Releasing Your Mechanics' Lien Rights

When you have been paid for your goods or services, the owner has met their obligation to you, and you no longer have any lien rights.

Not everybody in the construction process is entitled to mechanics' lien rights, most notably; a supplier to a supplier, and providers of goods and services that do not improve the property. Material suppliers and workers for wages are entitled to mechanics' lien rights. Everyone except workers for wages and contractors with a direct contract with the property owner (prime contract) are required to provide a 20-day preliminary notice to the owner, the general contractor and the lender prior to performing work or delivering materials to the jobsite.

As an owner, you need to be careful that you obtain releases from everybody involved. Just paying the general contractor (and/or getting a release from the general contractor only) does not guarantee that other claimants, like subcontractors and suppliers, have been paid. A claimant is a person who, if not paid, can file a lien on your property.

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