Financials & Cost

Lien Waiver

A signed document in which a contractor or supplier waives their right to file a mechanic's lien in exchange for payment.

A lien waiver is the document a subcontractor or supplier signs to relinquish their right to place a mechanic's lien on the property, in exchange for (or upon receipt of) payment. Waivers come in conditional and unconditional forms, for progress and final payments.

Collecting lien waivers is a payment gatekeeping step: owners and lenders won't release funds without them, and a GC won't pay a sub's next draw until the prior waiver is in hand. A missing lien waiver is one of the most common reasons a payment gets held — which is why chasing them is a routine part of the job.

Related terms

Pay Application

A periodic invoice billing for the work completed to date, submitted against the Schedule of Values.

Retainage

A percentage of each payment withheld until the work is substantially or fully complete, as security for performance.

Commitment

A subcontract or purchase order — a signed agreement committing money to a subcontractor or supplier for a defined scope.

Closeout

The final phase of a project: finishing punch work and assembling the documents and approvals that hand the building over.

From term to skill

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