{"id":2035,"date":"2025-06-04T19:31:52","date_gmt":"2025-06-04T19:31:52","guid":{"rendered":"https:\/\/before-you-build.buildzoom.com\/project-protections-liens-payments-legal-terms"},"modified":"2025-10-16T16:02:52","modified_gmt":"2025-10-16T16:02:52","slug":"project-protections-liens-payments-legal-terms","status":"publish","type":"page","link":"https:\/\/before-you-build.buildzoom.com\/?page_id=2035","title":{"rendered":"Project Protections: Liens, Payments &#038; Legal Terms"},"content":{"rendered":"\t\t<div data-elementor-type=\"page\" data-elementor-id=\"2035\" class=\"elementor elementor-2035\">\n\t\t\t\t<div class=\"elementor-element elementor-element-5c6f722c e-flex e-con-boxed e-con e-parent\" data-id=\"5c6f722c\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-32ba2b43 elementor-widget elementor-widget-text-editor\" data-id=\"32ba2b43\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h2 id=\"h.orcgrliscs8n\" class=\"c17\"><span style=\"font-size: 16px;\">A plain-language overview of key protections built into the construction process, and how to make sure you\u2019re covered<\/span><\/h2>\n<h3 id=\"h.30bo0x1h9tz2\" class=\"c8\"><span class=\"c9 c7\">Introduction<\/span><\/h3>\n<p class=\"c2\"><span class=\"c0\">Construction projects involve many moving parts, multiple trades, layered payments, legal documentation, and people working on your property. Even if you&#8217;ve signed a contract and set a budget, there are a few important protections that help minimize risk and keep the project on track. This page explains key contract and payment terms and offers clear steps you can take to protect yourself throughout the process.<\/span><\/p>\n<h3 id=\"h.ckxih9x7vvev\" class=\"c8\"><span class=\"c9 c7\">Mechanic\u2019s Liens &amp; Lien Waivers<\/span><\/h3>\n<p class=\"c2\">A <span class=\"c7\">mechanic\u2019s lien<\/span><span class=\"c0\">&nbsp;is a legal claim that a contractor, subcontractor, or material supplier can file against your property if they are not paid for their work or materials. Even if you\u2019ve paid your general contractor in full, if that contractor fails to pay a subcontractor or supplier, that unpaid party may have the legal right to place a lien on your home or land.<\/span><\/p>\n<p class=\"c2\">Once recorded, a lien becomes a <span class=\"c7\">cloud on your property title<\/span>, <span class=\"c0\">which can delay refinancing, selling the property, or even finalizing loan disbursements. In some cases, you could even be forced to pay twice if a sub files a lien and the general contractor disappeared with the original payment.<\/span><\/p>\n<h4 id=\"h.uyunfnn9r1ik\" class=\"c6\"><span class=\"c5\">How to Prevent Lien Issues<\/span><\/h4>\n<p class=\"c2\">The best way to protect yourself is to require <span class=\"c7\">lien waivers<\/span><span class=\"c0\">&nbsp;from the general contractor and any major subcontractors or suppliers involved. These are legal documents that waive the right to file a lien for the amount paid.<\/span><\/p>\n<p class=\"c2\"><span class=\"c0\">You\u2019ll typically collect lien waivers with each progress payment, and again when issuing final payment.<\/span><\/p>\n<h4 id=\"h.edttf6le25z\" class=\"c6\"><span class=\"c5\">Types of Lien Waivers<\/span><\/h4>\n<p class=\"c2\">There are four common types of lien waivers. The difference lies in <span class=\"c7\">when<\/span><span class=\"c0\">&nbsp;the waiver takes effect and whether the payment has already cleared:<\/span><\/p>\n<ul class=\"c1 lst-kix_ftyv343jx3r3-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c7\">Conditional Partial Waiver<br><\/span><span class=\"c0\">&nbsp;Acknowledges a payment has been issued for part of the project, but the waiver becomes effective only once payment is received and cleared.<br><\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c7\">Unconditional Partial Waiver<br><\/span><span class=\"c0\">&nbsp;Waives lien rights for a partial payment that has already been received and processed.<br><\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c7\">Conditional Final Waiver<br><\/span><span class=\"c0\">&nbsp;Applies to the final project payment, but the waiver is only effective once the final payment clears.<br><\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c7\">Unconditional Final Waiver<br><\/span><span class=\"c0\">&nbsp;Waives all lien rights upon receipt of final payment. This should only be signed after full payment is confirmed.<br><\/span><\/li>\n<\/ul>\n<h4 id=\"h.8l5khbjn85h4\" class=\"c6\"><span class=\"c5\">Your Role as a Project Owner<\/span><\/h4>\n<p class=\"c2\">You aren\u2019t responsible for managing all subcontractors, but you should confirm yo<span class=\"c0\">ur general contractor is collecting waivers from everyone involved. If the GC won\u2019t agree to provide waivers or refuses to confirm subcontractor payment, it\u2019s a red flag.<\/span><\/p>\n<h4 id=\"h.m74d3t4dhzgp\" class=\"c6\"><span class=\"c5\">Action Items:<\/span><\/h4>\n<ul class=\"c1 lst-kix_q0z9uhoegan7-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Ask for lien waivers as part of every payment draw, especially for larger or multi-phase projects.<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Request conditional waivers before issuing payment and require unconditional waivers once payment clears.<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Keep a record of all signed waivers with your project documents. Your lender may also request these.<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\">Talk to your contractor upfront: Ask how they handle lien releases and how they document payment to subs and suppliers.<span class=\"c0\"><br><\/span><\/li>\n<\/ul>\n<h3 id=\"h.kd3l70p9zgr3\" class=\"c8\"><span class=\"c9 c7\">Progress Payments vs. Milestone Payments<\/span><\/h3>\n<p class=\"c2\"><span class=\"c0\">Construction projects are typically paid in phases rather than all at once. Understanding how your payment schedule is structured and ensuring it\u2019s tied to real progress can reduce risk and give you more control over the timeline and budget.<\/span><\/p>\n<p class=\"c2\"><span class=\"c0\">There are two common ways to structure payments:<\/span><\/p>\n<h4 id=\"h.j3yrrc1ze0v\" class=\"c6\"><span class=\"c5\">Progress Payments (Time-Based)<\/span><\/h4>\n<p class=\"c2\">Progress payments are made on a <span class=\"c7\">regular schedule<\/span><span class=\"c0\">, such as every two weeks or monthly, regardless of what stage the project is at. These are often used on larger or longer-duration projects, especially when the contractor needs cash flow to pay subs and order materials.<\/span><\/p>\n<p class=\"c2\"><span class=\"c5\">Benefits:<\/span><\/p>\n<ul class=\"c1 lst-kix_1jyei7a84w0t-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Predictable for budgeting<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Easier for contractors to manage cash flow<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Common on projects with complex or overlapping scopes<\/span><\/li>\n<\/ul>\n<p class=\"c2\"><span class=\"c5\">Risks:<\/span><\/p>\n<ul class=\"c1 lst-kix_5s6hxi9dn656-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">You may pay for work before it\u2019s completed<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Delays in progress can still trigger payments unless the contract links payments to deliverables<\/span><\/li><\/ul>\n<h4 id=\"h.95mxwsm1qhku\" class=\"c6\"><span class=\"c5\">Milestone Payments (Progress-Based)<\/span><\/h4>\n<p class=\"c2\">Milestone payments are tied to the <span class=\"c7\">completion of specific phases of work<\/span><span class=\"c0\">, like demolition, framing, rough plumbing, drywall, etc. Each milestone must be completed and usually verified before the contractor submits an invoice.<\/span><\/p>\n<p class=\"c2\"><span class=\"c5\">Benefits:<\/span><\/p>\n<ul class=\"c1 lst-kix_64maaqbq4ium-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">You\u2019re only paying for work that\u2019s done<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Helps ensure accountability and keeps the project on track<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Easier to align with inspections or approvals<\/span><\/li>\n<\/ul>\n<p class=\"c2\"><span class=\"c5\">Risks:<\/span><\/p>\n<ul class=\"c1 lst-kix_10uogi5d6sws-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Milestone definitions can be vague without clear documentation<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Contractors may rush to &#8220;complete&#8221; a milestone to trigger payment<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Disagreements may arise over whether a milestone is truly complete<\/span><\/li>\n<\/ul>\n<h4 id=\"h.j5nimc5pqpg\" class=\"c6\"><span class=\"c5\">Which Structure is Better?<\/span><\/h4>\n<p class=\"c2\">Neither method is inherently better, but milestone-based payments offer stronger protection <span class=\"c0\">for homeowners and project owners. They ensure you\u2019re not paying ahead of actual progress. For that reason, many banks and construction lenders use a milestone structure for disbursing construction loans.<\/span><\/p>\n<h4 id=\"h.euezx9m6naol\" class=\"c6\"><span class=\"c5\">What to Look For in Your Payment Terms<\/span><\/h4>\n<p class=\"c2\"><span class=\"c5\">Action Items:<\/span><\/p>\n<ul class=\"c1 lst-kix_ib2ask4ogpmc-0 start\">\n<li class=\"c2 c4 li-bullet-0\">Review your contract\u2019s payment schedule. Does it specify <span class=\"c7\">dates<\/span>&nbsp;or <span class=\"c7\">milestones<\/span><span class=\"c0\">?<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">If it\u2019s date-based, ask for it to be adjusted or clarified to reflect work progress.<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Make sure each milestone has a clear description. For example:<br>\u274c \u201cRough-in completed\u201d \u2192 \u2705 \u201cPlumbing, electrical, and HVAC rough-ins complete and inspected\u201d<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Don\u2019t issue payment for a milestone unless the work has been verified as complete.<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\">Ask whether <span class=\"c7\">retention<\/span><span class=\"c0\">&nbsp;(withholding a small percentage until final completion) is included.<\/span><\/li>\n<\/ul>\n<h3 id=\"h.fcrr0a3u8l8c\" class=\"c8\"><span class=\"c7 c9\">Retainage (Retention)<\/span><\/h3>\n<p class=\"c2\"><span class=\"c0\">Retainage is a portion of each payment, commonly 5% to 10%, that is withheld until the end of the project. This protects you by providing leverage to ensure that all punchlist items and final work are completed properly.<\/span><\/p>\n<p class=\"c2\"><span class=\"c5\">Action items:<\/span><\/p>\n<ul class=\"c1 lst-kix_dr2p4wxrclnp-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Ask your contractor if retainage is included in their payment structure<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">If not, you can request to include a retention clause in the contract<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Clarify when retainage will be released and under what conditions (e.g., final walkthrough, lien waivers, punchlist completion)<\/span><\/li>\n<\/ul>\n<h3 id=\"h.ib4kdwuk5334\" class=\"c8\"><span class=\"c9 c7\">Substantial Completion vs. Final Completion<\/span><\/h3>\n<p class=\"c2\"><span class=\"c0\">These two terms often appear in construction contracts, invoices, and payment schedules, but they mean very different things and can have a big impact on when payments are due, warranties begin, and when you\u2019re legally allowed to use the space.<\/span><\/p>\n<h4 id=\"h.xq587npq7khj\" class=\"c6\"><span class=\"c5\">Substantial Completion<\/span><\/h4>\n<p class=\"c2\"><span class=\"c7\">Substantial completion<\/span>&nbsp;refers to the point in the project when the space is <span class=\"c7\">functional, usable, <\/span><span class=\"c0\">and code-compliant, even if minor details (like trim, touch-ups, or fixture adjustments) still remain.<\/span><\/p>\n<p class=\"c2\"><span class=\"c0\">In many contracts, this is the milestone that:<\/span><\/p>\n<ul class=\"c1 lst-kix_51iisowzfy1l-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Starts the contractor\u2019s warranty clock<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Triggers the release of final loan funds (if applicable)<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Marks when the owner can take possession or begin using the space<\/span><\/li>\n<\/ul>\n<p class=\"c2\"><span class=\"c0\">For projects like custom homes, ADUs, or commercial tenant improvements, substantial completion is often tied to receiving a Certificate of Occupancy (CO).<\/span><\/p>\n<h4 id=\"h.f3e925a5b7qu\" class=\"c6\"><span class=\"c5\">Certificate of Occupancy (CO)<\/span><\/h4>\n<p class=\"c2\">A <span class=\"c7\">Certificate of Occupancy<\/span><span class=\"c0\">&nbsp;is issued by the local building department after final inspections have been passed. It confirms that:<\/span><\/p>\n<ul class=\"c1 lst-kix_h6hr9x6xyehj-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">The structure is safe to occupy<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">It meets all building, fire, zoning, and accessibility codes<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">The permitted scope of work has been completed as approved<\/span><\/li>\n<\/ul>\n<p class=\"c2\"><span class=\"c0\">You cannot legally move in or open a space to the public without a CO (unless a Temporary CO or equivalent is issued). In residential projects, it\u2019s required for final loan disbursement and sometimes for utility hookups.<\/span><\/p>\n<p class=\"c2\"><span class=\"c5\">Who obtains the CO?<\/span><\/p>\n<ul class=\"c1 lst-kix_jmvu21qaweje-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Your contractor or architect usually schedules the final inspection and submits the paperwork<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">You, as the owner, may need to sign off or be present in some jurisdictions<\/span><\/li>\n<\/ul>\n<h4 id=\"h.dl5ulh76o7gs\" class=\"c6\"><span class=\"c5\">Final Completion<\/span><\/h4>\n<p class=\"c2\"><span class=\"c7\">Final completion<\/span><span class=\"c0\">&nbsp;is the point where every aspect of the project is done, including punchlist items, final clean-up, and any outstanding change orders or adjustments.<\/span><\/p>\n<p class=\"c2\"><span class=\"c0\">This is usually when:<\/span><\/p>\n<ul class=\"c1 lst-kix_mztpwvscmr7z-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Final payments (including retainage) are released<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Lien waivers are submitted<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">All tools, debris, and materials are removed from the site<\/span><\/li>\n<\/ul>\n<h4 id=\"h.pjk0jrnaxvw9\" class=\"c6\"><span class=\"c5\">Action Items:<\/span><\/h4>\n<ul class=\"c1 lst-kix_fkuva0kunbhu-0 start\">\n<li class=\"c2 c4 li-bullet-0\">Check your contract to see how <span class=\"c7\">substantial<\/span>&nbsp;and <span class=\"c7\">final completion<\/span><span class=\"c0\">&nbsp;are defined<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\">Clarify whether the <span class=\"c7\">Certificate of Occupancy<\/span><span class=\"c0\">&nbsp;marks substantial completion for your project<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Don\u2019t release final funds until the punchlist is complete, lien waivers are received, and any required documentation (like the CO) is issued<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">If you\u2019re financing the project, ask your lender whether the CO is required to draw the final loan amount<\/span><\/li>\n<\/ul>\n<h3 id=\"h.d1a26xjxda2b\" class=\"c8\"><span class=\"c9 c7\">Warranty Periods &amp; Punchlist Process<\/span><\/h3>\n<p class=\"c2\">Even after the contractor finishes construction and you\u2019ve moved in, your project isn\u2019t entirely \u201cdone.\u201d Most projects include a <span class=\"c7\">warranty period<\/span>&nbsp;and a <span class=\"c7\">punchlist process<\/span><span class=\"c0\">&nbsp;to catch and fix lingering issues without additional cost.<\/span><\/p>\n<p class=\"c2\"><span class=\"c0\">These protections exist to give you peace of mind and ensure the contractor stands behind their work, but only if you know what to expect and follow up appropriately.<\/span><\/p>\n<h4 id=\"h.t102qemxhb3q\" class=\"c6\"><span class=\"c5\">What Is a Punchlist?<\/span><\/h4>\n<p class=\"c2\">A <span class=\"c7\">punchlist<\/span><span class=\"c0\">&nbsp;is a checklist of minor issues or unfinished items identified toward the end of the project. These are typically non-structural and non-code-related items that should be completed, corrected, or improved before final payment.<\/span><\/p>\n<p class=\"c2\"><span class=\"c5\">Examples of common punchlist items:<\/span><\/p>\n<ul class=\"c1 lst-kix_5wptsh57pndo-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Paint touch-ups or scuffs<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Loose hardware (door handles, towel bars)<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Minor plumbing or electrical adjustments<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Missing or chipped trim<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Cabinet alignment issues<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Final debris removal or site clean-up<\/span><\/li>\n<\/ul>\n<p class=\"c2\"><span class=\"c0\">Punchlist items are typically identified during a walk-through with the contractor just before or at substantial completion.<\/span><\/p>\n<h4 id=\"h.eujq3uiz4589\" class=\"c6\"><span class=\"c5\">When to Create the Punchlist<\/span><\/h4>\n<ul class=\"c1 lst-kix_suu9dw92pbed-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c7\">Before final payment<\/span><span class=\"c0\">: Ideally, the punchlist is created before you release the final payment or retainage.<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c7\">At or after substantial completion<\/span><span class=\"c0\">: It can happen once the space is usable, even if some minor tasks are left.<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c7\">In writing<\/span><span class=\"c0\">: Use a shared document or checklist so there\u2019s a clear record of what\u2019s agreed to.<\/span><\/li>\n<\/ul>\n<h4 id=\"h.v36muhrf46n6\" class=\"c6\"><span class=\"c5\">Who Fixes the Punchlist Items?<\/span><\/h4>\n<p class=\"c2\"><span class=\"c0\">The contractor is responsible for addressing all punchlist items that are part of the contracted scope. They may perform the work themselves or assign it to subs or laborers. Items that go unresolved should be escalated before final payment is made.<\/span><\/p>\n<h4 id=\"h.v7yd262roave\" class=\"c6\"><span class=\"c5\">What Is a Warranty Period?<\/span><\/h4>\n<p class=\"c2\">Most general contractors offer a <span class=\"c7\">warranty period<\/span>&nbsp;(often 12 months) after the project is substantially complete. This covers defects in <span class=\"c7\">workmanship or installation<\/span><span class=\"c0\">, not normal wear and tear or misuse.<\/span><\/p>\n<p class=\"c2\"><span class=\"c5\">What\u2019s typically covered under warranty:<\/span><\/p>\n<ul class=\"c1 lst-kix_bptxyuoy61p6-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Settling cracks in drywall or trim<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Loose tiles, lifting flooring<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Faulty caulking or joints<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Malfunctioning fixtures (if supplied by the contractor)<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Improperly installed hardware or finishes<\/span><\/li>\n<\/ul>\n<p class=\"c2\"><span class=\"c5\">What\u2019s not usually covered:<\/span><\/p>\n<ul class=\"c1 lst-kix_joc18ngoc96v-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Owner-supplied items (like light fixtures purchased separately)<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Wear and tear or cosmetic blemishes caused by use<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Manufacturer defects in materials (those may be covered by manufacturer warranty instead)<\/span><\/li>\n<\/ul>\n<p class=\"c2\"><span class=\"c0\">Some states have laws requiring minimum construction warranties. For example:<\/span><\/p>\n<ul class=\"c1 lst-kix_whb9yqrux23q-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">States like California require a one-year fit and finish, two years for mechanical systems, and ten years for structural defects.<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Other states may require warranty coverage even if it\u2019s not mentioned in the contract.<\/span><\/li>\n<\/ul>\n<h4 id=\"h.hzzpdvaj8ndw\" class=\"c6\"><span class=\"c5\">Action Items:<\/span><\/h4>\n<ul class=\"c1 lst-kix_ceb3e2jmgfv4-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Ask your contractor up front: \u201cDo you offer a warranty? What\u2019s included and for how long?\u201d<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">If the warranty isn\u2019t in writing, request to have it added to your contract.<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Schedule a formal walk-through near project completion to create your punchlist.<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Don\u2019t release the final payment until the punchlist is completed to your satisfaction.<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Keep a record of the punchlist, photos of any issues, and final invoice\/payment dates.<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Mark your calendar to check in near the end of the warranty period and address anything that arises.<\/span><\/li>\n<\/ul>\n<h3 id=\"h.24y63waw5jfg\" class=\"c8\"><span class=\"c9 c7\">Indemnification &amp; Hold Harmless Clauses<\/span><\/h3>\n<p class=\"c2\">You might come across the terms <span class=\"c7\">\u201cindemnify\u201d<\/span>&nbsp;or <span class=\"c7\">\u201chold harmless\u201d<\/span>&nbsp;in your construction contract. They sound legal, and they are, but they deal with something very practical: <span class=\"c5\">who is responsible if something goes wrong.<\/span><\/p>\n<h4 id=\"h.dhaioy51mxi1\" class=\"c6\"><span class=\"c5\">What Is Indemnification?<\/span><\/h4>\n<p class=\"c2\">In simple terms, <span class=\"c7\">indemnification means one party agrees to protect the other from legal or financial responsibility<\/span><span class=\"c0\">&nbsp;for certain issues.<\/span><\/p>\n<p class=\"c2\"><span class=\"c0\">Here\u2019s an example:<\/span><\/p>\n<p class=\"c2\">If a subcontractor accidentally damages a neighbor\u2019s property or injures someone, an <span class=\"c7\">indemnification clause<\/span><span class=\"c0\">&nbsp;might say the contractor is responsible for handling the situation, not you, the owner.<\/span><\/p>\n<p class=\"c2\"><span class=\"c0\">But not all indemnification clauses are written the same way. In some contracts, the wording might shift more risk to the owner than is fair, so it\u2019s worth checking.<\/span><\/p>\n<h4 id=\"h.1ymqmj309x9b\" class=\"c6\"><span class=\"c5\">What Is a Hold Harmless Clause?<\/span><\/h4>\n<p class=\"c2\">A <span class=\"c7\">hold harmless clause<\/span><span class=\"c0\">&nbsp;is related. It typically means one party agrees not to hold the other legally responsible for specific problems or claims.<\/span><\/p>\n<p class=\"c2\"><span class=\"c0\">It\u2019s common for contractors to include a clause that says the owner will hold them harmless if delays or issues arise due to events outside their control (like weather, permit delays, or owner-caused changes).<\/span><\/p>\n<h4 id=\"h.c60al0fay7qx\" class=\"c6\"><span class=\"c5\">What to Look For<\/span><\/h4>\n<p class=\"c2\"><span class=\"c0\">These clauses often appear buried in the fine print of standard contract templates. They\u2019re not always easy to understand, but they play a big role in determining who is financially or legally responsible for accidents, errors, or disputes.<\/span><\/p>\n<h4 id=\"h.9rhg9ajynns4\" class=\"c6\"><span class=\"c5\">Action Item:<\/span><\/h4>\n<ul class=\"c1 lst-kix_acyfluud26s3-0 start\">\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Look for the indemnification or hold harmless section in your contract (often in the \u201cLiability\u201d or \u201cRisk\u201d section).<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">Check who is protecting who. The most balanced version will say the contractor agrees to indemnify the owner for claims arising from the contractor\u2019s work or negligence.<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">If the clause is unclear or seems one-sided, ask the contractor to explain it or run it by a lawyer before signing.<\/span><\/li>\n<li class=\"c2 c4 li-bullet-0\"><span class=\"c0\">You can ask to modify overly broad or unfair language to better reflect shared responsibility.<\/span><\/li>\n<\/ul>\n<h3 id=\"h.ir964wuampv2\" class=\"c8\"><span class=\"c9 c7\">What\u2019s Next: Navigating Change Orders<\/span><\/h3>\n<p class=\"c2\">As your project moves forward, you may want to adjust the design, swap materials, or deal with something unexpected uncovered during demo. This is where <span class=\"c7\">change orders<\/span><span class=\"c0\">&nbsp;come in. The next page explains how to document and manage changes, how they affect your budget and timeline, and what to do when disagreements come up.<\/span><\/p>\n<p class=\"c2 c14\"><span class=\"c13\">Continue to <\/span><span class=\"c7 c13\"><a href=\"https:\/\/before-you-build.buildzoom.com\/?page_id=2030\">Navigating Change Orders<\/a><\/span><span class=\"c13\">&nbsp;to understand how changes should be priced, approved, and tracked during construction.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>A plain-language overview of key protections built into the construction process, and how to make sure you\u2019re covered Introduction Construction projects involve many moving parts, multiple trades, layered payments, legal documentation, and people working on your property. Even if you&#8217;ve signed a contract and set a budget, there are a few important protections that help [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":0,"parent":2015,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-2035","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Project Protections: Liens, Payments &amp; Legal Terms - BuildZoom - Before You Build<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/before-you-build.buildzoom.com\/?page_id=2035\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Project Protections: Liens, Payments &amp; Legal Terms - BuildZoom - Before You Build\" \/>\n<meta property=\"og:description\" content=\"A plain-language overview of key protections built into the construction process, and how to make sure you\u2019re covered Introduction Construction projects involve many moving parts, multiple trades, layered payments, legal documentation, and people working on your property. 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