The Lien & Credit Journal had an interesting article the other day discussing which states’ laws allow you to waive lien rights. The blog, entitled Who Lets You Waive Your Lien Rights Before Payment? identified four types of state laws. Those states that prohibit waiver, those that allow waiver, those that appear to have conflicting laws, and those that have no law.
It was interesting to see that Nebraska is one of only three states that allows a contractor to waive lien rights before being paid. This certainly appears contrary to the majority of other states that are silent on the issue or prohibit upstream contractors from forcing contractors to waive lien rights before being paid. Nebraska statutes specifically allow contractors to waive their lien rights. Nebraska statute section 52-144 provides that a contractor may waive its construction lien rights both before and after materials or services are furnished. And, no consideration is required in order for the waiver to be valid. This means that a contractor may waive its lien rights without being paid.
Of course, simply because a contractor may waive its lien rights before being paid is allowed, it’s not always a good idea. While there may be some business reasons to waive your lien rights before you are paid, the lien provides you with one of your best opportunities to be paid.
Before you waive your lien rights on a project, make sure you know how and when you will be paid. Otherwise, you might be waiving your best opportunity to get paid good bye.