Lien Waivers

A lien waiver is the receipt the construction industry runs on. Every time an owner, lender or general contractor releases money, they want paper showing that the person paid has given up the right to lien the property for that money. Sign the right one and you have traded a lien right for cash you already hold. Sign the wrong one and you can give up the right before the check clears, or release retainage and unbilled change orders you never meant to touch.

Two questions decide every waiver. Is it conditional (it only takes effect once the payment it names is received) or unconditional (it takes effect on signature)? And is it for a progress payment through a date, or the final payment on the job? The four waiver types come from those two choices, and the conditional vs unconditional comparison covers the one that costs subcontractors the most money.

Some states, California and Texas among them, prescribe the exact wording of the form, and a waiver that strays from it may not be enforceable. Others leave the form to the parties. Check the state requirements before you sign a form a general contractor wrote, and remember that a waiver and a lien release are different documents: a waiver gives up a right before a lien exists, a release clears one that has already been recorded.