Massachusetts Contractor Partial Waiver and Subordination of Lien

Massachusetts Contractors Partial Waiver and Subordination of Lien

The Contractor's Partial Waiver and Subordination of Lien form is useful for situations where a contractor seeks a partial payment to waive lien rights up to a specific date.

Lien waivers are used between contractors (also subcontractors and suppliers) and property owners as a quid-pro-quo arrangement between the contractor and owner. The purpose of a waiver is to influence payment from the owner in return for the contractor waiving future mechanic's lien rights.

In Massachusetts, any promise or agreement that bars the filing of a Notice of Contract is void and unenforceable, but that prohibition does not apply to full or partial lien waivers or dissolutions of liens. M.G.L. Ch. 254, 32. Therefore, the parties can use waivers to facilitate payment and ease concerns of hidden liens.

In general, Massachusetts recognizes four types of lien waivers: Partial Waiver by Contractor, Full Conditional Waiver by Contractor, Partial Waiver by Subcontractor, and Full Conditional Waiver by Subcontractor. Id. As their titles suggest, contractors should use a contractor's waiver and subcontractors should use a waiver designated for a subcontractor. Partial lien waivers should be provided upon a partial or progress payment and the waiver only applies to forfeit lien rights according to the terms stated within it.

Lawful waivers identify the parties to the contract, the claimant, the property, the nature of work, relevant dates, payment information, and anything else necessary for clarity or to meet local requirements. The claimant (or authorized representative) must sign the completed waiver in front of a notary, then submit the document to the recording office for the county where the property is located.

Using lien waivers properly can ensure smoother relations between the parties on a construction job and alleviate and feelings of mistrust or concern. This article is provided for informational purposes only and should not be relied upon as a substitute for advice from an attorney. Please speak with a Massachusetts attorney if you have any questions about lien waivers or for any other issues concerning mechanic's liens.