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About lien waivers in general

We have hired a contractor to do repairs and roofing on our home. He is using sub-contractors to do the work. We want to make sure that when we pay him, that if he does not pay his sub-contractors, or for materials received from suppliers, that they will not be able to place a lien on our house for their payment due. Does a lien waiver provided to us by our contractor insure that his sub-contractors cannot place a lien on our house?

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May 22, 2020

The best way for an owner to protect themselves from mechanics liens from subs and suppliers is to require lien waivers from everyone on the job. Levelset discusses that here: (1) How To Handle Requesting & Tracking Lien Waivers; and (2) The Property Owner’s Guide to Lien Waivers. Lien waivers should generally act like receipts - any time someone on the job gets paid, they should be required to provide a lien waiver in exchange. And, if you're missing a lien waiver from someone on the job, that's a good indicator you should reach out to see what's going on. That way, any payment issues can be nipped in the bud. Additionally, using joint checks can be another tool to help make sure that project funds aren't improperly used. Though, if the contract is already signed with your contractor, it might be hard to get them to agree to joint checks. Further joint check discussion here: What Is A Joint Check Agreement? Finally, requiring your contractor to provide a written affidavit stating that they have paid their subs or will use those project funds to fully pay their subs can be an additional line of defense. That language is often included directly in the lien waiver. That way, if the contractor signs it, they're promising they'll use the funds as required. If the contractor breaks that promise, then damages could be appropriate.

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