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Releasing a Lien Conditionally?

We received an offer to have the mechanical lien be paid in full and would like to release the lien. Is there a way to do this conditionally so that we can show intent but wait until payment is received, or do we just have to release the lien and hope that the company that owes us the money will pay in full? We want to know our options before we move forward. Thank you!

1 reply

Sep 8, 2017

While lien waivers can be conditional or unconditional, lien releases/cancellations do not function the same way. A lien release/cancellation is a filed document, that is filed in the same property records as the mechanics lien itself, so that the public has notice that the property is no longer encumbered by a mechanics lien. Because of this, the release is either filed (and effective) or un-filed (and not yet effective).<br
However, in your situation there may be a work around. You can prepare a release of the lien at issue and provide a copy to the property owner with the promise to sign it and have it filed immediately upon payment. They will know that you have created the release document and are ready to get it filed so the lien is released when you get the payment. Additionally, if that is insufficient, I suppose you could employ some escrow service to receive both the completed release for filing and the payment.

It is not generally a best practice to release the lien on merely a promise of payment. If you release the lien you lose the protection that it afforded you, and there can still be hiccups with payment even if the property owner has promised that you will get paid.

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