ContractsCounsel Logo
Home Types of Contracts Release of Lien

Release of Lien: Understanding the Basics

Jump to Section

ContractsCounsel has assisted 166 clients with releases of lien and maintains a network of 32 financial lawyers available daily.

Liens and Release of Liens

A release of lien form removes the lien claim from the property in question, whether it's real estate, a vehicle, or something else. In the case of subcontractors, once they've received all payments for work completed, they must file a release of lien with an appropriate governmental office, depending on the jurisdiction and the type of lien. In most cases, liens eventually expire on their own at a date set either by law or by the terms of the lien itself, but it's required in some states to file a release of lien within a specific time frame following the last payment related to the property in question.

Liens are commonly used legal contracts to ensure payment in a variety of industries and situations. Individuals often use liens to purchase high-cost items like homes or vehicles. For example, the dealership from which the driver purchased their car holds a lien on the vehicle until the driver makes all payments. This way, if the driver stops making payments, the dealership has legal recourse and can repossess the vehicle.

Other industries use liens as well. For example, large construction projects that employ contractors and subcontractors often use special lien waivers and release of liens to ensure all workers get paid appropriately. In this situation, the subcontractor would file a lien waiver, or a claim against the real property, which uses the property as a security. Should the contractor not pay the subcontractors what they're owed, the subcontractors have a claim on the property, and they can go to court to seek foreclosure in order to collect their missing wages.

You must file a lien with your county's record office or courthouse for the lien to be official and legally binding.

Lien Waiver vs. Lien Release

Some people use the terms "lien waiver" and "lien release" interchangeably, but they're very different documents. Particularly if you're a contractor or subcontractor, it's vital to understand the difference between these two items and use them appropriately.

Lien Waiver

A lien waiver is a document that the contractor gives to the subcontractor along with payment. It's essentially a lien receipt, tracking the amount of money paid to the subcontractor, which they should then discount from the total of the lien. Depending on the length of the job and payment structure, some contractors present a lien waiver with each paycheck, which the subcontractor signs and returns. Others provide a single lien waiver with the last paycheck, indicating they have paid the subcontractor in full.

Lien Release

A lien release, by contrast, is the legal document described above, which the subcontractor files with the county, stating they have received their full payment and no longer lay a claim to the property.

Meet some lawyers on our platform

Danny J.

13 projects on CC
CC verified
View Profile

Forest H.

243 projects on CC
CC verified
View Profile

Daniel R.

152 projects on CC
CC verified
View Profile

Zachary J.

387 projects on CC
CC verified
View Profile

Types of Liens and Lien Releases

Lien releases might look different and require specific information and supplementary materials depending on the type of lien and the industry and type of property it represents. Consider these four common types of lien releases:

  • Contractor's or mechanic's lien release: This lien is for vehicle mechanics or members of the construction industry awaiting payment on a project or repair, and it is most often released when the contractor or mechanic receives payment for their services.
  • IRS lien release form 12277: This form asks the IRS to release property debt upon the owner's final payment.
  • Mortgage lien release: Once all mortgage payments are complete, the homeowner can file a release of lien.
  • Partial release of lien: A partial release is filed after small payments towards the full amount have been paid. This is often used in the contractor/subcontractor situation.

Conditional vs. Unconditional

Most release of lien forms are drafted before the start of the project and then filed once work has finished and payment has been made. Release of lien forms can be either conditional or unconditional, which significantly impacts their value.

  • Conditional: Lien rights won't waive until full payment is made. Conditional release of lien forms are advisable since they're not effective until all conditions outlined in the contract are met.
  • Unconditional: These contracts are effective upon signing regardless of payment status. Unconditional forms release the signer of their lien claim even if they haven't received their full payment yet.

Contractors and subcontractors usually agree on one of four standard payment schemes, lien waivers, and lien release forms:

  • Conditional Waiver and Release Upon Progress Payment: This form is only valid once all the conditions of payment have been met. The form is provided with each payment, so the recipient will often sign more than one as they receive regular payouts.
  • Unconditional Waiver and Release Upon Progress Payment: This form becomes valid as soon as it's signed, whether or not the recipient has received payment. It's also provided with each pay cycle, so the subcontractor will usually sign more than one throughout the project.
  • Conditional Waiver and Release Upon Final Payment: This form is valid once all the listed conditions are met. It's only provided once, along with the final payment for the project.
  • Unconditional Waiver and Release Upon Final Payment: This form is automatically valid upon signature. It's offered at the conclusion of the project with the last payment.

Common Mistakes

If you're subcontracting on a construction job, ensure your lien appropriately protects you by taking these precautions:

  • Negotiate the form of release in the initial contract. You're bound by what the contract states once the contractor provides final payment.
  • Sign a conditional waiver. Conditional waivers are almost always the safest contract choice since you maintain your lien rights until you have cash in hand. With an unconditional waiver, it's valid the moment you sign regardless of payment status.
  • Establish an accurate through date. Make sure the through date in the contract matches what you anticipate earning overall. You could lose money even with a lien if you miscalculate your earnings.
  • Add exceptions to the release. Ensure you receive appropriate compensation in the case of delays, change in materials cost, or other wage-impacting situations by excluding these situations from your release of lien document.

Release of lien

Image via Unsplash by jessedo81

How to Get a Release of Lien

The process for obtaining a release of lien varies from state to state or county to county. Most record offices, though, follow a similar set of procedures. Check with your local recorder's office or courthouse to ensure you know exactly what you need for your specific situation. The general steps include:

  1. Preparing the appropriate form. In the case of subcontractors, this is the form you agreed on in your initial contract. For vehicle owners, your county might supply a specific template or form for you. Usually, you'll need information like claimant name, property in question, total amount paid, and date paid along with other related details.
  2. Obtaining signatures. The release of lien form usually needs to be signed by all vested parties for validity, along with the date.
  3. Notarizing the form. Some states require notarization, so check to see if that's necessary for your situation.
  4. Filing the release of lien. File the release of lien with your county recorder to ensure the property records are up to date.

Release of lien documents are highly important for both property owners and those who work on that property. Take the time to ensure your release of lien documents are accurate, account for any exceptions, and meet your expected wages before agreeing to it. Consider using the services of a contract lawyer to help you create an effective release of lien document.


ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Release of Lien Lawyers

Mark P. on ContractsCounsel
View Mark
4.6 (9)
Member Since:
July 21, 2023

Mark P.

Owner
Free Consultation
Kansas City, MO
9 Yrs Experience
Licensed in KS, MO, NE, TX
University of Missouri - Kansas City

www.parachinilaw.com I represent a diverse mix in a vast array of specialties, including litigation, contracts, compliance, business and financial strategies, and emerging industries. Credit for this foundation of strength goes to those who taught me. Skilled professors and professionals fostered my powerful educational and professional background. Prior to law school, I earned dual Bachelor’s degrees in Business Administration & Accounting from Peru State College. I received a Master of Business Administration degree from Chadron State College. My ambitions did not stop there. While working full time as a Senior Accountant for the University of Missouri, Columbia, I achieved the lifelong goal of becoming a licensed Certified Public Accountant (CPA). Mizzo provided excellent opportunities and amazing experiences. Managing over $50M in government and private research funding was a gift. As a high ranking professional in the Department of Research, I was given priceless insight into the greatest scientific, journalistic, medical, and legal minds in the world. My passion for successful growth did not, and has not stopped. I graduated summa cum laude (top 3%) with a Doctorate in Law, emphasizing in urban, land use and environmental/toxic tort law from the University of Missouri, Kansas City. This success lead to invaluable experiences of serving as Hon. Brian C. Wimes' judicial clerk for the U.S. District Court for the W. D. of Missouri, as a staff editor/writer for UMKC Law Review, and as a litigation and transactional attorney with Lathrop GPM (fka Lathrop & Gage). My professional and personal network is expansive, with established relationships throughout the U.S. and overseas. Although I engage in legal practice all over the country, I maintain law licenses in Missouri, Kansas, and Nebraska. Federally, I hold licenses in the W.D. and E.D. of Missouri and the District of Nebraska. To offer extra value, efficiency, and options, I maintain a CPA license and am obtaining a real-estate brokerage license.

Meghan T. on ContractsCounsel
View Meghan
4.8 (13)
Member Since:
February 1, 2022

Meghan T.

Partner
Free Consultation
Atlanta
5 Yrs Experience
Licensed in GA
Emory University

Meghan Thomas is an accomplished transactional attorney. She specializes in IP, real estate and tech related transactional matters, and business contracts. Meghan's innovative leadership style has attributed to the firm's rapid development and presence in the metro-Atlanta market. She obtained her Doctor of Law from Emory University where she worked with the State Attorney General and litigated property disputes for disadvantaged clients. ​ Prior to practicing, Meghan negotiated complex transactions for Fortune 500 tech and healthcare companies. She lives with her family in Southwest Atlanta, enjoys cooking, travel, dance and continues to develop her research in the areas of transactional law and legal sustainability.

Michael M. on ContractsCounsel
View Michael
4.9 (305)
Member Since:
September 10, 2022

Michael M.

Principal
Free Consultation
Los Angeles, CA
37 Yrs Experience
Licensed in CA
NYU

www.linkedin/in/michaelbmiller I am an experienced contracts professional having practiced nearly 3 decades in the areas of corporate, mergers and acquisitions, technology, start-up, intellectual property, real estate, employment law as well as informal dispute resolution. I enjoy providing a cost effective, high quality, timely solution with patience and empathy regarding client needs. I graduated from NYU Law School and attended Rutgers College and the London School of Economics as an undergraduate. I have worked at top Wall Street firms, top regional firms and have long term experience in my own practice. I would welcome the opportunity to be of service to you as a trusted fiduciary. In 2022 and 2023, I was the top ranked attorney on the Contract Counsel site based upon number of clients, quality of work and number of 5 Star reviews.

Thomas C. on ContractsCounsel
View Thomas
Member Since:
May 3, 2024

Thomas C.

Attorney
Free Consultation
New York, NY
20 Yrs Experience
Licensed in NY
Brooklyn Law School

I’ve been an attorney for over 20 years practicing mainly in the insurance industry. I’ve worked for law firms, insurance carriers, and insurance brokerages. I currently have my own firm where I help companies manage risk, insurance coverage issues and other business related matters.

Lisa C. on ContractsCounsel
View Lisa
Member Since:
May 8, 2024

Lisa C.

Attorney
Free Consultation
Chicago, Illinois
27 Yrs Experience
Licensed in IL
Northwestern Pritzker School of Law

Lisa Copland Gordon is a seasoned litigator who has practiced law in Illinois for over 25 years. She is a graduate of Northwestern Pritzker School of Law, with a concentration in Civil Litigation and Dispute Resolution. Lisa earned her undergraduate degree from Princeton University. Lisa provides counsel to clients in real estate matters including purchasing, selling, HOA and lease issues. She also represents clients and small businesses in all Cook County courthouse locations.

Jazmin M. on ContractsCounsel
View Jazmin
Member Since:
May 8, 2024

Jazmin M.

Business Lawyer
Free Consultation
Norfolk, Virginia
3 Yrs Experience
Licensed in VA
Regent University School of Law

Hi, I'm Jazmin M. Allen, Esq., your local, 757 Hampton Roads Business Lawyer & Brand Publicist. I am on a mission to help entrepreneurs and new business owners form their business entities, develop their business plans, market their brands, and protect their billion-dollar ideas.

Harry R. on ContractsCounsel
View Harry
Member Since:
May 12, 2024

Find the best lawyer for your project

Browse Lawyers Now

Business

Release of Lien

Illinois

Asked on Dec 16, 2021

Lien on business name

My husband and I started a transportation company recently and learned a Lein has been put on the business by a company we have never heard of nor have any affiliation with

T. Phillip B.

Answered Jan 11, 2022

I'm assuming this is a UCC Lien on the business assets. You can file a release yourself with the IL Secretary of State. There's also an affidavit that will go with it.

Read 1 attorney answer>
See more legal questions…

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

How It Works

Post Your Project

Get Free Bids to Compare

Hire Your Lawyer

Financial lawyers by top cities
See All Financial Lawyers
Release of Lien lawyers by city
See All Release of Lien Lawyers

ContractsCounsel User

Recent Project:
Lein Release
Location: Washington
Turnaround: Less than a week
Service: Drafting
Doc Type: Release of Lien
Number of Bids: 2
Bid Range: $200 - $900

ContractsCounsel User

Recent Project:
Mortgage release of lien, Texas
Location: Texas
Turnaround: Less than a week
Service: Drafting
Doc Type: Release of Lien
Number of Bids: 2
Bid Range: $350 - $550

How It Works

Post Your Project

Get Free Bids to Compare

Hire Your Lawyer

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city