What is a lien waiver and when is it required for a draw?

The common types.

Waivers are usually described on two axes:

• Conditional or unconditional. A conditional waiver takes effect only when the stated payment clears. An unconditional waiver confirms the payment was already received.
• Progress or final. A progress (partial) waiver covers work through a date or a payment. A final waiver covers the whole job.

States differ on the details, and some prescribe the forms. Florida, for example, sets out a progress payment form and a final payment form in section 713.20 of the Florida Statutes, and a lien right there cannot be waived in advance of the work.

When lenders require them.

A common pattern: with each draw request, unconditional waivers for the payments made from the previous draw and conditional waivers for this one; with the final draw, final waivers from the general contractor and the major subcontractors and suppliers. The FDIC's construction and land development examination procedures ask whether lenders obtain lien waivers as work is completed and before funds are disbursed, and the OCC's Comptroller's Handbook lists lien searches before disbursement among effective construction controls.

Where the inspection fits.

The draw inspection and the lien waiver answer different questions. The inspection documents that the work is in place; the waiver documents that the people who did it were paid. A lender needs both: work in place but unpaid can still produce a lien, and paid work that is not in place is a draw ahead of progress.

Why it matters for lenders.

An unresolved mechanics' lien clouds title and can complicate the lender's position on the property. Collecting waivers on a fixed schedule, and matching them to the inspected work, keeps the file consistent from the first draw to the last. Lien law varies by state; this is general information, not legal advice.

How RAZE handles it.

RAZE documents the work side of each draw: percent complete by draw sheet line, photos with GPS coordinates and date and time stamps, and the status history of every inspection. Lien waivers stay in the lender's draw review or loan administration system, and RAZE integrates with existing construction loan administration workflows. See what a draw request includes.