In one sentence
A signed release from a contractor, subcontractor, or supplier giving up lien rights for work covered by a payment, either conditionally or unconditionally.
The longer version
Mechanics liens can take priority from the date work commenced rather than the date of filing, which in some states means they can prime a mortgage recorded later. Waivers collected at each draw are how a construction lender manages that exposure.
The conditional and unconditional distinction is the one that gets mishandled. A conditional waiver takes effect only when the payment clears; an unconditional one takes effect immediately. Collecting an unconditional waiver before funds have cleared leaves the payer exposed, and collecting only conditional waivers leaves the lien risk open.
Common questions
- What is the difference between a conditional and an unconditional waiver?
- A conditional waiver becomes effective only when the associated payment actually clears. An unconditional waiver is effective on signing regardless of whether payment cleared.
- Who has to sign waivers?
- The general contractor and, depending on the loan documents and state law, subcontractors and material suppliers above a stated contract value.
- Can a mechanics lien beat a recorded mortgage?
- In some states yes. Lien priority can relate back to when work first commenced, which is why lenders order a pre-construction title inspection and collect waivers at every draw.
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