Lien Waiver

What is a Lien Waiver?

A lien waiver is a legal document where a contractor, subcontractor, or material supplier waives their right to file a mechanics' lien against a property in exchange for payment.

It protects property owners from potential liens and provides proof that all parties have been paid for their work and materials.

Types of Lien Waivers

Conditional Waiver

Becomes effective only when payment is actually received, not just promised.

Unconditional Waiver

Effective immediately upon signing, regardless of whether payment has been received.

Progress Payment Waiver

Covers work completed up to a specific date or milestone.

Final Payment Waiver

Covers all work on the project and waives all lien rights permanently.

When They're Used

• Progress payments: Monthly or milestone-based payments during construction
• Final payment: Upon project completion before final payment release
• Material deliveries: When suppliers deliver materials to job sites
• Subcontractor payments: When general contractors pay subcontractors

Key Elements

Project identification: Property address and project description.

Payment amount: Specific dollar amount being waived for.

Time period: Dates or milestones covered by the waiver.

Signature and date: Legally binding signature of the person waiving rights.

Notarization: Some states require notarized signatures for validity.

Important Considerations

• Review carefully: Once signed, lien rights are typically lost forever
• Verify payment: Conditional waivers should only be signed after payment is confirmed
• State laws vary: Lien waiver requirements differ significantly by state
• Keep records: Maintain copies of all signed waivers for legal protection

Best Practices

• Never sign unconditional waivers until payment is in your account
• Review all waiver language carefully before signing
• Consider legal consultation for large projects or complex situations