Lien Waiver Form

What is a Lien Waiver?

A lien waiver is a document in which a contractor, subcontractor, supplier or equipment lessor gives up its right to place a mechanics lien on a property, in exchange for payment. The claimant signs it. The owner collects it.

The same document is called a lien release, a waiver of lien, or a waiver and release. The lien release form entry covers the terminology.

For an owner or the project manager acting for one, collecting waivers is a payment control rather than paperwork. Lien rights belong to each claimant individually, so a release from the general contractor does not release the subcontractor two tiers below who filed a preliminary notice.

Lien Waiver Form Example

Here's an example of a completed lien waiver form, a conditional waiver on final payment signed by a general contractor for $248,317.40.

The Four Types of Lien Waiver

Two questions produce four forms: does the release take effect on signature or when payment clears, and does it cover one payment period or the whole job?

1. Conditional waiver and release on progress payment. Releases nothing until the payment clears. Require it before you release a progress payment.
2. Unconditional waiver and release on progress payment. Effective the moment it is signed, paid or not. Require it after the progress payment has cleared.
3. Conditional waiver and release on final payment. Releases everything once final payment clears. Require it before you release final payment including retainage.
4. Unconditional waiver and release on final payment. The end of the claimant's lien rights on the project. Require it after final payment has cleared in full.

Conditional before the money clears, unconditional after. Taking the unconditional form early never helps the owner; it creates a claimant who has released rights without being paid.

Partial means the same as progress: one payment period, with retainage and later work intact. Final covers the whole job.

Two mistakes recur. Issuing unconditional waivers too early, and using a final waiver while retainage or a pending change order is still outstanding.

What's Included in This Lien Waiver Form

Four forms to print and issue, plus the guidance to know which one to require and when.

Every form carries the same fields: project, owner, claimant and its role, the through date or date of last work, the amount, and an excluded from this release block. Anything not listed in it is released, so disputed claims, pending change orders, unbilled work, delay claims and retainage all have to be written in.

Forms 3 and 4 include a notary acknowledgment, to complete only where the state or the contract requires it.

States That Require a Statutory Lien Waiver Form

Twelve states prescribe lien waiver wording by statute: Arizona, California, Florida, Georgia, Massachusetts, Michigan, Mississippi, Missouri, Nevada, Texas, Utah and Wyoming. What the statute does varies, so check your own state's text rather than assuming.

Two examples, read from the state's own source:

Get the current statutory form from the state itself or its licensing board, not from a template library. Statutes are amended and forms are revised.

Substantial compliance can test more than wording. Some states also constrain type size, require specific notice language verbatim, or set when the release takes effect. Retyping a form from a template library is not the same as using the statutory one.

How to Fill Out a Lien Waiver Form

Build the collection list from the preliminary notices you received, not the contracts you signed. That is the only list that includes every party who can lien you.

1. Log every party that can lien the property, including sub-subcontractors and suppliers who sent a notice to owner or notice of furnishing.
2. When a payment application arrives, note the period it covers and the amount claimed, since the waiver has to match both.
3. Require a conditional progress waiver from each claimant before you pay, because they can sign it safely and most will without argument.
4. Check the through date and the amount against the payment application before the money moves.
5. Release funds.
6. Require an unconditional progress waiver once funds have cleared, not once they have been sent.
7. At final payment, run the same two steps again: conditional before, unconditional after.
8. Copy the claimant's legal entity name exactly as it appears on its notice, since a release signed by "Vance Mechanical" does not obviously release a lien claimed by "Vance Mechanical Inc."
9. List everything the release does not cover in the exclusions block.
10. Keep the log current, because your lender and title company will audit it.

Where a lower-tier subcontractor will not provide a waiver, a check made jointly to it and the party above it puts the money where the lien risk sits.

Common Lien Waiver Mistakes

Most lien waiver failures come down to two things: collecting from the wrong list of parties, or taking the unconditional form before the money has cleared. Both leave an owner exposed to a claimant who can still lien the property after being paid.

• You collected the general contractor's waiver, paid, and a subcontractor liened you anyway. Lien rights belong to each claimant individually.
• You accepted an unconditional waiver against a payment that had not cleared. It is effective on signature, so if the payment is stopped or reversed the claimant has released rights it was never paid for, and that is the position it will litigate.
• The through date is earlier than the period you paid for. A waiver releases claims only through the date written on it. Pay an application covering July against a waiver dated 30 June and one month is unreleased.
• You took a final unconditional waiver while retainage was still outstanding. This harms the claimant, which is exactly why it costs you.
• The waiver was written into the subcontract before the work started. A waiver signed in advance is void by statute in Georgia and unenforceable in Florida.
• The waivers track the base contract and nobody collected one for the change orders. Change orders are often billed and approved separately.
• You used your own form in a state that prescribes one. In Florida, requiring a form other than the statutory one is prohibited outright.

Build the collection list from the preliminary notices you received rather than the contracts you signed, and never take an unconditional waiver before funds clear. Those two controls prevent most of the list above.

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Related Articles and Templates

Explore these resources for lien waivers, pay applications, progress payments, and payment certification:

• Lien Waiver: Definitive Guide for Construction Projects
• Construction Payment Management: Process, Challenges, and Best Practices
• Pay Application
• Application and Certificate for Payment: Guide for PMs, Owners, and Contractors
• AIA G702: Guide for PMs, Owners, and Contractors
• Payment Certificate Template
• Progress Payment Template