Joint checks are checks paid to more than one person. When a joint check is issued, it is usually made out to the subcontractor as payment for that sub’s performance and is also made payable to the supplier from whom the sub obtained his materials. This insures the supplier receives the check, takes the amount owed and remits the balance to the sub. This procedure reduces the general contractor’s or owner’s rick of a Mechanics’ Lien or Stop Notice claim being made by the supplier.

The joint check benefits all parties involved in the job. By signing a joint check agreement, the sub is making it easier for the material supplier to extend credit, knowing the risk of not getting paid has been reduced.

The general contractor typically has no idea of the amount of direct dollars owed to the supplier by his sub. Yet the general contractor is concerned about potential Mechanics’ Liens being filed against the job by suppliers who haven’t been paid. The joint check will insure the amount of dollars owed to the supplier is paid.

A joint check agreement should clearly identify how much and when the balance is due, and should extend to the general contractor a contractual obligation that guarantees the dollars will be coming in a timely manner. It is important to verify the check has sufficient funds backing it so it won’t bounce. This procedure should be followed before any type of a lien waiver or payment release is provided.