NYC Construction Lien Waivers Attorney

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In the complex New York City construction world, navigating lien waivers can be challenging. Whether you’re a contractor, subcontractor, material supplier, property owner, or developer, you will likely encounter the potential pitfalls that come with managing construction liens and the legal disputes that can impact project development.

Richman Law Firm PLLC can guide clients through the complexities of construction lien waivers and provide clear advice and representation to protect your interests. Contact us for a free consultation.

Understanding Different Types of Construction Liens in NYC

Liens are valuable tools in the construction industry. They ensure payment for services rendered or materials supplied. In New York City, parties involved in a construction project should be aware of several types of construction liens.

Mechanic’s Lien

A mechanic’s lien is a legal claim against a property that has been remodeled or improved. It serves as a security interest in the title to the property for those who have supplied labor or materials that enhance the property’s value.  Mechanic’s liens ensure contractors, subcontractors, and suppliers are compensated.

Materialmen’s Lien

Materialmen’s liens are similar to mechanic’s liens but are specifically for those supplying materials for a construction project. If a supplier provides materials for a project and is unpaid, they can file a materialmen’s lien against the property.

Contractor’s Lien

A contractor’s lien, also known as a construction lien, is filed by a New York contractor when the contractor has not been fully paid for their work on the project.

These are some critical areas where mechanics’ lien attorneys play a vital role, especially when lien claim disputes arise or when the lien process intersects with other areas of construction law.

How Lien Waivers Work

Lien waivers are legal documents that relinquish a party’s right to file a lien against a property. The construction industry often uses them to facilitate payment and mitigate risk. There are two primary types of lien waivers:

Unconditional Waivers

An unconditional waiver is the most comprehensive type of lien waiver. Once signed, it waives the signer’s right to place a lien on a property, regardless of whether they have received payment. This type of waiver is often used when payment has been confirmed, such as when a check has cleared.

Conditional Waivers

A conditional waiver is contingent upon the occurrence of a specific event, typically the receipt of payment. This means the waiver becomes effective only when the specified condition (usually payment) has been met. If the condition is not met, the party retains its right to file a lien.

It’s important to understand that lien waivers can carry significant legal implications. Therefore, it’s crucial to consult an experienced NYC construction attorney before signing or requesting a lien waiver.

The Difference Between Waivers and Lien Releases

While both lien waivers and lien releases are used in the construction industry to relinquish certain rights, they serve different purposes and are used in different contexts.

A lien waiver is a document signed by a contractor, subcontractor, or material supplier waiving their right to file a lien against the property.

On the other hand, a lien release is a document that removes a lien that has already been filed against a property. It states that the debt has been paid or otherwise settled, and title companies often require it before a property can be sold or refinanced.

When Mechanic Lien Waivers Might Be Used

Lien waivers assure property owners and other parties that they will not face liens filed by unpaid parties involved in the project. As such, they are typically required before payment is made. Specifically, lien waivers may be necessary in the following scenarios:

Before making a progress payment: Property owners often require conditional lien waivers from contractors, subcontractors, and suppliers before releasing progress payments. This helps protect against liens for work covered by that payment.

Before making a final payment: An unconditional lien waiver may be required before releasing the final payment on a project. This waives all rights to file liens for work done on the project up to that point.

When selling or refinancing property: Title companies often require lien waivers from all parties involved in any construction work before issuing title insurance.

Change Orders and Lien Waivers

Change orders represent any changes to the original contract that affect the scope of work, cost, or project timeline in construction projects. Change orders can complicate the process of lien waivers and potentially impact your lien rights.

When a change order is issued, it essentially modifies the original contract. If you have already signed a lien waiver based on the original contract, this could leave you unprotected from the additional work or materials covered by the change order.

Common Mistakes in Construction Lien Waivers

Despite their popularity in construction, lien waivers are often poorly handled. This can lead to costly mistakes, jeopardizing your legal rights and financial interests. Here are some common mistakes to avoid when dealing with construction lien waivers:

Signing without understanding: Lien waivers are legal documents with significant implications. Signing a waiver without fully understanding its terms can result in unintentionally relinquishing your rights to file a lien.

Using incorrect forms: An incorrect form for a lien waiver can render it invalid or ineffective. Make sure the form you use is appropriate for the type of waiver and the project stage.

Failing to track waivers: Failing to track lien waivers properly can lead to disputes down the line. Keep organized records of all lien waivers you sign or receive.

Waiving rights prematurely: In New York, it’s against public policy to waive your right to file a construction lien before you have been paid for your work or materials. Be wary of any contract that requires you to do so.

Not seeking legal advice: Construction law is complex, and mistakes can be costly. It’s always advisable to seek legal advice when dealing with construction liens.

Avoiding these common mistakes can help protect your rights and interests in a construction project. If you have any doubts or questions about lien waivers, consult a construction attorney.

Payment Disputes After Lien Waivers Have Been Signed

Even with lien waivers, payment disputes can still arise in construction projects from disagreements over the quality of work, delays in the project timeline, or divergences in the amount due.

When a lien waiver has been signed, it complicates the process of resolving payment disputes, as the party who signed the waiver has issued an acknowledgment receipt and given up their right to file a lien against the property to secure payment.

Nevertheless, should a disagreement arise post-waiver, other resolution methods, such as direct negotiation, mediation, or even litigation for breach of contract, may still be available.

Consult our construction attorneys as soon as possible. They can help you understand your options and guide you through resolving the dispute.

Contact Us for a Free Consultation

In New York City, contractors often seek a construction law firm that provides services tailored to their specific needs, such as handling mechanic’s lien claims and navigating the complexities of lien waivers.

Our NYC construction lien waiver attorneys play a critical role in the challenges of navigating construction laws in New York. Contact us for a free consultation.

Frequently Asked Questions

What is a mechanic’s lien waiver?

A mechanic’s lien waiver is a legal document that contractors or subcontractors sign to waive their right to file a lien after being paid for their work. It protects the property owner from potential future claims.

What are the types of mechanic’s lien waivers used in New York?

In New York, the construction industry primarily uses two types of mechanic’s lien waivers—conditional and unconditional. These waivers are vital in managing construction projects’ financial and legal implications.

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    SCOTT B. RICHMAN, ESQ.

    Mr. Richman is the Managing Member and Founder of Richman Law Firm PLLC. In his role as Managing Member, Mr. Richman oversees the day-to-day operations of the firm and handles the litigation of the most complex legal matters across a vast array of practice areas and disciplines. ​

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