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What is a Lien Waiver?
A lien waiver is a written agreement that, when signed, indicates that the counterparty will give up rights to file a lien against a payer. In other words, when a lien waiver is signed, the signer agrees that all dues have been paid and that they have no right to seize property or goods.
Purpose of a Lien Waiver
Lien waivers exist to protect all parties involved in a business transaction . Typically, lien waivers are requested at the time of payment. The paying party may require a lien waiver to be signed before they will release their payment. In exchange for signing the lien waiver, the party providing services is promised payment.
Lien waivers also help make sure projects go as smoothly as possible. The construction industry is one of the most common entities that use lien waivers. Construction projects typically consist of multiple milestones before a job is completed.
Project managers must ensure that no liens on property or goods are placed throughout the project to keep the job running smoothly. Lien waivers do two things in these scenarios:
- Serves as a receipt of payment
- Ensures no liens are placed mid-project
Lien waivers are always a good idea to create and sign for any construction project along with a construction contract . They add an extra layer of protection for claimants, but they can also compel clients to pay quickly since the avoidance of a lien depends on no missed payment or returned checks for the duration of the agreement.
Since lien waivers add an extra layer of protection for the paying party, in many cases, these waivers usher payment along more quickly. This is because project managers may need to go through a shorter approval process when a lien waiver is present.
Lien waivers cannot be signed until the first day of the job has been completed successfully.
Check out this article to learn more about the purpose of a lien waiver.
Types of Lien Waivers
There are four different types of lien waivers. Each of these is slightly different in its approach, but the end goal is the same for all: to get rid of liens on a project.
Conditional Lien Waiver on Progress Payment
A conditional waiver on progress payment is a lien waiver that indicates that if payments are up to date, the right to place a lien is waived. This waiver becomes void in the event of a returned check or stopped payment
This type of waiver is generally most beneficial to the claimant.
Unconditional Lien Waiver on Progress Payment
An unconditional lien waiver on progress payment releases a claimant’s right to place a lien on goods or property as of a pre-determined date. This waiver becomes invalid if a check is returned or a stopped payment takes place.
Conditional Lien Waiver on Final Payment
A conditional lien waiver on final payment indicates that a claimant waives all rights to place a lien if all payments have been received as requested and no stopped payments or returned checks have been involved.
This is the safest type of lien waiver for owners.
Unconditional Lien Waiver on Final Payment
An unconditional lien waiver on final payment indicates that a claimant relinquishes all rights to file a lien once payments have been made in full. Claimants should only issue these types of waivers when the job has been completed in full, and payment has been received and is fully cleared.
Owners should request an unconditional lien waiver on final payment when the work they contracted the claimant for is complete, and the final payment has been made.
Here is an article where you can learn more about the four types of lien waivers.
Image via Pexels by Rodolfo
Lien Waiver vs. Release of Lien
Even though a lien waiver and a release of lien may sound similar, they couldn’t be more different.
Key Differences Between a Lien Waiver and Release of Lien
One of the main differences between a lien waiver and a release of lien involves when they are signed.
Lien waivers are useful for protecting owners and claimants from having an active lien. They are signed with the sole purpose of recording that no liens will be filed if certain conditions are met; most of the time, that means that payments must be made either on time or in full.
On the other hand, a release of lien is only necessary if a lien on goods or property has already been placed. In simple terms, instead of preventing a lien from occurring, a release of lien removes a lien once conditions are met.
Another major difference between a lien waiver and a release of lien lies in what they do for the claimant.
When a lien release is signed, claimants relinquish their right to place a lien on property or goods. However, when a release of lien is signed, the claimant agrees to remove the placed lien in exchange for certain conditions, usually money.
When it comes to legality, lien releases are taken much more seriously by the government. This is evident because many states have strict requirements that require lien release paperwork to be filed when a lien is lifted. However, no states have any strict requirements when it comes to filing a lien waiver.
Key Similarities Between a Lien Waiver and a Release of Lien
Even though lien waivers and lien releases have their differences, they are alike in some ways, as well. For one, they are both designed to take on some form of lien control. They are also mutually beneficial for both claimants and owners.
For example, the purpose of each document is to effectively get rid of a lien. They also both exist to foster a positive relationship between owners and claimants.
Another notable similarity is that neither document can be sent until after the project has begun. That’s right – if the job hasn’t started, this documentation cannot be signed off on yet.
Depending on the state you live in, failing to file a lien release or lien waiver can get you into some serious legal trouble. Neglecting to file one of these documents is grounds for hefty fees, fines, and penalties.
Learn more about the similarities and differences of lien waivers and lien releases by checking out this article .
How Do I get a Lien Waiver?
The easiest way to get a lien waiver is to connect with a lawyer in your area specializing in liens and lien waivers. Since the phrasing and paperwork can get a bit confusing, it’s always a good idea to have a professional in your corner.
If you’d rather get connected with qualified lawyers online without leaving your bed, consider posting a project on ContractsCounsel. Our online database of highly qualified lawyers includes many specialty lawyers who can help you through to process of getting a lien waiver.
Don't wait if you need to get in touch with a lawyer to help you with this type of waiver! There’s no better time than the present to get the ball rolling in your direction.
Meet some of our Lien Waiver Lawyers
Attorney Greg Corbin is the founder and principal of Signal Law in Denver, Colorado. A top-rated trial and transactional lawyer with more than seven years of total legal experience, Mr. Corbin provides exceptional counsel and support to clients across the greater Denver metro and surrounding areas who have legal needs involving any of the following: business and corporate law; contracts and agreements; incorporations, partnerships and other entity formation and dissolution services; and ongoing business counsel for emerging and expanding commercial enterprises. Utilizing the latest in cost-saving technologies and advanced automation, Mr. Corbin has established his practice as a modern law firm ready for the future, and he strives to provide the highest level of representation to his clients and help them achieve their goals and the favorable outcomes they seek as efficiently and cost-effectively as possible. He has gained a reputation for his innovative solutions as well as his transparent pricing structure and responsiveness when dealing with his clients. In recognition of his outstanding professionalism and service, Mr. Corbin has earned consistent top rankings and endorsements from his peers as being among the top lawyers in his region for business law and transactions. A 2008 graduate of Kansas State University, Mr. Corbin obtained his Juris Doctor from Boston University School of Law in 2013. The Massachusetts Bar Association admitted him to practice that same year, and the Colorado State Bar Association admitted him in 2015. Mr. Corbin is an active member of the Denver Bar Association and the Colorado State Bar Association, among his other professional affiliations, and he supports his local community through his involvement with Project Worthmore and Biking for Baseball, where he serves on the boards of directors.
The Law Office of David Watson, LLC provides comprehensive and individualized estate-planning services for all stages and phases of life. I listen to your goals and priorities and offer a range of estate-planning services, including trusts, wills, living wills, durable powers of attorney, and other plans to meet your goals. And for convenience and transparency, many estate-planning services are provided at a flat rate.
Experienced contracts and business attorney with years of experience advising entrepreneurs and small businesses. Currently act as general counsel to multiple companies with millions in annual revenue. My specialty is creative legal problem solving with solutions tailored to your business.
My career interests are to practice Transactional Corporate Law, including Business Start Up, and Mergers and Acquisitions, as well as Real Estate Law, Estate Planning Law, and Intellectual Property Law. I am currently licensed in Arizona and Pennsylvania, after having moved to Phoenix in September 2019. I am currently General Counsel for a bioengineering company. I handle everything from their Mergers & Acquisitions, Private Placement Memorandums, and Articles of Amendment to Intellectual Property Assignments, to Employment Law and Beach of Contract settlements. I have 4 years experience handling commercial breach of contract cases working with Burton Neil & Associates, P.C. I have experience with Intellectual Property infringement after having worked for Ryley Carlock & Applewhite. I have also recently gained experience with Estate Planning law, drafting numerous Estate Planning documents for people such as Wills, Powers of Attorney, Healthcare Directives, and Trusts. I am looking to further gain legal experience in these fields of law as well as expand my legal experience assisting business start ups, mergers and acquisitions and also trademark registration and licensing.
Atilla Z. Baksay is a Colorado-based attorney practicing transactional and corporate law as well as securities regulation. Atilla represents clients in the negotiation and drafting of transactional (e.g. master service, purchase and sale, license, IP, and SaaS agreements) and corporate (e.g. restricted stock transfers, stock options plans, convertible notes/SAFE/SAFT agreements, bylaws/operating agreements, loan agreements, personal guarantees, and security agreements) contracts, in-house documents (e.g. employment policies, separation agreements, employment/independent contractor/consultant agreements, NDAs, brokerage relationship policies, and office policy memoranda), and digital policies (e.g. terms of service, privacy policies, CCPA notices, and GDPR notices). Atilla also reviews, and issues legal opinions concerning, the security status of digital currencies and assets. Following law school, Atilla practiced international trade law at the Executive Office of the President, Office of the United States Trade Representative, where his practice spanned economic sanctions enacted against goods originating in the People’s Republic of China valued at $500 billion. Afterwards, Atilla joined a Colorado law firm practicing civil litigation, where the majority of his practice comprised of construction defect suits. Today, Atilla's practice spans all corporate matters for clients in Colorado and the District of Columbia.
After graduating from The University of Chicago Law School in 2002, Clara spent eight years in private practice representing clients in complex commercial real estate, merger and acquisition, branding, and other transactional matters. Clara then worked as in-house counsel to a large financial services company, handling intellectual property, vendor contracts, technology, privacy, cybersecurity, licensing, marketing, and otherwise supporting general operations. She opened her own practice in September of 2017 and represents hedge funds, financial services companies, and technology companies in a range of transactional matters.
Founder and owner of Grant Phillips Law.. Practicing and licensed in NY, NJ & Fl with focus on small businesses across the country that are stuck in predatory commercial loans. The firm specializes in representing business owners with Merchant Cash Advances or Factoring Arrangments they can no longer afford. The firms clients include restaurants, truckers, contractors, for profit schools, doctors and corner supermarkets to name a few. GRANT PHILLIPS LAW, PLLC. is at the cutting edge of bringing affordable and expert legal representation on behalf of Merchants stuck with predatory loans or other financial instruments that drain the companies revenues. Grant Phillips Law will defend small businesses with Merchant Cash Advances they can no longer afford. Whether you have been sued, a UCC lien filed against your receivables or your bank account is levied or frozen, we have your back. See more at www.grantphillipslaw.com