Release a lien or claim against property: Mechanic's Lien Waiver
What we’ll cover
What is a Mechanic's Lien Waiver?
If you've paid, or are just about to pay, a mechanic for work they have completed, you can get them to sign a Mechanic's Lien Waiver to help protect yourself from future claims for payment. Mechanic’s Lien Waivers will ensure the contractor will agree to release any lien, or other claim, that they may have against the property they've worked on.
When you hire a contractor, subcontractor, or supplier, they have a right to put a lien on your property if you don't pay. A Lien Waiver is an efficient way to help protect yourself financially when you have paid (or are about to) for the services – however, it should not be used if the contractor has already tried to enforce a lien or claim, so it is best used preemptively once the work has been completed and you have made payment.
Overall, a Mechanic's Lien Waiver is a fair way to help establish that you have fully paid up for a mechanic's services on your property. Get started on yours with Rocket Lawyer now!
When to use a Mechanic's Lien Waiver:
- You've contracted a mechanic and are ready to pay them, and want to avoid having a lien taken out against your property.
- You're a contractor and are getting paid for your work, and want to release your right to a lien on their property.
Sample Mechanic's Lien Waiver
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MECHANIC'S LIEN WAIVER
("Lienholder")
has performed services for and/or provided materials to , , , under an agreement dated for the on property located at , , as (the "Property"). in the attached Exhibit A (the "Property").
, but only for such labor and/or materials furnished on or before . . The undersigned has not been paid the sum of for work performed and/or materials provided under contract on this project and retains the right to file a lien against the property and pursue any and all actions to recover the full amount due, including any and all equitable claims.
The Lienholder acknowledges that this Waiver releases the Lienholder's rights under the laws of the State of , and further acknowledges that the execution of the Waiver is the Lienholder's voluntary act and deed.
| By: | Date: |
, COUNTY OF PARISH OF
On this _____ day of ____________________, _____, before me, ______________________________, the undersigned officer, personally appeared the above named , known to me (or proved to me on the oath of ______________________________) to be the persons who are described in and who executed the within and foregoing instrument, and acknowledged to me that they executed the same.
Before me, a Notary Public (or justice of the peace) in and for said county, personally appeared the above named , who acknowledged that they did sign the foregoing instrument, and that the same is their free act and deed. In testimony whereof, I have hereunto subscribed my name at ________________________________, this _____ day of ____________________, ______.
The foregoing Mechanic's Lien Waiver was acknowledged before me this _____ day of ____________________, _____, by .
The foregoing Mechanic's Lien Waiver was acknowledged before me, by means of ☐ physical presence or ☐ online notarization, this _____ day of ____________________, _____ by , who is personally known to me or who has produced ________________________________ as identification.
This Mechanic's Lien Waiver was acknowledged before me on this _____ day of ____________________, _____ by .
On this _____ day of ____________________, _____, before me personally appeared , to me known to be the person described in and who executed the foregoing instrument, and acknowledged that he/she executed same as his/her free act and deed.
On this _____ day of ____________________, _____, before me, ________________________________, personally appeared , known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument and acknowledged that he/she executed the same as for the purposes therein contained.
On this _____ day of ____________________, _____, before me, the undersigned, Notary Public for the State of Vermont, personally appeared , to me known (or to me proved) to be the identical person named in and who executed the above Mechanic's Lien Waiver, and acknowledged that such person executed it as such person's voluntary act and deed.
The foregoing instrument was acknowledged before me this _____ day of ____________________, _____, by .
In witness whereof I hereunto set my hand and official seal.
_________________________________
Notary Public
Signature of person taking acknowledgment
_________________________________
Name typed, printed, or stamped
Title (and Rank)
_________________________________
Title or rank
My commission expires _______________
_________________________________
Serial number (if applicable)
Serial number, if any
Notary Address:
_________________________________
_________________________________
_________________________________
| _________________________________ |
A notary public or other officer completing this certificate verifies only the identity of the individual(s) who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
On ____________________ before me, ________________________________, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
________________________________________ (Notary Seal)
Signature of Notary Public
The Waiver can be signed online. It becomes effective as of the date specified in the Waiver.
You may choose to sign your Waiver in front of a notary public. It becomes effective as of the date signed.
If you sign this agreement online a copy will be securely stored in your account. You can share your document from your account.About Mechanic's Lien Waivers
Learn about how to release a lien or claim against property
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Common terms in a Mechanic’s Lien Waiver
A Mechanic’s Lien Waiver is a legal document used to relinquish or waive a party's right to place a lien on a property. To do so, it can cover a variety of terms and sections you might not be all too familiar with, such as:
Description of contract and services
Because the lienholder is giving up a valuable legal right by signing the Mechanic’s Lien Waiver, it is important that it clearly identifies what property the lienholder intends to release from the lien. This will avoid unnecessary confusion if there is a future dispute about work or materials provided under a different contract or at a different job site.
To exactly identify real estate that will be released by the Waiver, you may wish to include a legal description of the property. The legal description can be found in documents under which the property was purchased (perhaps a deed or mortgage). It may also be available from the local taxing authority responsible for real estate tax assessment and collection.
Governing laws
Because a Mechanic's Lien is frequently created by state law, it is important to specify in a waiver that the lienholder is giving up rights granted by the state where the property is located.
Lienholder
Individual state laws typically provide that a provider of labor or materials has an automatic lien on the improved property. This provider is referred to in this document as the lienholder. The lienholder may be providing services to one of two entities.
In some cases, the owner of the property will directly contract with the provider for the services or materials. For example, the owner of a house may contract with a local lumberyard to have materials delivered so that the owner can construct a garage adjacent to the house. In other cases, there may be an intermediary party involved, such as a general contractor, who buys in his own name from the lumberyard, supplies labor for the project, then bills the owner for the total cost of both labor and materials. In this situation, the lumberyard generally still has a lien on the improved property, even though the owner has not contracted directly with the lumberyard.
Scope of Waiver
If all labor and materials required of the lienholder have been supplied, and if the lienholder has received or will be receiving final payment for the full amount due, the Mechanic’s Lien Waiver should be for all claims and liens. However, if the lienholder is receiving merely a progress payment, a Mechanic’s Lien Waiver only through a certain date is more appropriate. When the lienholder finishes the remaining work and the final payment is made, an additional waiver should be given which completely releases the property from the lien.
Notarization
If you live in a state or county where a Mechanic's Lien Waiver needs to be notarized to be effective, you should not sign the document until you are in the presence of the notary public. You will be required to give an oath, under penalty of perjury, to the notary that the information in the Mechanic's Lien Waiver is true and accurate.
Still have more questions? Do not hesitate to ask a lawyer.
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What might happen if I don’t use a Mechanic’s Lien Waiver?
When a tradesperson (carpenter or plumber, for example) does work on a home, they want to be sure they will get paid. They may not be working directly with the homeowner, but have been hired by a general contractor to do the work. What recourse does this hardworking subcontractor have if they do the work but the contractor doesn't pay them? They can file what's known as a "Mechanic's Lien" against the property.
A lien gives the lienholder (the subcontractor in this example) an assurance that they will get paid by giving them a claim against the home or property. In other words, a lien uses the property as security. If the lien is recorded with the county, as it should be in order to make it official, it can cloud the title.
A homeowner may not even know that a tradesperson did not get paid by the general contractor. When a property is improved by the efforts of a tradesperson, they have a right to be paid. The real problem arises when the tradesperson asks the homeowner to pay the debt that the general contractor owes. If the homeowner cannot, or will not, the subcontractor can go to court to enforce the lien. If the homeowner cannot pay the amount owed, a court can foreclose on the property in order to raise the money.
In order to protect yourself against this troubling scenario, the best practice is to adopt the use of Mechanic’s Lien Waivers (also known as Release of Lien or Mechanic's Lien Release Form) and use them preemptively, before the problem arises.
Rocket Lawyer provides a Mechanic’s Lien Waiver that you can print and use immediately. It's a simple process. A Mechanic’s Lien Waiver is similar to a receipt. It basically states that you've paid the subcontractor what is owed, they accept the payment in full, and they waive the right to put a lien on your property. Simply present this form to the subcontractor with your payment and require them to sign it to receive their payment. Make sure you get their signature!
Mechanic's Lien Waiver FAQs
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What is a lien?
A party who performs certain types of services or who furnishes materials to another is often provided with specific rights under state law which help ensure that the provider will be paid for the improvements. A lien is created automatically in most states by state law, giving the provider a legal claim on the improved property until the provider is paid or voluntarily releases the lien.
Generally, the provider must take extra steps to "perfect" (complete) the lien. However, it is standard practice to have a supplier release its right to the lien when the owner has made, or is prepared to make, full payment. This will ensure that the supplier will not attempt to wrongfully perfect or enforce the Mechanic's Lien after already receiving complete payment.
The Mechanic’s Lien Waiver, however, is a document that states the contractor has given up their right to said lien – usually because they have received payment.
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Is a Mechanic's Lien Waiver for me?
Whether you hire tradespeople directly, or work through a general contractor, insist that every worker sign a Lien Waiver as they are paid. We suggest you use a Mechanic's Lien Waiver if you are a contractor getting paid for your services, and want to waive your right to a lien on said property, or if you are ready to pay a contracted mechanic, and want to avoid having a lien placed against your property.
Conventionally, it's the general contractor's job to do this, but you need to be watchful to make sure that the general contractor collects Lien Waivers and passes them on to you every time you make a payment.
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How can I write my own Mechanic’s Lien Waiver?
With Rocket Lawyer, it’s a fairly simple process: just answer a few questions and we will build the document for you taking into consideration the information you’ve provided and specifics pertaining to your state.
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What is the difference between a Lien Waiver and Lien Release (aka Lien Cancellation)?
A Lien Waiver is used to renounce lien rights. The subcontractor would file a Mechanic’s Lien Waiver before a lien is filed. By doing so, the subcontractor is giving up his or her right to a lien against the property.
In comparison, a Lien Release (also known as Release of Lien, Cancellation of Lien, or a Lien Cancellation) would come into play after the filing of a lien. The subcontractor would utilize a Lien Release, resulting in the cancellation of any lien claims, after they receive payment.
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Can a Mechanic’s Lien Waiver be a verbal agreement?
Most states require that a release of a statutory lien must be done in writing to be effective. Therefore, the use of this document serves as tangible evidence that the Lienholder waived/released its right to a lien.
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