Guide
Lien waivers explained for subcontractors
Every pay application seems to need one. Here's what each type of lien waiver does, which one to send when, and how to avoid signing away money you haven't received.
No credit card required. Then $25 per user per month (2-user minimum).
What a lien waiver does
A lien waiver (or lien release) is a document in which you give up some or all of your right to file a mechanic's lien, or a payment bond claim on bonded work, in exchange for payment. Owners and GCs collect them so they know the people who worked on the project have been paid.
Waivers vary along two choices, which gives four common types:
| Type | Covers | Takes effect | When to send it |
|---|---|---|---|
| Conditional progress | A progress payment, through a date | When the payment clears | With the pay app you are submitting now |
| Unconditional progress | A progress payment, through a date | As soon as you sign | After last period's payment has cleared |
| Conditional final | Everything on the job | When final payment clears | With your final or retainage pay app |
| Unconditional final | Everything on the job | As soon as you sign | Only after you have been paid in full |
The usual monthly pattern
- 1Month 1: submit your pay application with a conditional progress waiver for the amount requested.
- 2Month 2: once month 1's payment has cleared, send an unconditional progress waiver for it, plus a conditional waiver for the new pay app.
- 3Closeout: submit the final or retainage pay app with a conditional final waiver. Sign the unconditional final waiver only after the final payment clears.
Mistakes that cost subcontractors money
- Signing an unconditional waiver before the check clears. If the payment never comes, you may have waived your rights anyway.
- Signing a waiver that covers more than the payment, such as "all work to date" when retainage or change orders are still unpaid.
- Using a non-statutory form in a state that requires a statutory one.
- Leaving the exceptions blank when you have disputed amounts or pending change orders.
- Losing track of lien deadlines. Waivers and lien rights are separate: your deadline to file a lien keeps running.
Need a waiver now? Use the free lien waiver template.
This guide is general information, not legal advice. Lien and waiver laws vary by state; talk to a construction attorney about your specific situation.
Frequently asked questions
Do I have to sign a lien waiver to get paid?
Most subcontracts require lien waivers with each pay application, and GCs and owners usually will not release payment without them. The key is to sign the right type: conditional before you are paid, unconditional only after the money has cleared.
Are lien waivers the same in every state?
No. Several states, including California, Texas, Arizona, Georgia and Michigan, require specific statutory forms. Other states allow any reasonable form. Check the rules for the state where the project is located.
Does a progress lien waiver cover retainage?
A well-written progress waiver covers payments through a specific date and excludes retainage, which is still owed. Read every waiver you are asked to sign to make sure it does not waive retainage or unpaid change orders.
What if the GC sends me their own waiver form?
Read it carefully. Some GC forms are unconditional, waive more than the payment received, or add release language for claims and change orders. Ask to change the form, or list the items you are not waiving as exceptions.
Spend less time on paperwork and more time building.
Try Sub-Office free for 30 days. No credit card required, cancel anytime. Then $25 per user per month.