How can you safeguard yourself? These are the fundamentals of liens and how to get a lien discharge (lien waiver).
What you’ll discover:
A Lien is defined as
Safeguard Yourself With a Lien Release (Lien Waiver)
When Should a Lien Waiver Be Used?
What is the difference between a Lien Waiver and a Lien Release (also known as a Lien Cancellation)?
Payment for contractor services is often accompanied by a “mechanic’s lien.” Understanding liens, the distinctions between a mechanic’s lien waiver and a lien release, and when to utilize them can dramatically reduce your chances of being embroiled in a costly legal squabble. These are the fundamentals of liens and how to initiate a (Mechanic’s Lien Waiver).
Table of Contents
A Lien is defined as
When a tradesperson (for example, a carpenter or plumber) works on a house, they want to make sure they get compensated. They may not be working directly with the homeowner, but have been contracted by a general contractor to conduct the job. What remedy does this dedicated subcontractor have if they complete the job but are not paid by the contractor? They have the option of filing a “mechanic’s lien” on the property.
A lien offers the lien holder (the subcontractor) a certainty that they will be paid by granting them a claim on the real property. In other terms, a lien serves as security for the property. If the lien is officially registered with the county, as it should be, it might obfuscate the title.
The homeowner may be unaware that the tradesperson was not paid by the general contractor; yet, the property was enhanced as a result of this tradesperson’s work, therefore the claim is valid. The actual issue emerges when the tradesperson requests payment from the homeowner. If the homeowner cannot or will not pay, the subcontractor may move to court and request that the property be foreclosed in order to obtain the funds.
Safeguard Yourself With a Lien Release (Lien Waiver)
To protect oneself from this worrisome circumstance, the ideal approach is to employ Lien Waivers (also known as release of lien, mechanic’s lien release form, or Mechanic’s Lien Waiver) in advance, before the issue develops. How do you go about doing that?
We offer a Lien Waiver that you can instantly print and utilize. Thankfully, the procedure is straightforward. A Lien Waiver is analogous to a receipt. It simply indicates that you’ve paid the subcontractor what is required, they accept the payment in full, and they relinquish the right to establish a lien on your property. Just provide this paper to the subcontractor along with your payment and have them sign it. Make certain you get their signature!
When Should a Lien Waiver Be Used?
Whether you engage tradesmen directly or via a general contractor, require each worker to sign a Lien Waiver as soon as they are paid. If you are a contractor being paid for your services and wish to relinquish your right to a lien on such property, or if you are ready to pay a contracted mechanic and want to prevent having a lien issued against your property, we recommend using a Mechanic’s Lien Waiver. Normally, it is the general contractor’s responsibility to do this, but you must be vigilant to ensure that the general contractor collects Lien Waivers and sends them on to you each time you make a payment.
Liens may also be issued in other circumstances, such as a divorce, when the individual who has moved out still has a claim on the home’s equity. It’s also a possibility in child support situations, when the court or other spouse may file a lien against the individual who owes child support’s property.
Although a terrifying situation involving mechanic’s liens is feasible, there is also a simple solution. Obtaining and using our Lien Waiver may assist you in avoiding this situation.
What is the difference between a Lien Waiver and a Lien Release (also known as a Lien Cancellation)?
A lien waiver, as previously mentioned, is used to surrender lien rights. Before a lien is filed, the subcontractor would submit a lien waiver. By doing so, the subcontractor waives the right to a lien on the property. In contrast, a lien release (also known as a release of lien, cancellation of lien, or a lien cancellation) would take effect after a lien was filed. After receiving payment, the subcontractor would use a lien release, which would result in the cancellation of any lien claims.