About Lien Waivers
A lien waiver is a legal document signed in exchange for payment that waives the signer's right to file a lien for the amount specified in the waiver. A lien is a legal claim filed by a contractor or supplier against the property. The property is used as collateral to satisfy the debt(s) to the downstream collaborator(s). See What is a downstream collaborator?
In the simplest terms:
A lien protects a contractor or supplier from not getting paid.
A lien waiver protects the property owner from a lien.
ExampleAn Owner-Builder acting as their own General Contractor on a job or a General Contractor hires you, the specialty contractor, to perform work on a construction project. As the specialty contractor, you possess the right to file a lien against the owner's property until the Owner-Builder or General Contractor pays you for your work. Any subcontractors or suppliers that you hire to perform work or deliver materials on the job site also have the right to file a lien against the property, which serves as collateral for the work and/or materials they provide. A lien waiver signifies that a contractor (a general contractor, a specialty contractor, a subcontractor, and/or a supplier) has released their right to file a lien against the property.
An Owner-Builder acting as their own General Contractor on a job or a General Contractor hires you, the specialty contractor, to perform work on a construction project. As the specialty contractor, you possess the right to file a lien against the owner's property until the Owner-Builder or General Contractor pays you for your work. Any subcontractors or suppliers that you hire to perform work or deliver materials on the job site also have the right to file a lien against the property, which serves as collateral for the work and/or materials they provide. A lien waiver signifies that a contractor (a general contractor, a specialty contractor, a subcontractor, and/or a supplier) has released their right to file a lien against the property.