1st you need to be cognizant of the regulations in effect in your state.
There are labor and/or material releases, as well as "preliminary notice of intent" time constraints.
In some cases there are restrictions governing payments and bonding requirements.
There are also a number or alternative, for fee, payment systems available, such as private escrows and lending institutions.

Know the law and keep scrupulous, detailed records

In what state are you? In Washington, it is very difficult to protect your assets... and most contractors make it difficult to deal with lien releases. Washington L&I has information about protecting yourself... Does your state have such a site?

Your contract should say that payments will be made upon signing of lien releases, and with each payment you should have your contractor sign one for the progress payment.

Here's a simple template I've used.

CONDITIONAL WAIVER AND RELEASE
UPON PROGRESS PAYMENT

Upon receipt by the undersigned of a

check from:

in the sum of:

payable to:

for invoice number:

and when the check has been properly endorsed and has been paid by the bank upon which it is drawn, this document shall become effective to release any mechanicâÂÂs lien, stop notice, or bond right the undersigned has

on the job of:

located at:

to the following extent.

This release covers a progress payment for labor, service, equipment or material

furnished to:

through:

only and does not cover any retention retained before or after the release date; extras furnished before the release date for which payment has not been received; extras or items furnished after the release date. Rights based upon work performed or items furnished under written change order which has been fully executed by the parties prior to the release date are covered by this release unless specifically reserved by the claimant in the release. This release of any mechanicâÂÂs lien, stop notice, or bond right shall not otherwise affect the contract rights, including rights between parties to the contract based upon a rescission, abandonment, or breach of the contract, or the right of the undersigned to recover compensation for furnished labor, services, equipment, or material covered by this release if that furnished labor, services, equipment, or material was not compensated by the progress payment. Before any recipient of this document relies on it, said party should verify evidence of payment to the undersigned.

Dated:

Company:

Signature:

By: (Print Name & Title)

Weedy,

Your inputs are timely since we are thinking about contract and lien release.

A few more questions:

1. Does this mean we only need one lien releases signed by GC? and it will cover all the subs, and the people they hire as well as the equipments, materials they provide/use?

2. If we have scheduled 5 progressive payments, we would need to have 5 signed line releases?

3. Do we need to have a lawyer to review contract? Is lien release a part of contract? What other components should be included to be reviewed by a lawyer?

Thank you in advance for the reply.