Georgia Residential Contractor Practice Exam 2025 - Free Residential Contractor Practice Questions and Study Guide

In construction, a lien waiver is a document that releases the right to file a lien against a property in exchange for payment or the promise of payment. This means that when a contractor, subcontractor, or supplier signs a lien waiver after receiving payment, they relinquish their right to claim any outstanding payments for the work done, essentially acknowledging that they have been compensated for their services.

This is particularly relevant in the construction industry because it helps ensure that property owners can avoid potential conflicts or claims that could arise if a contractor or supplier were to assert a lien due to unpaid work or materials. By providing a lien waiver, the contractor assures the property owner that they will not pursue any financial claims related to the work completed up to that point, creating a clear boundary around the financial obligations related to the project.

Other options do not accurately describe a lien waiver; for instance, a request for additional funding pertains to securing more money rather than relinquishing rights to claims, and an agreement to subcontract work focuses on delegating responsibilities rather than resolving financial claims. A notice of project completion is a different formal document that indicates that the work has been completed and does not relate to the release of payment claims. Understanding the purpose and function of a lien waiver is vital for contractors