What Is A Construction Lien Waiver Form?

KEY TAKEAWAYS 

• Lien waivers relinquish the right to place liens in exchange for payment.
• They serve as proof of payment, preventing future legal claims on property.
• Notarization isn't usually required, except in Texas, Wyoming, and Mississippi.

Attention Construction Industry! 

Need a lien waiver notarized?

We've got your back with a guide that will help you understand what a construction lien waiver is, its purpose, and how it works – as well as an easy notarization resource you can use.

1. Definition Of A Lien Waiver

A contractor lien release waiver is a written agreement between two parties: the payer (usually the property owner or the general contractor) and the counterparty (typically a contractor, subcontractor, or supplier).

This agreement involves the counterparty giving up their right to place a lien on the payer's property or goods.

2. The Purpose of Lien Waivers

Lien waivers are primarily used in the construction industry, especially during different phases of a project.

They serve a critical purpose - ensuring that all parties involved get paid for their services or supplies, and at the same time, they protect the property owner from potential legal disputes.

Here's how it works:

Payment Exchange

Throughout the various stages of a construction project, lien waivers may be exchanged as each service is completed and payment is received by each party. This is a common practice to ensure that everyone gets their fair share

Proof of Payment

Lien waivers act as a form of receipt, certifying that a payment has been made in full for the services or materials provided. This proof eliminates the possibility of a mechanic's lien being filed against the property in the future.

3. The Different Types of Lien Waivers

Lien waivers come in four main types, each serving a slightly different purpose:

• Unconditional Waiver and Release Upon Progress Payment - discharges all claimant rights through a specific date with no stipulations.
• Conditional Waiver and Release Upon Progress Payment - discharges all claimant rights through a specific date, but with the condition that payments have been received and processed.
• Unconditional Waiver and Release Upon Final Payment - extinguishes all claimant rights upon receipt of the final payment.
• Conditional Waiver and Release Upon Final Payment - extinguishes all claimant rights upon receipt of the final payment but with certain provisions.

4. When and How to Use Lien Waivers

Lien waivers are tools that can be easily integrated into the construction payment process, making it easy for everyone involved. They can be especially useful for contractors, subcontractors, and suppliers.

Here's how they are commonly used:

• Payment Assurance - Some parties, like property owners or general contractors, may require that a lien waiver be signed and delivered before releasing payment. This practice ensures that they won't face any future legal claims related to the project.
• Risk Mitigation - Contractors, subcontractors, and suppliers can use lien waivers as a way to secure their payments and reduce the risk of non-payment. By receiving a signed waiver, they have legal proof of payment.

5. Notarization: Is it Necessary?

Now, let's talk about notarization. In most cases, lien waivers do not need to be notarized. The process is pretty straightforward: both parties involved sign the document, and that's usually sufficient.

However, there are exceptions. In just three states - Texas, Wyoming, and Mississippi - lien waivers must be notarized to be effective.

6. Notarize Online With NotaryLive

To get your documents notarized with an online notary, you can utilize a platform like NotaryLive. NotaryLive is a trusted online notary service that enables individuals to have their documents notarized remotely through video conferencing.

Here's how NotaryLive Works in 4 simple steps:

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7. Construction Lien Waiver FAQ 

Are lien waivers legally binding?

Construction lien waivers are legally binding documents that waive the signer’s right to file a lien in the future, regardless of whether or not payment has been made. However, the enforceability of these waivers can vary depending on the state and the specific language used in the document.

What are the risks of not using a lien waiver? 

Not using a lien waiver can create unnecessary risks for all parties involved in a construction project. These risks include the possibility of fraud, delayed payments, and the inability to protect oneself from mechanic’s liens and bond claims.

What factors should be considered when drafting a lien waiver? 

When drafting a lien waiver, it is important to consider the specific language used in the document, as well as the enforceability of these waivers, which can vary depending on the state. Additionally, it is crucial to ensure that the details are accurate, including the amount and the period being covered, and that the waiver is effective only when payment has been received.

**Legal Disclaimer - We are not lawyers or attorneys and do not give any legal advice. Please check with your attorneys, advisors, or document recipients if you have any unanswered questions about your documents.

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