What is a Lien Release?
A Lien Release is a form that removes a lien on a property once the property owner pays the lienor in full. The lienor is the person who placed the lien against the property.
A lien is a protective legal document that establishes the lienor’s claim to another party’s assets to satisfy a debt or outstanding payment. In regards to a Mechanic’s Lien, the lienor is usually a service provider or material supplier who places a lien against a property to ensure they get paid. If a property has an outstanding lien against it, the owner cannot sell the property until the lien is released.
A Lien Release is also known as a:
- Release of lien
- Mechanic’s lien release
- Lien cancellation
- Lien satisfaction letter
- Lien discharge
Who releases and files a lien?
The person who places a lien on a property is the lienor. For example, a contractor or supplier that puts a lien against a property owner’s home to ensure they are paid is a lienor. A lienor may also be referenced as the lienholder or lien claimant. In regards to a Mechanic’s Lien, a lienor may be a:
- General contractor
- Carpenter
- Drywall installer
- Framer
- Electrician
- Painter
- HVAC specialist
- Roofer
- Landscaper
- Plumber
Generally, the lienor who filed the initial lien against a property creates and files a lien release once they receive payment. However, if the lienor has created a Power of Attorney and appointed an agent, their agent may also file a lien release on their behalf.
How do I get a Lien Release?
You can create a Lien Release by using our simple document template. LawDepot’s Lien Release template is customized to your state’s laws and requirements, so you can be confident that your release form is legally enforceable and contains all the necessary information.
Once you’ve filed a Lien Release, you should receive a copy of the form labeled as “filed.” You must send a copy to the appropriate person, such as the property owner or contractor that paid you. Sending them a copy for their records is important and informs them that the lien is officially released.
What’s included in a Lien Release?
To create a Lien Release, provide the following information:
- Lienor information: Provide the lienor’s full name.
- Property owner information: Provide the property owner’s full name and specify whether there is a single owner or multiple owners.
- Hirer information: If you were in a direct contract with another hirer, such as a contractor, provide the name of the person who hired the lienor.
- Lien payment details: Specify the amount the property owner paid to satisfy the lien.
- Court details: Specify the date that the lienor filed the lien, the county and court where they filed it, and the book and page number of the claim.
- Property details: Provide the property’s legal description (e.g., street address, lot, block, subdivision name, plat number, survey number, etc.), county, and city/town.
- Signing details: Specify whether the lienor or an appointed agent will sign, and provide the signing date.
What’s the difference between a Lien Release and a lien waiver?
A lien waiver is a document that surrenders the signing party’s right to place a lien against a property. Property owners may ask contractors, subcontractors, or suppliers to sign lien waivers as a preemptive measure to prevent them from placing liens against properties.
In contrast, a Lien Release removes a lien on a property and is only required after the lienor files the lien and the property owner pays.
Where do I file a Lien Release?
File a Lien Release in the same court or office where you filed the initial lien, such as a Mechanic’s Lien. You may also have the option of sending in a Lien Release by registered mail. In this case, you may have to include money for release fees. To inquire about any possible fees or requirements that you should be aware of, contact your clerk recorder’s office.
When should I file a Lien Release?
As a general rule, you should file a Lien Release as soon as the property owner has paid the lien claim amount. In the United States, there are varying statutory limits for when you must file a Lien Release. For example, there are no statutory time limits for filing a lien release in California and Florida. In comparison, in Texas, a lienor must furnish a Lien Release no later than ten days after the date of receipt of a written request from the owner, original contractor, or other person making the payment.
Is there a penalty for not filing a release on time?
Once a property owner has paid the lien claim, it’s possible that the lienor can receive a penalty for not filing a Lien Release within their state’s statutory time limit. Penalties are dependent on a state’s statutes and some states do not outline a clear penalty. Check your state’s laws surrounding Lien Releases to ensure your compliance and prevent unnecessary penalties.
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