Two important things to understand about lien waivers:
- When a general contractor requests that a waiver be signed in exchange for payment, the burden of determining whether the correct form is being used and whether the amounts and dates are correct typically rests entirely on the party signing the waiver.
- Waivers cannot be undone.
To avoid compromising your lien or bond claim rights, it is essential to execute the correct form.
Because many states do not provide statutory waivers, the burden is placed on the sub trade to understand what is being asked in the waiver and what rights are being given up.
Also, when property owners or general contractors produce waivers, they are often written in such a way as to benefit the owner.
If you have been asked to sign a lien waiver, ask yourself whether the state where the project is located has statutory waivers. If so, those forms should be used. Also, is the contract work complete and you’re waiting for final payment? Or is the project ongoing and you’re waiting for a progress payment?
Answering these questions will help determine which kind of waiver should be used.
Seek advice from a lien claim attorney to ensure that you don’t give up your rights unnecessarily.
These are the types of lien waivers you may be asked to sign:
- Conditional Partial
- Unconditional Partial – Interim Waiver
- Conditional Final
- Unconditional Final
The lien waiver attorneys at Levy – von Beck & Associates are highly experienced in all matters related to lien and bond claims. If you have a waiver that includes an indemnification clause, we recommend that you get feedback from an attorney before signing. Inaccuracies and ambiguities in lien waivers can also prove costly.
For more on these matters, please see our overview of preliminary notices and lien claims.