What is a Lien Waiver?
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Lien Waiver FAQs
Lien waivers can be confusing, but they don't need to be. Find answers to some frequently asked questions below.
Map of Waiver Requirements
The lien waiver rules, forms, and specifics are different in every state. This map gives you an overview of some lien waiver requirements across the country.
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Lien waivers are documents exchanged at the time of payment in the construction industry. Typically, the party making payment requires the party receiving payment to sign a lien waiver. These documents are important to construction lenders, general contractors, subcontractors, suppliers, and others.
Lien waivers act like a “receipt” of payment. It is evidence that a job participant has received payment, and therefore, will not file a mechanic’s lien on the job for non-payment. The person or company signing is “waiving” any future lien rights in the project.
Those making payments on a job desire signed lien waivers to protect against mechanic’s lien being filed against the project. Since a mechanics lien filing presents financial and contractual problems on a construction project, those making payment benefit from withholding payment until certain that a lien will not be filed. Therefore, you should always request a lien waiver whenever making payment to a contractor, subcontractor, or supplier on a job. Requesting a lien waiver can be quite simple, even though tracking and managing all of your requests is an administrative pain. You can do it orally, in-person, by email, or electronically. You can electronically request a lien waiver right now — for free — by clicking here.
Those receiving payment on a job may need to review and sign a lien waiver before getting paid. Reading, managing, and responding to requests is an administrative step that slows down the payment process. The exchange also presents legal and financial risks, as it’s unfortunately common to sign over-broad or dangerously vague lien waivers that waive more rights than bargained for (Read: Should I Sign That Lien Waiver!?). Contractors & Suppliers can make payment go faster by getting very good and fast at executing and sending out lien waivers. You can electronically send a lien waiver right now – for free – by clicking here.
Lien waivers are pervasive on construction jobs. They are exchanged millions and millions of times on jobs across the country every year. Some companies have departments of people dedicated to signing and shipping, or tracking and receiving, lien waivers. And for this reason — because these documents are so frequently exchanged — the document is usually prepared, signed, and passed along without much fanfare or analysis. But the laws and cases can cause complications. A variety of factors can really impact everyone’s rights on the job, can invalidate the waiver altogether, and can sometimes even result in criminal charges.
Across the United States there are generally four types of lien waivers. It’s important to understand the differences and to use the right one for your payment situation. We wrote about these 4 different lien waivers in our Ultimate Guide to Lien Waivers.
• Conditional Waiver on Final Payment
• Conditional Waiver on Progress Payment
• Unconditional Waiver on Final Payment
• Unconditional Waiver on Progress Payment
Explore Levelset’s comprehensive resources, guides, faqs, and form template databases to get informed about lien waivers.