When Lien Waivers are Illegal
Transcript Excerpt from the Kernan and Associates Radio Hour (fictional):
Attorney: Hello, caller, are you there?
Caller: Hi. I have a stupid question. Can I give-up my right to file a mechanic’s lien? I just signed a contract and there’s a section that says I hereby waive may right to file a mechanic’s lien. It says that under no circumstances shall I file a mechanic’s lien, no matter what, that I, and I quote: “forever waive, relinquish and concede the right to file a mechanic’s lien” Unquote. Can they put that in my agreement? I sign lien waivers all the time, but they usually only apply to work that I’ve performed and been paid for. They hand me a check for the labor and materials I furnished, and I hand them a lien waiver. Is that what this language is saying? Or is it saying something else, something broader, like, I can’t ever file a lien, never.”
Attorney: Not a stupid question. The provision you mention is void and unenforceable in most states.
Caller: what does that mean, “void and unenforceable.”
Attorney: It means they can’t make you agree not to file a mechanic’s lien. The right to file a mechanic’s lien is one you can’t contract-away, even if you wanted to. Like I said, most states have statutes, you know, laws that make such an agreement illegal. That doesn’t mean anyone is going to jail, it just means that if you did work you didn’t get paid for, you can file a mechanic’s lien to secure your right to payment, regardless of any contract language that says otherwise. Anyway, I’ll send you a link to the New York statute so you can see for your self. Thanks for calling.
See statute here:
New York Lien Law §34: Waiver of Lien
Notwithstanding the provisions of any other law, any contract, agreement or understanding whereby the right to file or enforce any lien created under article two is waived, shall be void as against public policy and wholly unenforceable. This section shall not preclude a requirement for a written waiver of the right to file a mechanic’s lien executed and delivered by a contractor, subcontractor, material supplier or laborer simultaneously with or after payment for the labor performed or the materials furnished has been made to such contractor, subcontractor, material man or laborer nor shall this section be applicable to a written agreement to subordinate, release or satisfy all or part of such a lien made after a notice of lien has been filed.