Lien Waiver Cost

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What does a lien waiver cost? This is a question often asked by a lien holder who needs to waive future lien rights on a property. Let’s explore this question and review some general information about lien waivers and their use.

How Much Does a Lien Waiver Cost?

Lien waivers are legally binding written agreements most often used in the construction industry when a client and a contractor enter a construction agreement. This contract acts as a type of receipt from a contractor that states they have been paid for their services and waive future lien rights on a property.

A lien waiver is often requested at the time a payment is made. For example, when homeowners pay a contractor’s bill for work completed on their house, they request a lien waiver. The lien waiver states that the homeowner paid the contractor in total, and the contractor no longer has the right to file a lien against the homeowner.

The primary purpose of a lien waiver is to protect both parties involved in a business transaction. It affirms that one party has been paid in full for services and saves the paying party from having a lien placed on their property.

Lien waivers help projects run smoothly, so they must be drafted correctly and contain all necessary information. However, suppose a lien waiver is missing information or has mistakes. In that case, it can leave either party open to a civil lawsuit or delay a vital building project.

Many contractors hire a small business lawyer to draft lien waivers to avoid issues with projects and clients. A lawyer familiar with lien waivers will ensure that the contract is legally binding and that the terms and conditions protect both parties.

Based on ContractsCounsel’s marketplace data, the average cost of a project involving a lien waiver is $718.20.

Types of Lien Waivers

There are four types of lien waivers, and although each has the same purpose of avoiding a lien on a property, they vary slightly in approach and details.

  • Conditional Lien Waiver on Progress Payment. This lien waiver requires payments to be updated to waive the lien. If payments stop, the waiver is void, and a lien can be pursued on the property.
  • Unconditional Lien Waiver on Progress Payment. Releases a claimant’s right to place a lien on the property as of a pre-determined date. This waiver becomes invalid if a check is returned or a stopped payment occurs.
  • Conditional Lien Waiver on Final Payment. Under this lien, a claimant waives all rights to place a lien if all payments have been received and there haven’t been no stopped or returned checks.
  • Unconditional Lien Waiver on Final Payment. Dictates that a claimant relinquishes all rights to file a lien once payments have been made in full. Therefore, claimants should only issue these waivers when the job has been completed and payment has been received and cleared.

If you are unsure which type of lien waiver is right for your project, consult a lawyer with experience drafting lien waivers. Your lawyer can help you understand the pros and cons of each type of lien waiver and draft the waiver that best suits your needs.

Examples of Lien Waiver Projects

Lien Waiver Drafting Services

Lien waivers must be appropriately drafted to provide complete protection to both parties involved in the transaction. Lien waivers are issued by the party providing the service, like a contractor, so that party is responsible for drafting the document.

Many contractors choose to hire an experienced lawyer to draft their lien waiver. After a consultation to learn about the contractor's services, the attorney will help the contractor determine the best lien waiver for the project and draft a waiver that contains all necessary information and is legally binding.

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Lien Waiver Review Services

A contractor can draft their lien waiver using a template; however, before putting the waiver to use, it is recommended that they have it reviewed by an attorney.

Document templates are often vague and not state-specific. They may not include all necessary information or adhere to state laws that govern lien waivers. An attorney in your state can review the lien waiver to ensure it meets all requirements.

Lien Waiver Drafting Cost

A lawyer will charge a client for things like:

  • The time it takes to draft a lien waiver
  • Consulting time
  • Communication between the lawyer and client
  • Legal staff’s time

ContractsCounsel’s marketplace data shows that the average lien waiver drafting costs are $810.25 across all states.

Lien Waiver Review Cost

If you draft your lien waiver and hire a lawyer to review it, the lawyer will charge for their time and services. The lawyer will take their time and legal expertise to review the lien waiver and ensure it is drafted correctly.

ContractsCounsel’s marketplace data shows that the average lien waiver review costs are $350.00 across all states.

How Do Lawyers Charge for Lien Waivers?

Lawyers charge for legal services using two popular payment methods: hourly and flat fee.

Hourly Rates for Lien Waivers

Many lawyers across all legal fields bill for their time using an hourly rate fee schedule. The lawyer will inform the client of their hourly rate and then log time in a timesheet to be invoiced at the end of the project for any time spent working on the client’s case.

This fee structure benefits lawyers because they can be sure they receive compensation for all time they worked on a case or project. In addition, clients benefit by not paying a large lump sum legal fee upfront. However, clients should maintain contact with their lawyers to have realistic expectations for the cost of the final bill.

The marketplace data for ContractsCounsel shows that the average hourly rate for a business lawyer ranges from $200 - $350 per hour.

Flat Fee Rates for Lien Waivers

Flat fee billing structures are often used for drafting projects because, unlike an ongoing case with no definitive end, drafting a lien waiver is a one-time project.

A lawyer will estimate the time the lien waiver will take to draft and provide the client with a flat rate quote for the service. The benefit of flat fee billing is that it gives certainty to the client on the project's total cost.

The client must understand what’s included with the flat fee because it may not involve rounds of revisions or consultations.

ContractsCounsel's marketplace data shows that the average flat fee rate for a lien waiver is $718.20.

Get Help with a Lien Waiver

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