Mechanics’ lien waivers are designed to preclude lien claimants from filing liens with respect to work for which payment is due and has been made. The goal of the payer—whether it is an owner or general contractor—should be to confirm not only that monies due have been paid but that the payee has no other unasserted claims unless, in the case of a progress waiver given during the course of the project, claims are specifically identified on the lien waiver. Far too often, however, progress lien waivers have been considered mere receipts for monies due and not as a waiver of unasserted claims. This article will offer drafting suggestions to prevent a progress lien waiver from being considered merely a receipt for payment.

Lien Waivers in General

Section 34 of New York’s Lien Law voids any contract that purports to waive a potential lienor’s right to file a mechanic’s lien. Under a specific carve out in Section 34, however, lien waivers for payments received at or after the potential lienor received payment are enforceable. Lien waivers that are given after payment is received and which generally cover payments received in a prior pay period are considered “trailing” lien waivers. Lien waivers that are given contemporaneously with payment for the current period are considered “conditional” lien waivers, i.e., conditioned on the actual receipt and clearance of funds. The principles discussed below apply with equal force to both types of waivers, although we believe a conditional lien waiver gives the payer the most complete protection.

Lien Waivers as Receipts

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