A joint check is a payment made out to two payees, for example “Volt Electric and Acme Supply.” Both must endorse it, so the supplier knows it will be paid from the funds. It is usually governed by a joint check agreement among the GC, the sub and the supplier that spells out which invoices it covers. Rules and the legal effect vary by state; this is not legal advice.
Why it matters
Suppliers to a sub can usually lien the project even if the GC has paid the sub. When a sub is financially shaky or a supplier has sent a preliminary notice, joint checks protect the GC and owner from paying twice. They also add admin work and can strain relationships, so they’re used selectively.
Worked example
Illustrative: on Riverside Medical Center, a gear supplier to Volt Electric sends a preliminary notice for $120,000 of switchgear. The GC, Volt and the supplier sign a joint check agreement. On the next payment, the GC issues $120,000 as a joint check to Volt and the supplier, and collects a conditional waiver from the supplier with it.
Common mistakes
- Issuing joint checks without a written agreement defining scope.
- Not collecting a lien waiver from the supplier with the joint check.
- Forgetting to reduce the sub’s balance by the joint check amount.
How os.construction handles it
We’re building AP payments that can record a joint payee against the right commitment and invoice, so the payment, waiver and balance stay connected.