DEFINITION of 'Lien Waiver'

A document from a contractor, subcontractor, supplier or other party holding a mechanic's lien stating that they have been paid in full and waiving future lien rights to the disputed property. Generally, there are four types of lien waivers:

  1. An "Unconditional Waiver and Release Upon Progress Payment" discharges all claimant rights through a specific date, with no stipulations;

  2. A "Conditional Waiver and Release Upon Progress Payment" discharges all claimant rights through a specific date, provided the payments have actually been received and processed.

  3. An "Unconditional Waiver and Release Upon Final Payment" extinguishes all claimant rights upon receipt of payment

  4. A "Conditional Waiver and Release Upon Final Payment" extinguishes all claimant rights upon receipt of payment, with certain provisions.


BREAKING DOWN 'Lien Waiver'

In the United States, many states typically only recognize conditional waivers on progress payments and unconditional waivers upon final payments. Just as a mechanic's lien can be a great aid to those seeking payment for services rendered, a lien waiver can be a lifesaver for owners that have made full or partial payments.

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