liens to my project? I'm receiving financing from a private party that would require this. AIA document g706a seems to apply after the work has been completed. Thanks