What is a Bond Claim?

A Pay-if-Paid Clause is a contractual agreement prevalent in the construction industry. Generally, this clause can be found in subcontracts between the General Contractor(GC) and their subcontractors. According to the clause, the GC is not obliged to pay the subcontractors unless and until they themselves have received full payment from the project owner. Therefore, it effectively transfers the risk of the project owner's insolvency from the GC to their subcontractors. It serves as a protection for the GC against financial instability. This type of clause has its controversies, as some jurisdictions view it as unfair to subcontractors due to the assignment of financial risk.

Billings in excess of costs (also called overbillings) occur when you’ve invoiced your client for more work than you’ve actually completed or incurred costs for. In other words, it represents getting paid ahead of your work schedule.

Here’s how it works: If you’re a concrete subcontractor on a $100,000 job and you bill 50% upfront ($50,000) but have only completed $30,000 worth of work, that $20,000 difference is your billings in excess of costs. You owe your client that work, and until you complete it, that $20,000 remains as a liability on your balance sheet.

For subcontractors, understanding billing in excess of costs is essential because it can be a strategic cash flow tool when used carefully. For example, when bidding on a job, you can be smart about how you structure your schedule of values (SOV)—breaking work down into more detailed line items that allow earlier billing. However, this strategy requires regular monitoring to ensure:

• Your billing somewhat aligns with your actual percentage complete, and 
• The remaining contract value will still cover your remaining costs.

The biggest risk of overbilling is thinking your margins look better than they are, simply because you’re collecting cash faster. Surety companies and lenders also scrutinize overbillings closely, as excessive amounts can signal poor project management or potential cash flow problems down the road.

With Siteline, you can easily track whether you’re billing in excess of your costs by pulling your month-to-month incurred costs and comparing them against your billing progress. This real-time visibility helps ensure you’re billing appropriately while maintaining realistic profitability expectations. If you’re interested in seeing for yourself, schedule a personalized demo of Siteline here.

A conditional lien waiver is a legal document used in the construction industry that states a contractor, subcontractor, or supplier will give up or waive their right to place a lien on a property, under the condition they receive their expected payment. This waiver serves as a protection mechanism for the party responsible for payment, ensuring that once the payment is made, no future lien could be placed on the property for the services or materials provided.

Conditional waivers come in two forms, tied to when you're billing:

1. ‍Conditional progress waiver: Submitted with each progress pay application during the project. It waives your lien rights for the work billed in that period, but only takes effect once you're paid for that period.‍
2. Conditional final waiver: Submitted with your final pay application at closeout. It waives your lien rights for the entire project, including retainage, but only takes effect once you receive full and final payment.

In both cases, the "conditional" part is what protects you: your lien rights stay intact until the payment actually clears, so signing early doesn't cost you leverage if a check is late or bounces.