Last updated December 8, 2022
What is a Lien Release?
A Lien Release is a form that removes a lien on a property after a claimant has been fully paid. A lien is a legal claim held against a piece of property to guarantee payment.
The claimant is the person who placed the lien on the property. They’re also known as the lienor, lienholder, or lien claimant.
A Lien Release is also known as a:
- Release of lien
- Mechanic’s lien release
- Contractor lien release
- Lien cancellation letter
- Satisfaction of lien
- Lien discharge
Our Lien Release template is only suitable for removing a Mechanic’s Lien. In regards to a Mechanic’s Lien, the claimant is a contractor, service provider, or supplier who places a lien against real property, such as land or buildings, to ensure they get paid.
Why is using a Lien Release necessary?
If you’re a contractor, service provider, or supplier who has filed a lien, it’s important to create and file a Lien Release once you’ve been paid.
Some states have lien release laws requiring you to release a lien once the claim has been satisfied. In these states, failing to release a lien by a certain deadline can result in financial penalties.
The deadlines and penalties regarding Lien Releases vary depending on the state.
Besides fulfilling legal obligations and avoiding penalties, filing a lien release after payment is the right thing to do. Failing to release the lien is unfair to the property owner.
A lien is an encumbrance on a property title. So, if the property owner wants to sell or refinance their property, they will encounter issues if the settled lien hasn’t been properly lifted with a Lien Release. The owner may even be unable to sell the property until the lien is released.
Doing so promptly shows you respect and value the property owner’s interests.
Who uses a lien?
The lienor, also known as the claimant or lienholder, is the party who creates and files a Lien Release. The lienor files a lien against a property to ensure they get paid for their work.
If the claimant has created a Power of Attorney and appointed an agent, the agent may create and file a Lien Release on their behalf.
In regards to releasing a Mechanic’s Lien, the claimant is usually an independent contractor. For example, the claimant may be a:
- General contractor
- Electrician
- Plumber
- Framer
- Insulation contractor
- Concrete finisher
- Window and door installers
- HVAC technician
- Roofer
- Drywaller
- Drywall finisher
- Plasterer
- Floor layer
- Finish carpenter
- Painter
- Mason
- Excavator
- Landscaper
How do I get a Lien Release?
To create a Lien Release, use our simple document template. It 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.
After you've completed your Lien Release, you should send one copy to the appropriate party, such as the property owner or general contractor that paid and settled the claim. The original copy will be filed or recorded with the court or office where the lien was filed.
What’s included in a Lien Release?
To create a Lien Release, provide the following information:
- Lienor information: Provide the full name of the lienor. This is the person who is placing the lien on the property.
- Property owner information: Provide the property owner’s full name and specify whether there is a single owner or multiple owners.
- Hirer information: Specify if the lienor was hired directly by the property owner or contracted by a different hirer. If they were contracted by someone else, provide the name of the hirer.
- 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. If applicable, specify the 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 or 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 prevents a lien from ever being placed against a property. Someone who signs a lien waiver gives up the right to place a lien against a property.
A property owner may ask a contractor, subcontractor, or supplier to sign a lien waiver to prevent them from placing any liens against the property.
A Lien Release removes an existing lien on a property. It is only required after a property owner or contractor pays the claimant.
Does a Lien Release need to be notarized?
Most states do not have legal statutes that require you to notarize your Lien Release. One state that does require you to notarize a Lien Release is Texas.
Notarization is never a bad idea. It simply ensures your document's authenticity and enforceability. Our template includes a Notary Acknowledgement section.
When should I file a Lien Release?
In the United States, there are varying statutory deadlines for when you must file a Lien Release.
As a general rule, it’s a good idea to create and file a Lien Release as soon as you have been paid the lien claim amount.
State deadlines for releasing a Mechanic’s Lien
Generally, the state regulations that require claimants to file a Lien Release within a certain deadline or timeframe are either based on:
- When the claim is paid (i.e., satisfied)
- When the claimant receives a request (i.e., demand)
In the table below, find the deadline for your state. Please note, not all states have statutes that outline deadlines and penalties for Mechanic’s Liens.
The following states don’t have statutes that outline deadlines and penalties for Mechanic’s Liens:
- California
- Florida
- Georgia
- Hawaii
- Idaho
- Indiana
- Kansas
- Maryland
- Massachusetts
- Minnesota
- Nebraska
- New Hampshire
- New Mexico
- New York
- Pennsylvania
- Rhode Island
- Vermont
- Virginia
In New Hampshire and Maryland, a judge directs the release of a Mechanic’s Lien.
Is there a penalty for not filing a release on time?
Yes. Once a property owner has paid the lien claim, it’s possible that the claimant could receive a penalty if they don’t file a Lien Release within their state’s statutory time limit.
Penalties vary from state to state. Some states do not outline a clear penalty. Check your state’s laws surrounding Lien Releases to ensure your compliance and prevent unnecessary penalties.
Where do I file a Lien Release?
As a claimant, you must file a Lien Release in the same court or office where you filed the initial 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.
