Definition

A lien waiver is a document by which a contractor or sub gives up (waives) the right to file a mechanics lien for work performed and paid (or for a progress payment). Owners and GCs typically require waivers with each payment to protect the property. Conditional waivers are effective upon payment; unconditional waivers are effective when signed (riskier for the signer).

Why It Matters

Signing a waiver without being paid can cost you your lien rights. Contractors must use the right type (conditional vs. unconditional, partial vs. final) and match the waiver to the payment received. Collecting waivers from subs when you pay them protects the owner and the GC from sub liens. State forms and rules vary.

Field Example

GC pays sub $10,000 for progress. GC requires a conditional waiver for $10,000—sub signs, waiving lien rights for that amount upon receipt of payment. When the check clears, the waiver is effective. For final payment, the owner may require unconditional final waivers from all subs before releasing final payment.

Calculation / Formula (if applicable)

Not applicable. Waiver amount should match payment amount (or scope covered). Partial waivers for progress; final waivers at project completion. State-specific forms often apply.

Software Application

When recording payment to a sub, allow attaching or generating a lien waiver (conditional partial, unconditional partial, conditional final, unconditional final). When recording payment from owner, allow uploading/attaching waivers from subs. Track waiver status by job and vendor. Store executed waivers; alert if payment is made without waiver when required.

Tooltip Version

A lien waiver is a document that gives up your right to lien for work covered by a payment; use conditional waivers so the waiver only takes effect when you’re paid, and collect waivers from subs when you pay them.

Lien Waivers