Glossary
Lien waiver
Also called: lien release · waiver of lien
A lien waiver is a document in which a contractor, subcontractor or supplier gives up some or all of their right to place a lien on a property, usually in exchange for a payment.
Waivers are conditional or unconditional, and progress or final. A conditional waiver takes effect only once the payment it describes has actually been received; an unconditional one takes effect the moment it is signed. A progress waiver covers work through a stated date; a final waiver gives up lien rights on the whole job.
Owners, lenders and general contractors collect them with each payment so they know the people who worked on a property have been paid. The rules — including whether specific statutory forms must be used — vary considerably from state to state.
Why it matters to a contractor
Signed at the wrong moment, a waiver gives away your strongest collection tool for money you have not received. Tracked properly against each payment, waivers stop being the reason a draw gets held up.
Work it out on your numbers
See also