What is a Lien Release? How Does It Protect You?

You hire a contractor and assume that he will pay his suppliers and subcontractors.   Most contractors are honest and you will never have a problem.

However, things can change quickly in a tough economy.   Not all honest contractors are good business people.  They don’t charge enough to cover their operating expenses or overspend and before they know it, they are in over their heads.  

When your contractor is in trouble, it becomes a nightmare for you.  The subcontractors and suppliers start coming directly to you to ask for payment.   It doesn’t matter to them that you paid your contractor in full.  They want to be paid too.   They may walk off the job.  They may take back materials to try to recuperate their loses.  They may even be able to put a lien on your property.    

You can protect yourself by thoroughly checking your contractor’s background before signing a contract, by requiring signed lean releases, and by trusting your instincts.    

Some states require contractors and subcontractors to provide lean releases.  Here is a link to a sample lien release   http://www.lni.wa.gov/Forms/pdf/625029a0.pdf

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