What is a waiver and release of lien or bond upon final payment form?


Quick Answer

A waiver and release of lien or bond upon final payment form protects consumers from liens placed on their property by contractors, according to the Better Business Bureau. Since lien rights apply to subcontractors, property owners are protected against liability for the actions of contractors when they use this form.

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Full Answer

Consumers should require construction contractors to sign a waiver and release to protect themselves, suggests the Better Business Bureau. If a contractor refuses to pay a subcontractor or violates an agreement with a supplier or employee, the property owner may be responsible. Waivers prevent property owners from being liable for contractors' actions. For the best legal protection, property owners should obtain waivers from each individual contractor, subcontractor, supplier and anyone else working on a construction or remodeling project for the owner. The waiver should cover the full cost of the work completed or products delivered as part of the project.

Without an appropriate waiver, courts may require the property owner to pay the lost wages and expenses incurred by a subcontractor and effectively repay the construction costs, explains the Better Business Bureau. Liens may result in property foreclosure to pay delinquent expenses. The property owner may be forced to sell the property or discontinue the project.

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