A lien waiver protects you from contractors sending you the bill and placing a lien on your house, or a claim on your property, if a builder, developer or home contractor did not pay for work provided.
Why would someone place a lien on my home if I paid for the work?
Here is how this situation might unfold:
Why do I need to worry? It's the contractor who didn't pay.
Unfortunately, a lien could be placed on your house, preventing you from selling it or refinancing it, even if you are caught up on the bill. The homeowner is caught in the middle in this situation. It is not fair, but lien waivers help prevent that problem.
How can I avoid this problem?
Prevention is the best policy. First, find out from your contractor if he is using a subcontractor, and get the names of all the subcontractors involved. To obtain a lien waiver, discuss the matter with your contractor. Once these forms are signed, keep all the copies.
As the homeowner, you can ask the subcontractor to sign a lien waiver before anyone gets paid. Then, if the subcontractor has a dispute with the contractor, you have proof that you paid, and they cannot place a lien on your house.
Even after you have signed waivers, you will need to keep good records during the entire time of construction to make sure there is no dispute regarding what you owe and who paid whom.
 | A lien gives a creditor a stake in a debtor's property if the debtor cannot or will not pay. When the property is sold, then the lien holder will receive a share of the proceeds. |
 | A notice of intent to lien is an announcement that someone to whom you owe money is about to declare that they have a claim against your property. This is one document that you want to take seriously. |
 | Through tax lien certificates, you can invest in people who have not paid their property taxes. If the property owner pays the taxes, you will receive your investment, plus interest. |
Tax lien investing may sound lucrative, but it is risky and it is not for novices. You need to understand real estate auctions and the specific laws of your county before you dive in. |
Federal tax liens are often placed on homes if homeowners cannot pay Uncle Sam. If this describes your situation, you may be able to subordinate the lien so you can get a loan that will help you pay your bill. |
