Definition
A lien waiver is a document in which a contractor, subcontractor, or supplier confirms they have been paid and gives up the right to file a lien on the property for that amount.
Lien Waiver, Explained
In Illinois, contractors, subcontractors, and suppliers who aren’t paid can file a mechanics lien against the property they worked on, even if the owner already paid the general contractor. A lien can block a sale or refinance until it’s resolved.
Lien waivers protect the owner. Each time a payment is made, the people who were paid sign a waiver for that amount. A partial waiver covers a progress payment; a final waiver covers the whole contract.
On commercial projects, landlords and lenders often require waivers from the general contractor and every major subcontractor before releasing TI allowance or loan money.
Why It Matters for Your Project
Collecting lien waivers with each payment makes sure the money you pay actually reaches the people doing the work, so no one can place a lien on your property later.
What to Watch For
- Ask for a waiver with every payment, not just at the end.
- Get waivers from major subcontractors and suppliers, not only the general contractor.
- Check that the amount and dates on the waiver match the payment.
- Collect a final waiver before making the last payment.