What Is A Lien Waiver?
It’s a legal document in which a contractor, subcontractor, or supplier gives up their right to place a mechanics lien on a property in exchange for payment. It acts as a receipt for payment and protects property owners from double payments or future claims.
They are commonly used in construction projects to ensure smooth transactions between:
- General contractors
- Subcontractors
- Suppliers
- Property owners
Types of Lien Waivers
There are four main types of lien waivers, categorized by payment status and conditional/unconditional terms:
1. Conditional vs. Unconditional Waivers
| Type | When It Takes Effect | Risk Level |
|---|---|---|
| Conditional | Only valid after payment clears | Lower risk for contractors |
| Unconditional | Effective immediately upon signing (even before payment) | Higher risk for contractors |
2. Partial vs. Final Waivers
| Type | When Used | Purpose |
|---|---|---|
| Partial Waiver | For progress payments ( after completing 50% of work) | Waives lien rights up to a certain amount |
| Final Waiver | Upon project completion & full payment | Waives all future lien claims |
Why Are They Important?
Lien waivers protect both contractors and property owners:
For Contractors/Subcontractors:
Ensures timely payment before waiving rights.
Reduces legal disputes over unpaid work.
For Property Owners:
Prevents double payments (e.g., paying a subcontractor and then a general contractor for the same work).
Avoids mechanics liens, which can delay sales or refinancing.
How to Fill Out a Lien Waiver Form?
A valid lien waiver should include:
✔ Project details (property address, owner’s name)
✔ Contractor/subcontractor information
✔ Payment amount & date
✔ Type of waiver (conditional/unconditional, partial/final)
✔ Notarization (if required by state law)
⚠ Warning: Never sign an unconditional waiver before receiving payment—this removes your right to file a lien if payment fails.
Lien Waiver Laws
by State
Some states (like Texas & California) have mandatory statutory forms.
Others allow customized waivers but with strict guidelines.
Always check your state’s lien laws before signing or requesting a waiver.
FAQs
No. A lien release cancels an existing lien, while a lien waiver prevents a lien from being filed in the first place.
Yes, but the property owner or general contractor may withhold payment until it’s signed.
Conditional waiver: Invalid if payment fails.
Unconditional waiver: The signer loses lien rights, even if unpaid.
Yes, if they follow e-signature laws (ESIGN Act & UETA).
