A lien waiver is a document drafted by a potential lien claimant such as a contractor, subcontractor, materials provider, equipment lessor or other party to the construction project (the claimant) that states they have received payment and thereby waive any future lien rights to the owner's property. Simply put, waiving a lien means giving up the right to a future lien in exchange for the payment of the potential lien amount in full or part.
Lien waivers generally fall into two categories: conditional and unconditional. A conditional waiver is effective only upon the triggering of a specific event, such as the payment check clearing. An unconditional waiver is an absolute abandonment of the claimant's right to a future lien whether or not payment is ever made to the possible claimant. North Carolina does not provide for lien waivers by statute, although waivers are still permissible and will be recognized by a state court under the principles of contract law.
An unconditional waiver upon progress payment releases all claimant rights through a specific date unconditionally (meaning that the release of rights is not dependent upon the payment clearing the bank). Because this is an unconditional waiver, only use it after a progress payment has actually been made and received.
By filing the form, the lien claimant represents that he or she either has already paid or will use the money he or she receives from this progress payment in order to make prompt payment in full to all his or her laborers, subcontractors, materialmen and suppliers for all work, materials or equipment that are the subject of this waiver and release.
Getting a lien waiver also allows property owners to shield the title to their property from the general contractor, material suppliers and subcontractors involved with a project. With a partial lien release upon a progress payment, the property owner works toward regaining clear title and the ability to obtain financing or sell the property.
The property owner should require lien and labor waivers to be submitted with the contractor's invoices and should not authorize payment of any invoice without properly signed lien and labor waivers. Proper lien waivers can protect the property owner from liens filed by the contractor's subcontractors, suppliers and laborers who might record a lien if they are not paid by the contractor.
This article is provided for informational purposes only and should not be relied upon as a substitute for the advice of a legal professional. Please contact an attorney with questions about using lien waivers, or for any other issues related to liens in North Carolina.
Deeds.com North Carolina Unconditional Waiver on Progress Payment Forms Have Been Updated as Recently as Friday August 2, 2019
What others like you are saying:
David G. said: Thanks got what I needed
Reply from Staff: Thank you David, glad to hear that.
A. S. said: First, I am glad that you gave a blank copy, an example copy, and a 'guide'. It made it much easier to do. Overall I was very happy with your products and organization... however, things got pretty confusing and I have a pretty 'serious' law background in Real Estate and Civil law. With that said, I spent about 10+ hours getting my work done, using the Deed of Trust and Promissory note from you and there were a few problems: First, it would be FANTASTIC if you actually aligned your guide to actually match the Deed or Promissory Note. What I mean is that if the Deed says 'section (E)' then your guide shouldn't be 'randomly' numbered as 1,2,3, for advice/instructions, but should EXACTLY match 'section (E)'. Some places you have to 'hunt' for what you are looking for, and if you did it based on my suggestion, you wouldn't need to 'hunt' and it would avoid confusion. 2nd: This one really 'hurt'... you had something called the 'Deed of Trust Master Form' yet you had basically no information on what it was or how to use it. The only information you had was a small section at the top of the 'Short Form Deed of Trust Guide'. Holy Cow, was that 'section' super confusing. I still don't know if I did it correctly, but your guide says only put a return address on it and leave the rest of the 16 or so page Deed of Trust beneath it blank... and then include your 'Deed of Trust' (I had to assume the short form deed that I had just created) as part of it. I had to assume that I had to print off the entire 17 page or so title page and blank deed. I also had to assume that the promissory note was supposed to be EXHIBIT A or B on the Short Form Deed. It would be great if someone would take a serious look at that short section in your 'Short Form Deed of Trust Guide' and realize that those of us using your products are seriously turning this into a county clerk to file and that most of us, probably already have a property that has an existing Deed... or at least can find one in the county records if necessary... and make sure that you make a distinction between the Deed for the property that already exists, versus the Deed of Trust and Promissory note that we are trying to file. Thanks.
Reply from Staff: Thank you for your feedback. We'll have staff review the document for clarity. Have a great day!
Linda L. said: Excellent service. Very quick response.
Reply from Staff: Thank you Linda, we appreciate your feedback.
Jearsel W. said: I was surprised how helpful the completed example was. It was nice to see what the form should look like when it is filled out. Great job!
Reply from Staff: That's wonderful to hear Jearsel, thanks for your feedback. Have an awesome day.
Donna J. said: what do you do with it once filled out. doesn't tell you
Reply from Staff: Generally, once the documents are completed and executed they are recorded with the recorder where the property is located.
Gerlinde H. said: This was fantastic. I downloaded the document, filled it out, printed it, had it notarized and drove to the recorders office and had it recorded within less than 15 minutes. Instructions are precise and easy to understand. You saved me hundreds of dollars a lawyer would have charged for the same work.
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Select County where the property is located.