Process:

  1. Contractor and Owner agree to utilize Oak Covenant’s Payment System.
  2. If not already performed by the Owner, or on behalf of the Owner, Contractor must enroll Owner’s Project in Oak Covenant’s Payment System at www.oakcovenant.com (the portal).
  3. Contractor shall identify all entities with whom Contractor contracts to perform labor, materials or services on the Project on the portal.  Contractor may update this section as necessary throughout the project.  Owner may inform Oak Covenant by email (owner@oakcovenant.com) of any entities with whom Contractor contracts to perform labor, materials or services on the Project that are known to, or disclosed to, Owner. However, Contractor is solely responsible for ensuring contact information for all entities is provided to Oak Covenant through www.oakcovenant.com.
  4. All Contractor’s Request for Payment made by Contractor to Owner will be submitted by delivering Oak Covenant’s Contractor Payment Application Form (“Payment Application”) to Oak Covenant and Owner by email.  Submission of Payment Applications to Oak Covenant shall be sent to payapp@oakcovenant.com.
  5. No payment requested in a Payment Application shall be due and owing unless and until Necessary Waivers through the last date of work reflected in the submitted Payment Application have been provided to Owner and Oak Covenant. Submission of Necessary Waivers to Oak Covenant shall be sent to waivers@oakcovenant.com.  Necessary Waivers include:
    1. Partial Waiver and Release of Lien:  To be utilized when an entity contracting with a Contractor has not completed the work but is due a partial payment.
    2. Final Waiver and Release of Lien: To be utilized when an entity contracting with a Contractor has completed the work and is due final payment.
    3. Termination Agreement: To be used when a dispute has arisen between Contractor and an entity with which a Contractor contracted that can not be resolved to permit work to be completed by the entity.
  6. Upon receipt of a Payment Application, Oak Covenant will respond by email to Contractor and Owner with a complete list of entities disclosed by Contractor and a complete list of all entities for whom Oak Covenant reflects receipt of a Necessary Waiver.
  7. Owner shall make payment to Contractor within five (5) business days.

 

Necessary Waivers:

  1. Partial Waiver and Release of Lien: The Partial Waiver and Release of Lien form provided by Oak Covenant is unconditional.  If the Contractor is unable to obtain an unconditional waiver, but does not desire to enter into a Termination Agreement with the Lienor, said Lienor shall be listed by the Contractor as unpaid on the payment Application and Owner shall make payment directly to Lienor in the amount listed therein in exchange for an unconditional release of lien.
  2. Final Waiver and Release of Lien: The Partial Waiver and Release of Lien form provided by Oak Covenant must be unconditional as it is the basis for the final accounting between Owner and Contractor. In the event an entity performs work pursuant to contract early in the project and provides a final lien waiver, only to be hired for a separate contract later in the project, Contractor must relist the entity with Oak Covenant for the subsequent contract.
  3. Termination Agreement: Events may arise such that disputes arising related to subcontract agreements cannot be resolved. Termination Agreements may be substituted for Waivers at the Contractor’s sole option.
    1. Such substitution constitutes Contractor’s agreement the amount identified in the Lienor’s Termination Agreement will be secured by, at Contractor’s sole option: (a) a letter of credit from Contractor’s chosen financial institution; or (b) payment of the amount identified in the Lienor’s Termination Agreement from Owner directly to Lienor identified therein.
    2. In the event any Payment Application is insufficient to pay the total amount of all Lienor Termination Agreements submitted by Contractor, Contractor shall, within forty-eight (48) hours of submission, identify for Owner and Lienors the reason for such shortage. If the reason for such shortage is not a contractual dispute between Contractor and Lienor(s) regarding scope of work for which Contractor seeks payment from Owner, Contractor shall provide payment of such shortage from Contractor’s own funds curing the shortage.  In the absence of such payment by Contractor, Owner may make payment, consistent with any applicable state law, and Contractor shall be in material breach of this Agreement.  In the absence of applicable state law, Owner shall make no payment to Contractor pending a resolution of claims by lienors.

 

Entities contracting with Contractor:

    1. All entities contracting with Contractor (“Lienors”) shall provide Contractor and Oak Covenant (lienor@oakcovenant.com) with notice of their presence on the Owner’s project by email.
    2. All Lienor requests for payment from Contractor must be made through submission of Oak Covenant’s Lienor Payment Application Form (“Lienor Payment Application”). Said form should be delivered to Contractor with the appropriate Necessary Waiver for Payment Application to Owner.
    3. Upon demand made by Contractor to Lienor, Lienor shall receive from Lienor a completed Oak Covenant Lienor’s Termination Agreement. Substitution of a Lienor’s Termination Agreement for a Necessary Waiver constitutes Contractor’s agreement the amount identified in the Lienor’s Termination Agreement will be secured, at Contractor’s sole option: (a) by letter of credit from Contractor prior to payment becoming due; or (b) by payment of the amount identified in the Lienor’s Termination Agreement from Owner directly to Lienor under protest by Contractor.  Lienor’s failure to provide a Lienor’s Termination Agreement within five (5) business days of request by Contractor constitutes a material breach of this Agreement.