A lot of attention is paid to the requirements for filing a lien, including who can sign one. But little is written about the formalities of when and who can sign a lien release.
By way of background, understand that a lien release is not the same as a lien waiver. A lien waiver does what it says – it waives any right to file a construction lien. It is signed by a party otherwise entitled to secure any rights to money due through recording an interest in the property. And it is signed and conveyed after the project starts, before payments are issued, and before a construction lien is recorded. Some states, including Florida, have a specific statutory form of lien waiver to be used.
A lien release on the other hand is used to cancel an existing construction lien and remove it from the public records. The release must include:
- Property owner’s name;
- Property address;
- Recording information;
- Lien claimant’s name.
The lien release is filed in exchange for payment, recorded with the clerk where the original lien was filed, and copies sent to the property owner and the original lien claimant. It is to be signed by an authorized officer of the claimant entity and should be notarized.
Liens are an important tool in securing a contractor’s right to payment. Releasing them correctly and timely is equally important.