The Conditional Lien Release is a critical document in Malaysian construction projects, used when contractors or subcontractors need to provide assurance of lien release while protecting their right to payment. This document type emerged from the need to balance property owners' interests in maintaining clear title with contractors' rights to secure payment for their work. Under Malaysian law, particularly influenced by the Construction Industry Payment and Adjudication Act 2012 (CIPAA) and the Contracts Act 1950, the Conditional Lien Release serves as a legally binding agreement that specifies the terms under which a lien holder will release their claims against a property. It is commonly used in progress payment situations, final payment scenarios, or when resolving payment disputes in construction projects. The document typically includes detailed information about the project, parties involved, payment amounts, and specific conditions that must be met for the release to become effective.
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1. Parties: Identification of the Lien Holder (typically contractor/subcontractor) and the Property Owner/Principal
2. Background: Details of the original contract, project description, and circumstances leading to the lien
3. Definitions: Key terms used in the document including 'Payment Amount', 'Project', 'Lien Rights', 'Effective Date'
4. Amount of Claim: Specific amount of the lien claim being conditionally released
5. Project Identification: Detailed description of the project and property subject to the lien
6. Conditions for Release: Specific conditions that must be met for the release to become effective, typically payment terms
7. Scope of Release: Extent of the release and any rights reserved by the releasing party
8. Representations and Warranties: Statements confirming authority to release lien and other standard warranties
9. Execution: Signature blocks and attestation requirements
1. Through Date Specification: Used when the release covers work only through a specific date rather than the entire project
2. Partial Release Provisions: Include when the release covers only a portion of the total lien amount
3. Subordinate Parties: Required when there are lower-tier contractors or suppliers whose rights are affected
4. Governing Law and Jurisdiction: Include when parties are from different states or when specific jurisdiction needs to be established
5. Notarization Requirements: Include when document requires notarization under local requirements or by agreement
1. Schedule A - Property Description: Legal description of the property subject to the lien
2. Schedule B - Payment Details: Breakdown of the payment amount and payment method details
3. Schedule C - Original Contract Documents: List of relevant contract documents and dates
4. Appendix 1 - Progress Payment Certificates: Copies of relevant payment certificates if release is tied to specific progress payments
5. Appendix 2 - Supporting Documents: Any additional documentation supporting the lien claim and release conditions
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