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Does a Lien Waver constitute final payment?

4 months ago

Providing industrial equipment on a job in NY. I requested and received a 50% deposit, and 50% Net 30 days. They gave me the deposit and the lien waver. It seems the lien waver states nothing additional is owed at this time. That is a true statement but another 50% will be due in a short while after the equipment is installed.

Chief Legal Officer Levelset

This is great question. Lien waivers can be confusing, especially since most states (like New York) do not have required or standardized lien waiver forms, so waivers can say whatever the parties agree to include.

Because New York does not have statutory forms, parties need to be careful with respect to what they are signing. However, just because there are not specifically required forms, it doesn’t mean that there is no regulation of lien waivers in New York.

In fact, New York specifically does not allow lien rights to be waived prior to payment. According to New York law, “any contract, agreement or understanding whereby the right to file or enforce any lien created under article two is waived, shall be void as against public policy and wholly unenforceable” unless the waiver is required only simultaneously with or after payment has been received.

That being said, however, it is still a good idea to carefully examine “lien waiver” documents to make sure that they only apply to waiving lien rights, and do not overreach in other ways.

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