What Is a Conditional Waiver of Lien?

There are two types of conditional lien waivers: a conditional waiver and release upon progress payment and a conditional waiver and release upon final payment, explains Investopedia. The former prevents action on a mechanic’s lien provided payments are kept current; the latter prevents action after final payment with certain provisions.

A mechanic’s lien is a security interest that is held by a contractor against the property in which he is investing labor or materials to build or repair, explains the Cornell University Law School. For example, a mechanic’s lien allows an automobile repairman to keep possession of a car until the price of repairs is paid. Mechanic’s liens are not limited to automobile repairs and may also be applied to situations such as home repairs, construction and professional design. Mechanic’s liens may also be called by other names, such as a garageman’s lien or a supplier’s lien.

Lien waivers prevent the individuals who are doing work on a property from exercising their lien rights, explains Investopedia. Conditional and unconditional lien waivers can be applied to final payments or installments. In general, courts in the United States recognize conditional waivers only on installment or progress payments and unconditional waivers on final payments.