Lien waiver
A lien waiver is a signed document in which a contractor, subcontractor or supplier gives up the right to place a lien on a property for work or materials already paid for.
Also known as: Waiver of lien · Statutory declaration (Canada)
In the United States, lien waivers are routine paperwork on the way to getting paid. They come in four broad kinds, split along two axes: conditional or unconditional, and partial or final. Conditional takes effect only once payment clears; unconditional takes effect on signature, which makes signing one before the money lands a genuinely bad idea.
The reason owners and lenders ask for them is simple. A paid contractor whose subcontractor was not paid still leaves the owner exposed to that subcontractor's lien. Waivers collected down the chain close that exposure.
The failure mode is the unconditional waiver signed early, in a pile, because it was in the stack the office sent over. Read which of the four you are signing, and never sign an unconditional one against a payment you have not received.
In Canada vs the United States
Canadian practice generally differs. Most provinces' construction and builders' lien legislation does not use American-style lien waivers as the standard instrument; the common equivalent is a statutory declaration in which the contractor swears that subcontractors and suppliers have been paid, often alongside the statutory holdback. Some provincial legislation restricts or voids attempts to waive lien rights in advance. Treat a US lien waiver form as the wrong document for Canadian work, confirm what your province requires, and take this as a general description rather than legal advice.
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