What Are Lien Waivers and Why They Matter

Definition of lien waivers, why banks require them, and protection against double-payment.

What is a Lien Waiver?

A lien waiver is a legal document where a subcontractor or material supplier gives up their right to file a mechanic's lien against your property. In exchange, they acknowledge they've been paid for their work.

Why They Matter

Without lien waivers, a subcontractor could:
1. Get paid by you
2. Then file a lien against your property claiming non-payment
3. You'd potentially have to pay twice or face legal action

Why Banks Require Them

Your construction lender requires lien waivers with every draw request because:
- They protect the bank's collateral (your property)
- They verify funds are being used properly
- They create a documented payment trail

> WARNING: Never skip collecting lien waivers, even from subs you trust. A lien waiver is a legal protection — trust but verify.