(26) More properly, a release and waiver of lien
, as discussed below.
What value did the debtor, here a contractor, receive from the creditor's waiver of lien
rights in non-debtor property?
The very first piece of legislation made it illegal for any contract to contain a "waiver of lien
" on either public or private jobs.
Competition in the construction industry was and is so fierce that owners and contractors were often able to get these contracts signed with waiver of lien
rights when the contractors, subcontractors, and sub-subcontractors really did not wish to waive their lien rights, but felt compelled to do so in the competitive environment to get the work.
The great thing about any waiver of lien
rights is that it can't happen accidentally.
(30) See, e.g., Attorneys Title Insurance Fund, Inc., Subcontractor's Final Affidavit and Waiver of Lien
, Form 7-740 (rev.
So long as the Town's indemnification claim against Charwill was fully secured, (i.e., the Town owed Charwill more than the Town's exposure to Seacoast) by virtue of Seacoast's lien rights, Seacoast's waiver of lien
rights in exchange for the Payments was new value that benefited Charwill, and would be a full defense to the Trustee's preference claim.
So we became very diligent in making sure that we sent them a waiver of lien
for every single payment.
A "waiver of lien
to date" waives a party's right to lien for all amounts owed to that party under the contract, including all extras and change orders, as of the date stated in the lien waiver.
5) Furnishing a waiver of lien
in advance of payment could result in a forfeiture of a lien by a lien claimant who inadvertently gave a waiver before payment.
This general rule on waivers also applies to waiver of lien
rights in most states.