From the course: Construction Loan-in-Process

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Understanding lien waivers in construction

Understanding lien waivers in construction

From the course: Construction Loan-in-Process

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Understanding lien waivers in construction

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- [Instructor] As we have just discussed, all parties that contribute materials, labor, or other services to a construction project have the ability to file a lien if they are not paid. But an owner and a lender would prefer to successfully complete a project without any liens filed. This is where lien waivers come in handy. Lien waivers can serve as payment proof. When a payment is made by the general contractor to a sub, for example, the sub will sign a lien waiver that acknowledges receipt of payment and also serves as an executed document that the subcontractor will not file a lien against the property in the same amount as the payment.

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