Oklahoma lien waiver: no statute voids it, and the trust fund survives it
Oklahoma never wrote an anti waiver section. Read the whole of Title 42 and the word waived turns up twice, once about a vendor's lien and once about a deadline you missed. What Oklahoma wrote instead is better than most anti waiver statutes: the money on a building contract is a trust fund the moment it lands in the contractor's account, and the lien waiver you signed does not touch that.
No Oklahoma statute voids a lien waiver signed before payment. What 42 O.S. 152 does is make the amount payable under any building or remodeling contract a trust fund for lienable claims the moment the contractor or subcontractor receives it, and 42 O.S. 153 makes the managing officers of a corporation and the managers of an LLC personally liable for applying it, on pain of the embezzlement statute. A waiver releases the lien on the property. It does not release the trust.
Read the law: Oklahoma Statutes title 42 section 153law.justia.com
42 O.S. 153(3), the sentence that keeps two remedies aliveFill it in online Type your details in and download it already filled in.The existence of such trust funds shall not prohibit the filing or enforcement of a labor, mechanic or materialmen's lien against the affected real property by any lien claimant, nor shall the filing of such a lien release the holder of such funds from the obligations created under this section or Section 152 of this title.
Two separate remedies, and the statute says so in one sentence so that nobody has to argue about it. The lien runs against the property. The trust runs against the money and against the people who were supposed to hand it on. A lien waiver is a document about the first one.
Download a blank Oklahoma lien waiver
Oklahoma prescribes no statutory waiver wording, so this is the general conditional waiver on progress payment, the form that fits most draws. Fill in the amount and the through date rather than leaving them blank, because no Oklahoma section limits a waiver that does not limit itself. Print it and fill it in by hand, or use the builder below and get it back already filled in.
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The two places Oklahoma says waived, and neither one is about you
Title 42 is the whole of Oklahoma lien law, from the agricultural liens at the front to the mechanics lien chapter in the middle. Read every sentence in it containing the word waive and you get two. Section 42-27 says a vendor's lien is waived by an absolute transfer of the payment contract, which is about the sale of land and not about construction. And in the mechanics lien chapter, if the person entitled to such lien does not file such statement within the time required by this chapter, such person shall be deemed to have waived his rights thereto.
That second one uses the word in the way a statute of limitations uses it. A waiver there is a clock running out, not a signature on a form. There is no Oklahoma section declaring an advance waiver void as against public policy, none prescribing what a waiver must say, and none requiring one to be notarized or served on anybody.
So on the narrow question, the answer for Oklahoma is the same as for Ohio, Washington, West Virginia, Oregon, Louisiana, Alabama and Arkansas. The document you sign means exactly what it says, and general contract law decides the rest. The reason Oklahoma is still worth reading about is that the state put its protection somewhere else entirely.
Your draw becomes a trust fund the moment it lands
42 O.S. 152(1) is one sentence and it is the important one. The amount payable under any building or remodeling contract shall, upon receipt by any contractor or subcontractor, be held as trust funds for the payment of all lienable claims due and owing or to become due and owing by such contractors or subcontractors by reason of such building or remodeling contract.
Read the timing. Not when the job finishes, not when a court says so, but upon receipt. The general who takes the owner's draw is holding your money on trust from the second it clears, and so is the sub who takes his. Subsection (2) does the same to construction mortgage proceeds in the mortgagor's hands, and subsection (3) reaches a vendor's warranty deed proceeds as to improvements made within four months before delivery of the deed.
42 O.S. 153(1) says what the trustee has to do with it. The trust funds shall be applied to the payment of said valid lienable claims and no portion thereof shall be used for any other purpose until all lienable claims due and owing or to become due and owing shall have been paid. Paying last month's fuel bill out of this month's draw while a supplier goes unpaid is not a cash flow decision in Oklahoma. It is a misapplication of trust funds.
The part a waiver cannot reach, and the felony behind it
42 O.S. 153(2) is what gives the trust its teeth. Where the party receiving the money is an entity having the characteristics of limited liability, that entity and the natural persons having the legally enforceable duty for the management of the entity are liable for the proper application of the funds, and subject to punishment under Section 1451 of Title 21, which is embezzlement. The statute then names them so that nobody can hide behind the entity: the managing officers of a corporation and the managers of a limited liability company.
Put that beside 153(3) and the shape is clear. Signing a lien waiver gives up the claim against the real property. It does not give up the claim on the trust fund, and it does not give up the personal exposure of the individual who took your money and spent it somewhere else. Those are obligations created by statute in favor of lienable claimants, and the form somebody slid across the table at the draw meeting is not addressed to them.
42 O.S. 142.4 points the same lesson back at you. Any original contractor who falsifies any statement regarding liens on labor or material to any owner of a dwelling, upon conviction, shall be guilty of a felony. A waiver or a sworn statement telling a homeowner your suppliers are paid, when they are not, is exactly the document that section is describing. In Oklahoma the paperwork around payment is criminally backed in both directions.
What to do about it on an Oklahoma job
Sign conditional, never unconditional, until the money has cleared your bank. Where no statute voids a bad waiver the form is the entire protection for the lien, and a conditional waiver that takes effect when the payment clears is a different document from one that takes effect on signature. Put the amount and the through date on it, because nothing in Title 42 will read a limit into a waiver that does not carry one.
Send the pre lien notice and watch the seventy five days. Under 42 O.S. 142.6 a claimant other than an original contractor must send a pre lien notice to the last known address of the original contractor and an owner before filing, and no later than seventy five days after the last date of supply. The section goes further for a home: no lien affecting property then occupied as a dwelling by an owner is valid unless that notice went out within seventy five days of the last furnishing. Claims under ten thousand dollars are outside the notice requirement, and so are some residential projects of four or fewer units where no owner lives there, but the owner occupied rule in paragraph 1 still applies.
Then file on time, because the trust fund is a separate remedy and not a substitute for the lien. An original contractor files the verified statement within four months of the last material or labor under 42 O.S. 142. A subcontractor, artisan or day laborer files within ninety days under 42 O.S. 143. And if a payment goes missing after you have already signed the waiver, the question to ask is not whether the waiver was valid. It is where the trust funds went, and who had the legally enforceable duty to manage them.
Which of the four to sign on an Oklahoma job
Oklahoma has no anti waiver statute, so the wording of the form is the whole of the protection against losing the lien. A conditional waiver ties the release to the payment clearing. An unconditional one releases on signature, paid or not, and nothing in Title 42 will read a condition back into it.
Questions people ask
Is an Oklahoma lien waiver signed before payment valid?
Yes, as far as the Oklahoma Statutes are concerned. Title 42 contains no section voiding a waiver of lien rights signed in advance of payment and no prescribed waiver wording. The only two places the title uses the word waived are a vendor's lien waived by absolute transfer of the payment contract, and a lien deemed waived because the claimant missed the filing deadline.
Does signing an Oklahoma lien waiver give up the trust fund claim too?
No. 42 O.S. 152 makes the amount payable under a building or remodeling contract a trust fund for lienable claims upon receipt by the contractor or subcontractor, and 42 O.S. 153(3) says the existence of the trust does not prohibit filing a lien and the filing of a lien does not release the holder of the funds from the trust obligations. They are separate remedies, and a waiver of the lien is a document about the property.
Who is personally liable for Oklahoma construction trust funds?
42 O.S. 153(2) names them. Where the recipient is an entity having the characteristics of limited liability, the entity and the natural persons having the legally enforceable duty for the management of the entity are liable for the proper application of the funds and subject to punishment under Section 1451 of Title 21, the embezzlement statute. For this purpose that means the managing officers of a corporation and the managers of a limited liability company.
Do I have to send a pre lien notice in Oklahoma?
If you are not the original contractor, usually yes. 42 O.S. 142.6 requires the notice to go to the last known address of the original contractor and an owner before the lien statement is filed and no later than seventy five days after the last date of supply, and no lien on property occupied as a dwelling by an owner is valid without it. Claims under ten thousand dollars are excepted, as are some residential projects of four or fewer units with no owner living there.
Working in another state? The general lien waiver forms page covers all four waiver types, and conditional vs unconditional lien waiver explains which of the two to sign and when.
This page quotes Oklahoma Statutes title 42 section 153 and explains what it says. It is not legal advice, and a statute can be amended. Read the linked section before you rely on it.