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Home Improvement Financing - Lien Wavers Overview and Facts

Oct 18, 2007
Whenever you hire a general contractor who will be using subcontractors to complete individual aspects of a remodeling project, it's important to protect yourself from future inability by insisting that everyone sign a lien waver before any payments are made.

Avoid serious legal trouble following a major home renovation by making sure you have a lien waver signed by each and every sub-contractor hired to work on your home before the final payment is made. Even contractors who work for just a few hours need to sign a waver.

Few homeowners understand that even if the general contractor has been paid in full for all services (and a receipt signed), subcontractors can still place a lien on their property if they don't receive payment from the general contractor who ultimately chose and hired them. Lien wavers take payment responsibility from the homeowner and put it back on the general contractor.

It's considered normal practice for the main contractor to assume responsibility for hiring all subcontractors, and paying them from the fee the charges the homeowner. That's why homeowners hire general contractors in the first place. Problems arise, however, if the general contractor fails to pay his subcontractors. Which, by the way, happens all of the time. Without a signed lien waver from each worker, the homeowner remains responsible for those payments, even if they'd already paid the general contractor for the services.

Lien wavers protect homeowners from double paying on a specific job by ensuring that all parties understand that the general contractor will be handling all subcontracting payments.

What is important for a lien waver to include?

-The homeowner's name.
-The contractor's full name, address and telephone number.
-A detailed description of the work including the final state of the house at the completion of the job, as well as a listing of what materials should be removed from the premises.
-The status of the work.
-Signed and dated. Be sure to have the contractor print and sign his name on two copies (one for him and one for you). Date every one!
-A witness signature (optional, but encouraged).

It may seem like a bit of a hassle to make sure lien wavers are signed by every single subcontractor who steps into your house during a large-scale project. But, not making sure that everyone releases you from further payment once the job is completed, is an easy way to safeguard you from further financial responsibility.
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