You know the situation—the lender or general contractor is waiving a check in front of you, but they won’t give it to you until you sign a waiver. Before you sign it, make sure you know exactly which rights you are waiving.
Nebraska statutes specially allow a contractor to waive lien rights. Section 52-144 allows a contractor to waive lien rights even before the work has been preformed or materials have been delivered to the job site. The statute further provides that unless the waiver is specifically limited to portion of the work or materials furnished, it will waive all liens rights. Finally, if the waiver is not clear, it will be construed against the contractor, not the party who drafted it.
Given the clear statutes that allow for a broad waiver, contractors need to be vigilant to avoid waiving more lien rights than intended. An example of a broad waiver may be:
Contractor waives and releases any and all lien or right of lien on the above described property on the account of labor, materials and equipment furnished or to be furnished.
The last phrase “to be furnished” is a killer and would likely be read to waive lien rights for future work.
A contractor would be well advised to revise the waiver language to something like:
Upon receipt of $____________, Contractor waives and releases any and all lien or right of lien on the above described property on the account of labor, materials and equipment furnished through [DATE]. This waiver does not apply to labor, materials and equipment provided after [DATE].
But, this language will only be effective if you are being paid for all work done up to the date in the waiver. If you are expecting to be paid more for work predating the waiver, the language will have to be changed.
Just like with construction contracts, contractors must carefully read lien waivers before signing them. If you need help, seek assistance from an experienced construction attorney.
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