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Why is a customer requesting a lein waiver?

PennsylvaniaBonding Off Lien

I am a small contractor and the job hasn't been even started yet.

1 reply

Jul 24, 2020

Lien waivers are often required by banks if the construction is being financed through a home equity loan or another loan that is secured by the property.  It doesn’t mean that the homeowner isn’t going to pay. 

However, if you sign it, I would recommend taking precautions. First, I would recommend trying to get the homeowner to agree to pay as much as possible upfront or at least getting payment for large cost items before ordering those materials. Also, you will need to make sure that you get your pay applications out in a timely fashion and immediately follow-up if payment is delayed.  If you do this and payment is not forthcoming, you can use the threat of halting work as leverage to get paid.

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