Mechanic’s Lien Release or Final Waiver
There is some confusion with the use of the phrases “lien release” or “lien waiver”. Even worse, many state statutes and cases use the terms interchangeably. But they are definitely different. Each one has a different meaning and function.
A lien waiver, either partial or final, means that a mechanic’s lien claimant is waiving their rights in the future to file a mechanic’s lien. This usually is the result of a progress payment or final payment on the job. The owner or GC then furnishes a lien waiver which is signed by the contractor. When received, money is then dispersed. In exchange, the contractor agrees not to file a mechanic’s lien in the future for that amount.
For example, if you are receiving a $20,000 progress draw, signing a waiver means you will never bring an action or file a lien in the future for that amount. You can certainly file lien for other unpaid amounts, but not the designated sum in the waiver.
To the contrary, a lien release discharges an already filed mechanic’s lien. So in the same example, if you have recorded a $20,000 mechanic’s lien and are subsequently paid, you would be releasing that lien for that specific sum.
Making it even more difficult, sometimes the waivers and releases are combined with the phrase “Lien Waiver and Release”. But it is important to know the distinction from a legal standpoint.