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Should contractors sign mechanic’s lien waivers?

| Oct 25, 2018 | Construction Law |

Mechanic’s lien waivers can be controversial when negotiating contracts with clients. Often, the attorneys for the clients (or the clients themselves) will request that the contractors sign mechanic’s lien waivers. But is that wise for a contractor to do?

In most cases, it’s not. Mechanic’s liens (or materialman’s supplier’s or construction liens, as they are alternatively known) protect contractors and subcontractors when clients skip out on paying their bills.

When this protection is voluntarily withdrawn by signing a waiver, this places the contractor is a precarious position should the project head south in a hurry. But because contractors try to please their clients, they may feel pressured into signing away their rights on a mechanic’s lien waiver.

This is a good point to defer to your Broward County construction law attorney. Without offending your client, simply say that you’ll have your attorney review the waiver and offer a legal opinion on whether to sign it. This way the onus is on the attorney to deny the viability of signing a waiver.

How releases differ from waivers

On the other hand, being asked to sign a mechanic’s lien release is standard operating procedure after payment has been rendered in full. The two documents are frequently confused but offer different protections to both clients and contractors. A release simply means that the client is now free to sell their property unencumbered by liens from the suppliers and contractors.

Of course, when you are asked to sign the mechanic’s lien release, you should verify that not only has payment been made, but the check has cleared the bank.

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super-lawyers
Distinguished AV LexisNexis Martindale-Hubbell Peer Review Rated for Ethical Standards and Legal Ability
Listed In Best Lawyers The World's Premier Guide
South Florida's Top Rated Lawyers
Certified The Florida Bar Construction Law
The Best Lawyers in America
The Associated General Contractors Of America
ABC Associated Builders and Contractors Inc Member