You paid your GC. Your GC didn't pay his plumber. The plumber files a lien on your property. Now you can't sell until the lien is resolved. You already paid for the plumbing work. But you're paying again.
This happens. More than investors realize. And it's preventable with one document: the lien waiver.
What Is a Lien Waiver?
A lien waiver is a signed document from a contractor or subcontractor confirming they've been paid for their work and waiving their right to file a mechanics lien on your property for that payment.
In simple terms: "I got paid, so I won't put a lien on the property for this work."
Why You Need Them
In most states, subcontractors (plumbers, electricians, etc.) have the legal right to file a mechanics lien on your property if they aren't paid, even if you paid your GC and the GC failed to pay the sub.
Your $8,000 payment to the GC for plumbing work doesn't protect you if the GC pockets the money and doesn't pay the plumber. The plumber can lien your property for the full amount.
Types of Lien Waivers
Conditional waiver on progress payment: "I'll waive my lien right when this check clears." Used during the project for partial payments.
Unconditional waiver on progress payment: "My lien right is waived for this payment." Used after the check has cleared.
Conditional waiver on final payment: "I'll waive all remaining lien rights when the final check clears." Used at project completion.
Unconditional waiver on final payment: "All lien rights waived." Used after the final payment has cleared.
When to Collect Them
Every draw. Collect lien waivers from the GC and every sub with each payment. The weekly draw model makes this easy because the waiver cycle matches the payment cycle:
- Friday: GC submits draw request
- You release the draw
- GC provides conditional lien waiver from themselves and all active subs
- Next Friday: GC provides unconditional waiver (confirming last week's funds were distributed) alongside the new draw request
The Weekly Draw Advantage
Lien waivers and weekly draws work together naturally. Each weekly draw includes:
- The draw request (what work was done)
- Conditional waiver from GC (waiving rights upon receipt)
- Unconditional waiver from GC for last week's draw (confirming distribution)
- Sub waivers as applicable
At Seller's Little Helpers, lien waivers are part of every weekly draw package. You don't have to chase them. They're built into the process.
What Happens Without Lien Waivers
- Sub files a lien
- You can't sell the property (title isn't clear)
- You either pay the lien (paying twice for the same work) or fight it in court
- Legal fees: $2,000-$10,000+
- Timeline delay: months
- Stress level: extreme
All preventable with a piece of paper.
Book a $150 scope visit at sellerslittlehelpers.com - lien waivers included with every weekly draw, automatically. Call (708) 536-6700 or email info@sellerslittlehelpers.com.