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Should contractors sign mechanic’s lien waivers?

On Behalf of | 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When this protection is voluntarily withdrawn by signing a waiver, this places the contractor is a precarious position should the project head south in a hurry.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 attorneys. Without offending your client, simply say that you’ll have your attorneys review the waiver and offer a legal opinion on whether to sign it. This way the onus is on the attorneys 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.