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News Details (Posted: December 15, 2008):
Before you pay a contractor, obtain a lien waiver
Before you hire - or even make a payment to - a contractor working on your home on jobs $25.00 or more, be sure to get a waiver of lien.
That warning comes today from the Florida Department of Business and Professional Regulation and the Florida Association of Counties, which are working together to educate consumers about how to better protect themselves from bad contract deals.
The waiver or release of lien is a written statement that protects homeowners by removing the property from the threat of a lien. Before making any payments, make sure you have in hand such a release covering the materials used and work performed on the property.
Check with your local building office for a copy of an an educational brochure about Florida's lien law. It's supposed to be handed out to anyone applying for a building permit.
In the mechanics lien process, a lien waiver is a document from a contractor, subcontractor, materialmen, equipment lessor or other party to the construction project stating they have received payment and waive any future lien rights to the property. There are typically four types of lien waivers:
Conditional waiver on progress payment - The safest waiver for claimants, this waiver generally specifies that if they have indeed been paid to date (and that includes no return or stopped payment checks) the waiver is an effective proof against any lien claim on the property.
Unconditional waiver on progress payment - This waiver releases all claimant rights through a specific date unconditionally (and that includes no return or stopped payment checks).
Conditional waiver on final payment - This waiver releases all claimant rights to file a mechanics lien if they have indeed been paid to date (and that includes no return or stopped payment checks).
Unconditional final waiver final payment - The safest waiver for owners, this waiver generally releases all rights of the claimant to place a mechanics lien on the owners property unconditionally. It is immaterial if the payment check has been returned or stopped payment. Claimants should issue this type of release only when they are positive their work is done and the payment has clear their bank. Owners should demand this release when they are paid in full.
In the United States some states only use a conditional waiver on progress payment and an unconditional waiver on final payment.
The mechanics lien process can be of great value to contractors, subcontractors, materialmen and other related parties to a construction work in enforcing their claims, if done according to the laws of the various states, or the federal government. These parties are entitled to be paid for their material or labor contributions to the improve of real property. Most forms for the process can be obtained from local office supply stores, and a few computer programs exist to handle the process on a nationwide basis.
Retrieved from "http://en.wikipedia.org/wiki/Lien_waiver"