Lien Waiver
A document signed by a contractor or supplier giving up the right to file a mechanic's lien against the property in exchange for payment.
A mechanic's lien is a legal claim against a property that a contractor, subcontractor, or material supplier can file if they are not paid for work or materials. A lien waiver is a written release of that lien right, exchanged for payment. There are four types: conditional waiver on progress payment, unconditional waiver on progress payment, conditional waiver on final payment, and unconditional waiver on final payment.
Conditional waivers take effect only when the payment clears; unconditional waivers take effect immediately upon signing regardless of whether payment actually clears. Homeowners should always request lien waivers—from the GC, each subcontractor, and major material suppliers—before making progress and final payments. A GC who does not pay their subs can leave the homeowner exposed to lien claims even after paying the GC in full.
Lien laws vary by state; some states require specific language or notarization. In high-dollar projects, a title company can be engaged to coordinate lien waiver collection. Ignoring lien waivers is one of the most common and costly mistakes homeowners make in renovation projects.
Real-World Example
Before releasing the final payment check, the homeowner required the GC to provide unconditional lien waivers from the electrical and HVAC subcontractors.