Lien Waiver Form & Lien Release Template
A lien waiver and release is a written contract between two or more parties. Lien waivers and releases are commonly used in a construction setting. The counterparty essentially waives their right to issue a lien on the payer’s property, or in some cases, the payer’s goods. An unconditional lien waiver (or “waiver of lien”) and release is beneficial because it can eliminate the filing of a mechanic’s lien.
What is in the Lien Waiver & Release Template?
- Comprehensive lien waiver and release template that is completely customizable to manage lien rights.
- Practical tips to consider while drafting a lien and waiver release.
- A condensed guide to construction lien waiver forms and what to look out for.
What is a Lien Waiver & Release?
A lien waiver is a critical document, especially in the construction industry. The agreement is supplied by a contractor, supplier, subcontractor, or another counterparty who holds what is known as a “mechanic’s lien.” A mechanic’s lien is a promise of payment to a contractor, builder, or other counterparties part of a construction project. A mechanic’s lien guarantees that they are first in line to be paid before any other party.
So what is a lien waiver and release? The waiver is signed by the contractor, supplier, subcontractor, or other counterparty expressing that they have been paid in full. The counterparty surrenders their right to file any future lien on the contested property or goods.
The 4 Types of Waivers
There are four types of lien waivers frequently utilized in practice.
- Conditional Lien Waiver and Release on Final Payment – Terminates any and all rights upon final payment contingent upon certain stipulations.
- Conditional Lien Waiver and Release upon Progress Payments – Waives any and all rights up to an agreed-upon date. This is also assuming the payments are up to date pursuant to the terms listed in the agreement.
- Unconditional Lien Waiver and Release on Final Payment – Terminates any and all rights upon final payment.
- Unconditional Lien Waiver and Release upon Progress Payments – Waives any and all rights up to an agreed-upon date.
State-Specific Conditions on Lien Waivers
It is important to note that several states only honor conditional lien waivers on what is referred to as “progress payments,” and unconditional lien waivers on the project’s final payment. Twelve states provide mandatory lien waiver and release forms. Mississippi, Texas, and Wyoming require lien waivers to be notarized. It is critical to consult with an attorney when discussing lien waivers and your state’s specific rules and regulations.
Essential Elements in a Lien Waiver
Again, it is important to remember that lien waivers and their requirements may depend on the state. Generally, a lien waiver contains the following:
- The Parties to the Contract
- Project Sum
- Property Locations(s) and Work Site(s)
- Dates and Signatures
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Lien Waiver & Release Template
Upon receipt of the sum of $___________, the sufficiency of which is hereby acknowledged, the undersigned does hereby waive, release and relinquish any and all rights, claims, demands, liens, claims for relief, causes of action and the like, whether arising at law, under a contract, in tort, in equity or otherwise, which the undersigned has now, may have had or may hereafter have pursuant to the Contract, Subcontract, Purchase/Service Agreement (“Contract”) with __________________(“Contractor”) in connection with the construction of improvements located at _________________________________________________________________ (“Project”) for ______________________________________ (“Owners”). The term “Contractor” shall be deemed to mean and refer to the Contractor and its agents, representatives, employees, directors, and all those acting on their behalf.
This Waiver and Release applies to all facts, acts, events, circumstances, changes, constructive or actual delays, accelerations, extra work, disruptions, interferences, and the like which have occurred or may be claimed to have occurred.
The undersigned expressly waives all claims and liens against the Contractor, any surety, the Owners, the property located at ________________________________________________________________ and the Project. The undersigned freely and voluntarily chooses to accept the terms and conditions of this Waiver and Release in return for the payment recited above and agrees that those funds shall be held for the benefit of all suppliers or subcontractors of the undersigned providing labor or material to the Project and shall be used first to pay all such suppliers or subcontractors, although those funds may be commingled with the undersigned’s own funds.
The undersigned further represents that all employees, laborers, materialmen, and subcontractors employed by the undersigned in connection with the Project and all bills currently due for labor, materials, supplies, and taxes furnished by others to the undersigned in connections with the construction of improvements upon the Project have been fully paid and that no obligations, legal, equitable or otherwise are owned by the undersigned in connection with its work on the Project.
With respect to this representation and warranty, the undersigned does hereby agree to indemnify and hold harmless the Owner, the Contractor from any and all claims, liens, damages, losses, expensed and the like incurred by reason of any claim that the undersigned has not fully paid for all labor, materials, and expenses incurred in connection with its work on the Project, including reasonable attorney’s fees.
The undersigned further agrees that making and receipt of payment and execution of this Waiver and Release shall in no way release the undersigned from its continuing obligations with respect to the completion of any work remaining undone, punch list work, warranty and guaranty work, and any other obligations of the undersigned to the Owner.
IN WITNESS WHEREOF, on behalf of the undersigned, with full authority, I have executed this Waiver and Release under seal effective the _____ day of __________, 20__.
Signature By: ______________________________
STATE OF ___________ )
__________ COUNTY )
Before me, the undersigned, a Notary Public in and for said county in said state, hereby certify that ________________________, whose name is signed to the foregoing instrument, and who is known to me, acknowledged before me on this day, that, being informed of the contents of the above and foregoing, he executed the same voluntarily on the day the same bears date.
Dated this the _____day of___________________, 20__.
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