News: Brokerage

What are waiver's of mechanic's liens and why do you need them?

Recently, a new client called about a mechanic's lien filed by a contractor. I asked if he had obtained partial waivers of mechanic's liens with each payment he had made to contractor and he said he had no idea what I was talking about. Waivers of mechanic's liens are documents which ensure that the client and the contractor are "on the same page" as far as the financial aspects of the project. The client does not want to pay money and later hear the contractor say, "You gave me that check, but you still owed me more money." Since mechanic's liens are filed when a contractor claims he is owed money, when he waives his right to file a mechanic's lien, he is acknowledging that he has been paid to date. There are partial waivers of mechanic's liens which are filed for each payment along the way and a final one at the end. Obtaining these waivers is usually the job of the architect or the construction manager, but they do not just happen. This task must be made part of the scope of work in those contracts. I always advise people to seek legal counsel before signing any construction contracts, since these are the kinds of things I typically advise my clients about. C. Jaye Berger is the founder of Law Offices C. Jaye Berger, New York, N.Y.
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