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MarylandLien Waivers

The company I work for is constantly asked to complete waivers and releases relating to projects that we are not directly related to, meaning we did not sign a subcontract. We are an aggregate reclamation facility and trucks drive onto our lots and either dump or haul away material. Our customers will ask us to sign off on waivers with the following wording: The undersigned Subcontractor, in consideration of a Full & Final payment as set forth herein, hereby waives all mechanic’s liens and rights to file mechanic’s liens and generally releases and agrees to indemnify and save harmless, Company A and the above Owner and their sureties, their successors and assigns, from all causes of action, suits, debts, contracts, damages, judgments, decrees, claims, bond claims, demands, liens, rights to assert liens, awards and expenses, including attorneys’ fees, in law, equity or otherwise, which Subcontractor, its subcontractors and suppliers, their successors and assigns and any persons claiming through them or based upon their acts or omissions ever had, now have or hereafter may have against Company A or the above Owner, and any real property or improvements of Owner, from the beginning of the world to the date of this Release, in any manner relating to or arising in connection with the above referenced contract or project. Subcontractor represents that the amounts set forth below are correct and that the amount of the current payment due will promptly be applied to a Full & Final payment of all outstanding amounts due from Subcontractor to others in connection with the Project. My question is does this wording release all of the Owner's Subcontractors that might be working on a project or just the one (Company A) who is asking us to complete the waiver? We don't want to sign for Company A when companies B, & C might still owe us money and the waiver is no that specific. And, how can I modify the waiver so it is specific to just the one customer of ours.

1 reply

Sep 19, 2019
Mechanics lien waivers can be tricky, particularly when working under several different parties on the same construction project. As you mention above, it's natural to worry about signing a lien waiver that's too broad and waives too many rights. And, since Maryland is a state without statutory lien waivers, it's unfortunately not all that surprising that some businesses try to stuff lien waivers with questionable content. More on that here: Should You Sign That Lien Waiver? With that being said, let's take a closer look at the waiver text you mention above. Keep in mind, though - I'm not able to provide you legal advice or advise you on how to proceed. Though, I can provide some information to help you make your own determinations. Waiver text It's worth pointing out that the waiver text you pasted above purports to waive lien rights "in consideration of a Full & Final payment as set forth herein." So, off the bat, it references payment in full based on that specific waiver (rather than full payment for an entire job). Further, the waiver purports to waive any and all lien rights "from the beginning of the world to the date of this Release, in any manner relating to or arising in connection with the above referenced contract or project." So, when someone signs the waiver, they confirm that they're waiving any and all lien rights that have ever existed in the project, to the date the waiver is submitted. And, in a situation where work is being done under multiple agreements for the same project, waiving all lien rights for the entire project based on receipt of payment from one customer might prohibit using or leveraging lien rights under other agreements with different customers for that same project.  And, on top of that, the waiver does seem to attempt to waive potential future rights. Modifying a lien waiver As I mentioned above, I'm not able to provide you with legal advice - including how you should modify your waivers to best protect your work in your specific situation. However, more generally - using a lien waiver that only waives lien rights based on the specific agreement that's being paid for would be helpful in situations where work is being provided for multiple parties on the same project. Submitting a lien waiver that purports to waive rights for the entire project - when there might be other payments outstanding from other parties on the job - could lead to an unintended loss of rights. When in doubt, using a very simple, intentional, and clearly-worded lien waiver is often helpful. That way, there's less room for interpretation. For more on lien waivers: (1) Lien Waiver Guide, Forms, & Resources (2) The Ultimate Guide to Lien Waivers
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