Oklahoma lien waiver: no statute voids it, and the trust fund survives it

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.

Oklahoma prints no notice form, and four sections that once did are repealed

Read the whole of Title 42 looking for a document you can fill in and you will not find one. There is no block of prescribed wording anywhere in the title, no capitalized caption for a notice, no line of blanks. Every paper the mechanics lien chapter asks for is described by what it has to contain and then left to you to lay out. That is unusual. Florida, Texas, Alabama, Iowa, Kansas, Louisiana and Maryland all print the words their notices have to carry. Oklahoma prints none.

It is also a change, which is why old templates get this wrong. In the run of sections around the pre lien notice, 42 O.S. 142.2 was repealed by Laws 2005 c. 477 section 3 effective the first of November 2005, and 42 O.S. 142.1, 142.3 and 142.5 were all repealed by Laws 2011 c. 23 section 2 effective the first of November 2011. The same 2011 act rewrote 142.6. Two sections survive in that run: 142.4, which makes it a felony for an original contractor to falsify a statement about liens to the owner of a dwelling, and 142.6, the pre lien notice. If a form you downloaded cites 42 O.S. 142.1 or 142.3, it is citing a section that has not existed since 2011.

So the Oklahoma pre lien notice is a letter you write, and 42 O.S. 142.6(B)(4) is the checklist it has to satisfy. The notice shall be in writing and shall contain, but not be limited to, the following: a statement that the notice is a pre lien notice; the complete name, address and telephone number of the claimant or the claimant's representative; the date of supply of material, services, labor or equipment; a description of the material, services, labor or equipment; the name and last known address of the person who requested that the claimant provide it; the address, legal description or location of the property it was supplied to; a statement of the dollar amount furnished or to be furnished; and the signature of the claimant or the claimant's representative. The words but not be limited to are the statute's own, so eight is a floor and not a ceiling.

Three ways to send it, and the five day question that can cancel the owner half

42 O.S. 142.6(B)(5) does not order a method of delivery. It offers a rebuttable presumption of compliance to three of them: hand delivery supported by a delivery confirmation receipt, an automated transaction under 12A O.S. 15-115, or certified mail with return receipt requested. Read the last clause twice. Notice by certified mail, return receipt requested, shall be effective on the date mailed. The seventy five days runs to the postmark, not to the day somebody signs for it, and that is the difference between a live lien and a dead one when the owner is away.

Then there is the lever almost nobody uses. Under 142.6(B)(6) a claimant may ask the original contractor in writing, sent one of those same three ways, for the name and last known address of an owner of the property. Failure of the original contractor to provide the information within five days from the date of receipt of the request shall render the pre lien notice requirement to the owner of the property unenforceable. You still owe the notice to the original contractor. But if the general stonewalls you on who owns the building, the half of the requirement you could not perform stops being a requirement. Send that request the same way you would send the notice, so the date of receipt is a fact and not an argument.

The consequences are narrower than people assume, in both directions. Failure to comply renders that portion of the lien claim for which no notice was sent invalid and unenforceable, so a partial miss costs you the part it covers rather than the lien. One notice covers a whole project: 142.6(B)(2) says nothing requires more than one pre lien notice during the course of a construction project, and a notice sent for one supply protects your lien rights for anything you furnish later on the same job. Retainage held by agreement needs no notice at all. Against that, 142.6(C) makes you hand the county clerk a notarized affidavit verifying compliance at the time you file the lien statement, and a claimant who falsifies that affidavit is guilty of a misdemeanor punishable by a fine of up to five thousand dollars, up to thirty days in the county jail, or both. After the lien is filed the clerk takes over: 42 O.S. 143.1 gives the county clerk five business days to mail notice of the lien to the owner by certified mail, you supply the last known addresses and pay the fee, and if the owner cannot be found with due diligence you have sixty days from filing to serve the occupant or post a copy on the property.

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

Working in another state? The general lien waiver forms page covers all four waiver types, lien waiver laws by state is every state in two tables with the section that governs each one, 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.