In the construction industry, lien waivers are prevalent. A lien waiver, also known as a lien release, is basically a very wordy receipt of payment for your services that waives the right for you to file a mechanic’s lien on the property you just constructed or repaired. Contractors can be asked to sign them, or may ask the party they are working for to sign them. Before you sign a lien waiver, you should read the fine print to ensure you actually are being paid for all services and you do not waive rights you should not wave at that particular time.
Specifics of a Lien Waiver
Prior to signing a lien waiver, look for the following content:
- Is the lien release for the right project?
- Does it contain the proper time frame of work on the project?
- Is the waiver a full lien or partial lien waiver?
- Is the payment amount correct, and did you actually receive the payment?
- Does it contain the names of the correct parties?
- What conditions, if any, are stipulated?
Final lien waivers infer you have received full payment and you will not be able to file a mechanic’s lien on the project at any time in the future. Partial lien waivers refer to a partial payment and you waive the right to place a lien on the project for that portion of work. Even if the title on the receipt stipulates “Final” or “Partial,” you must read it to ensure it has the proper wording.
Conditional Lien Waivers
If you are forced to sign a lien waiver, for various circumstances, before you are paid or at a simultaneous exchange, you should only agree to sign a conditional lien waiver that will limit the power of the release to the time frame in which you should receive the payment. Conditional lien waivers are not easily accepted by banks, and it is in your best interest to try to avoid them.
Consult with a Real Estate Attorney in OKC
Lien waivers are common in the construction industry, but do not underestimate the importance of this legal document. A real estate attorney at Robert R. Robles in OKC can review the waiver prior to you signing it to protect your rights. Contact our firm today to ensure you won’t have a costly legal battle down the road.