What Is A Lien Form?
A lien form is a document that explains someone’s claim on a property which is used by someone else. Therefore, this property can be taken back if the person who is using the property hasn’t made a payment. For example, if you purchase a vehicle, then the lien is made and it will be discharged when the payment has been completed.
After that payment has been paid fully, then the collateral assets will be returned to the borrower and the lien is not applicable anymore. In this page, you can download the release of lien form for free without payment or registration. All forms are editable and customizable. The templates are available in many formats: Word and PDF.
What Are The Type of Liens?
There are several types of lien you can use that each of them has a different purpose. These areas follow:
- Consensual liens – The consensual lien means both parties agree with the placement of it. This can be the purchase-money liens. For example for the first mortgage, the owner agrees if the bank secures the home with the lien if the debt is unpaid.
- Statutory or the non-consensual lien – This can be obtained from a court with two types of statutory.
- Tax liens – It is placed by local government, federal or state against the property of someone. Contractor’s liens – A contractor can file a lawsuit to court when the homeowner doesn’t pay the contractor. By this way, the homeowner will not be able to sell the property unless the debt has been paid off.
- Judgment Liens – For small claim cases, this type of liens are popular which the creditor can include the lien for real property, garnish wages and seize bank accounts.
What Is The Purpose of A Lien Waiver?
There are some purposes for issuing a lien waiver. One of them is to give protection that protects the paying party. This is very essential for the payor because this will free them from liability of a specific amount.
Conditional VS Unconditional Waivers
- Unconditional waiver – The unconditional waivers are only used when the payment has been received.
- Conditional waiver – The conditional waiver, on the other hand, is used while sending the invoice or before receiving the payment. It is because the conditional waiver is said to be valid when the required condition has been met, for example, payment. If the payment never is never made, then the terms of waivers don’t apply anymore. Besides using a waiver will strengthen the business. It is proof that you are a team player. Therefore, the lien waiver is crucial for your customer’s security. Another important reason to use this is it gives faster payment.
Note that liens are designed to protect the contractor. The law also exists to protect the contractor and homeowners too. If there is a case that one party doesn’t pay the stuff, the party cannot occupy this property until the debt is completely paid.
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