Lien Waivers in Michigan: How to Sign Them Without Destroying Your Rights

Every Michigan contractor, subcontractor, and supplier will be asked to sign a lien waiver at some point. Most sign without reading the language carefully. Some sign unconditional waivers before the check has cleared, or before a check has even been written. Some sign broad final waivers that release far more than they intended.

The result is predictable: when payment falls through, the contractor discovers that the waiver they signed wiped out the very rights that would have forced payment.

Lien waivers are not mere formalities. Under Michigan’s Construction Lien Act (MCL 570.1101 et seq.), a signed lien waiver can permanently eliminate your right to file a construction lien, one of the most powerful payment tools available to Michigan contractors. Getting the waiver language right is not optional.

This guide explains what Michigan lien waivers actually release, the difference between conditional and unconditional waivers, how to read the forms GCs hand you at payment time, and what to do when you are pressured to sign something that does not protect you.

For immediate assistance reviewing a lien waiver or protecting your construction payment rights in Michigan, contact the Michigan construction attorneys at Szura & Delonis, PLC. We represent contractors, subcontractors, and suppliers throughout Oakland, Wayne, Macomb, Washtenaw, and Livingston Counties.

What Is a Lien Waiver Under Michigan Law?

A lien waiver is a written document in which a contractor, subcontractor, or supplier gives up — in whole or in part — their right to file a construction lien against the project property in exchange for payment or in anticipation of payment. Michigan’s Construction Lien Act (MCL 570.1115) governs how lien rights can be waived, modified, or released.

Lien waivers typically flow through the payment chain: an owner pays a general contractor and requires a lien waiver covering the full project or the current payment application. The GC, in turn, collects lien waivers from every subcontractor and supplier before passing payment downstream. Title companies and lenders also demand lien waivers at closing to confirm the property can transfer with a clean title.

The practical result is that lien waivers are ubiquitous on Michigan construction projects — and the pressure to sign them quickly, without review, is constant.

What a Lien Waiver Does — and Does Not — Release

This is the single most misunderstood aspect of lien waivers in Michigan construction. Many contractors believe that signing a lien waiver means they have given up all rights to pursue payment. That is not correct — unless the waiver language says so specifically.

A lien waiver releases your right to file a construction lien against the specific property. It does not automatically release: your breach of contract claim against the GC or owner, your quantum meruit claim for the reasonable value of work performed, your bond claim rights on public projects under Michigan’s Little Miller Act, your rights under the Michigan Builders Trust Fund Act (MCL 570.151 et seq.), or your right to sue for payment in court or arbitration.

However, many GC-drafted lien waivers may contain language that goes far beyond releasing lien rights. Phrases like “releases all claims,” “waives all rights against the owner and contractor,” or “discharges all claims arising out of the project” can release your breach of contract claim, your change order claims, and your retainage rights along with your lien rights.

⚠ Critical Warning: Always read the full text of every lien waiver before signing. A lien waiver that releases “all claims” or “all rights” is fundamentally different from one that releases only lien rights. The title “Lien Waiver” does not limit what the document actually releases — the operative language does. If you are unsure what you are giving up, do not sign until an attorney reviews the form.

The Four Types of Michigan Construction Lien Waivers

Michigan construction practice uses four categories of lien waivers. Understanding which one you are signing, and when each is appropriate, is essential to protecting your payment rights.

1. Conditional Partial Lien Waiver

A conditional partial waiver releases lien rights for a specific payment — and only upon actual receipt of that payment. If the payment is not made (for example, the check bounces or the wire transfer is reversed), the conditional waiver is void and your lien rights remain intact. The waiver covers only the portion of the contract value specified, not the full contract, retainage, or future work.

This is the safest type of lien waiver to sign during an ongoing project. Use it for progress payments covering work billed through a specific date or payment application.

2. Unconditional Partial Lien Waiver

An unconditional partial waiver releases lien rights for a specific payment amount, regardless of whether payment is actually received. Once signed, it is effective immediately, and Michigan courts have enforced unconditional waivers even when the contractor never received the money.

Never sign an unconditional partial lien waiver before the corresponding payment has cleared. Never sign it in exchange for a promise of payment that has not yet been fulfilled.

3. Conditional Final Lien Waiver

A conditional final waiver releases all remaining lien rights for the entire project, but conditioned on receipt of the specified final payment. Once the final payment is received, all lien rights are released permanently. This is the appropriate document to use at project completion when receiving final payment.

4. Unconditional Final Lien Waiver

An unconditional final waiver releases all lien rights for the entire project immediately upon signing; regardless of payment. Signing an unconditional final waiver without receiving full final payment, including retainage, may eliminate every lien remedy you have.

Unconditional final waivers should be signed only after full final payment , including all retainage, has been confirmed received in cleared funds.

Side-by-Side Comparison: Conditional vs. Unconditional Waivers

Michigan’s Construction Lien Act: The Statutory Framework for Waivers

Michigan’s Construction Lien Act (MCL 570.1101 et seq.) establishes the framework within which lien rights can be waived. The key provisions every contractor must understand are outlined below.

MCL 570.1115 — Waiver of Lien Rights

MCL 570.1115 governs the waiver and modification of lien rights under the Construction Lien Act. The statute permits lien rights to be waived by written instrument, but the waiver must be clear and express. Courts applying this provision have distinguished between waivers that clearly and unambiguously release lien rights and language that is ambiguous as to what was intended to be released. Ambiguity in a lien waiver is generally construed against the party seeking to enforce the waiver.

MCL 570.1110 — Sworn Statements and Their Relationship to Lien Waivers

Michigan’s Construction Lien Act requires a contractor or subcontractor to provide a sworn statement in specified circumstances. The sworn statement allows the owner to verify which subcontractors are owed money and to protect themselves from paying the GC while subcontractors remain unpaid.

The sworn statement mechanism interacts critically with lien waivers: when an owner pays the GC and collects lien waivers from subcontractors based on the sworn statement, those subcontractors’ lien rights as against the owner are implicated.

MCL 570.1110(7) — Owner’s Duty to Withhold Upon Receipt of Notice

After a sworn statement is provided, the owner or lessee may withhold, and upon written demand from the contractor shall withhold, from amounts due or to become due for work already performed an amount sufficient to pay sums due to subcontractors, suppliers, or laborers shown by the sworn statement or due to lien claimants who have provided a notice of furnishing. From the amount withheld, the owner or lessee may directly pay those claimants. Because the statutory framework is fact-sensitive, contractors should evaluate the sworn statement, any notice of furnishing, and the payment chain before signing a waiver that may affect available remedies.

Practical Note — The Sworn Statement Leverage Point: Before signing any lien waiver, confirm whether the GC has submitted a sworn statement to the owner listing you as a subcontractor owed payment. If the owner has received the sworn statement and disbursed funds to the GC without ensuring your payment, the owner may have independent liability. Do not sign a lien waiver that releases the owner before evaluating this issue.

Partial vs. Final Lien Waivers: What Each Covers on a Michigan Project

On a typical Michigan commercial construction project with monthly payment applications, lien waivers flow in two streams: progress payment waivers that accumulate through the project, and a final lien waiver at project completion. Understanding exactly what period and what dollar amount each waiver covers is critical to ensuring you are not releasing more than you intend.

Progress Payment Waivers: Protecting Retainage and Future Work

Every progress payment waiver you sign should include three specific protections:

1. Billing period identification. The waiver should cover only the specific payment application or billing period, identified by date. “Work performed through October 31, 2025” is proper. “All work performed on the project to date” may be broader than you intend if it encompasses disputed change orders or work performed after the stated date.
2. Retainage exclusion. The waiver should expressly exclude retainage. Retainage is earned. It is money you are owed but not yet being paid. Releasing lien rights for retainage in a progress payment waiver is a common and costly mistake. The waiver should state: “Excepting retainage in the amount of $[X] not yet due and payable.”
3. Conditionality. The waiver should be conditional. “This waiver is conditioned upon and effective only upon receipt of payment in the amount of $[X]” is the essential protective language.

A progress payment waiver that lacks these three elements: billing period specification, retainage exclusion, and conditionality, is a document that should not be signed without modification or attorney review.

Final Lien Waivers: When You Sign One and What It Covers

A final lien waiver releases all remaining lien rights for the entire project. On a Michigan construction project, a final lien waiver should not be signed until three conditions are confirmed:

1. Full final payment has been received — all invoices paid in cleared funds.
2. All retainage has been released and received.
3. All disputed change orders have been resolved, paid, or expressly carved out of the waiver.

If any of these three conditions are not met, the final waiver should be conditional, not unconditional, and should expressly identify any outstanding amounts or disputed items that are excluded from the waiver.

Example Scenario: A Pontiac-based framing subcontractor completes a large Oakland County apartment complex. At final closeout, the GC presents an unconditional final lien waiver along with a check for the final payment. The subcontractor has $18,000 in disputed change orders that have not been paid or formally denied. The subcontractor signs the unconditional final waiver before confirming the check has cleared and without carving out the change order dispute. The check is returned for insufficient funds three days later. The subcontractor’s lien rights, which would have secured recovery of both the final payment and the change orders, may be gone. The remaining remedies are a breach of contract claim and a potential Builders Trust Fund Act complaint, both more expensive and uncertain than lien foreclosure would have been.

The Bounced Check Problem: What Happens to Your Lien Waiver?

One of the most persistent misconceptions in Michigan construction is that a bounced check automatically voids a lien waiver. The answer depends entirely on whether the waiver was conditional or unconditional.

If you signed a conditional lien waiver: “effective only upon receipt of payment in the amount of $[X]”, a bounced check means the condition was never satisfied. The waiver never became effective. Your lien rights remain intact, subject to the 90-day filing deadline from last furnishing under MCL 570.1111.

If you signed an unconditional lien waiver, a bounced check may not restore your lien rights. The waiver may be deemed by a court to have been effective the moment you signed it. Whether you can pursue fraud, misrepresentation, or failure of consideration arguments to set aside the waiver is a fact-specific legal question that requires immediate attorney consultation, and the outcome is far less certain than a conditional waiver would have been.

⚠ The Bounced Check Scenario — Do This Immediately: If you signed a lien waiver and the corresponding payment has not cleared: (1) immediately calculate your 90-day lien deadline from your last furnishing date; (2) determine whether your waiver was conditional or unconditional; (3) if conditional, prepare to file your lien immediately and do not wait for the payment dispute to resolve; and (4) contact a Michigan construction attorney the same day. The window between a bounced check and an expired lien deadline closes fast.

GC-Drafted Lien Waiver Forms: The Language to Watch For

Some general contractors in Michigan may present their own lien waiver forms, not the neutral statutory forms, designed to maximize the scope of the release they obtain from subcontractors. Being able to identify problematic language before you sign is a core business skill for any Michigan contractor.

Language That Expands the Release Beyond Lien Rights

The following phrases, when present in a lien waiver, may release rights well beyond your lien claim. Each one deserves careful scrutiny before signing:

• “Releases all claims, demands, and causes of action” — may release your breach of contract claim, change order claims, and delay claims.
• “Waives all rights against the owner, general contractor, and their sureties” — potentially releases your bond claim on a public project.
• “Full and final settlement of all amounts due or to become due” — may release future invoices for work not yet billed.
• “Arising out of or related to the project” — a broad scope that could capture disputes not yet known at signing.
• “Including claims for extras, changes, and additional work” — directly releases unpaid change orders.

None of these phrases necessarily makes the waiver invalid. But each one expands the scope of what you are giving up. Before signing a form that contains any of this language, either add a handwritten carve-out for specific disputed amounts or excluded claims, or request that the GC use a form that limits the release to lien rights only.

How to Add a Carve-Out for Disputed Amounts

A carve-out is a handwritten or typed exception added to the waiver form before signing. A proper carve-out identifies the specific excluded amount and the basis for exclusion. The following is sample language that can be adapted for use:

“Notwithstanding the foregoing, this waiver expressly excludes and does not release: (a) retainage in the amount of $[X] not yet due and payable; (b) Change Order Request No. [X] dated [date] in the amount of $[X], which is currently disputed; and (c) any claims arising from events occurring after [date].”

Have the GC’s project manager initial the carve-out before you sign. Keep a copy. If the GC flatly refuses to allow a carve-out for a legitimate disputed amount, that refusal may itself be a significant warning sign that the waiver is being used to defeat a valid claim rather than simply administer a payment.

The Timing Trap: Never Sign an Unconditional Waiver Before Funds Clear

The most common way Michigan contractors lose lien rights is by signing an unconditional lien waiver in the same transaction as receiving a check, but before confirming the check has cleared. This sequence is standard GC practice: hand the sub the check and the unconditional waiver at the same time and create pressure to sign both before leaving the room.

The correct practice: accept the check, sign a conditional lien waiver stating it is effective only upon receipt of cleared funds, and wait for the check to clear before releasing any unconditional waiver. A GC who refuses to accept a conditional waiver and insists on an unconditional waiver before funds clear should be treated as a possible payment risk.

Lien Waivers and Retainage: How to Protect Earned Retainage Throughout the Project

Retainage is the percentage of each progress payment (typically 5 to 10 percent on Michigan commercial projects) that the owner or GC holds back until substantial completion. On a $500,000 subcontract, retainage of 10 percent means $50,000 of earned money is withheld throughout the project. That money is owed to you. It must be protected in every lien waiver you sign.

The standard approach is straightforward: every progress payment waiver should contain an express exclusion for outstanding retainage. When the project reaches substantial completion and retainage is released, collect retainage payment, confirm funds have cleared, then sign a conditional partial lien waiver covering the retainage amount specifically.

Never include retainage in the release amount of a progress payment lien waiver. Never sign a final lien waiver while retainage remains outstanding, unless the final lien waiver is specifically conditioned on receipt of retainage as part of the final payment amount.

Retainage + Lien Rights — The Clock Keeps Running: Your 90-day lien deadline under MCL 570.1111 runs from your last day of furnishing labor or materials. Not from the date retainage is supposed to be released. Do not let a retainage dispute push you past your lien deadline. If retainage is not released within a reasonable period after substantial completion, file a construction lien for the retainage amount and pursue payment through lien foreclosure. Waiting for the retainage release process to play out is not a reason to miss the lien deadline.

Lien Waivers and Bond Claims: Does Signing a Waiver Kill Your Bond Claim?

On public construction projects in Michigan (state, county, school, and municipal work) the property itself cannot be liened. Payment protection comes instead from payment bonds required under Michigan’s Little Miller Act (MCL Act 213 of 1963). On private projects, GCs and owners sometimes also require payment and performance bonds.

Does signing a lien waiver eliminate your bond claim rights? The answer depends entirely on the waiver language. A lien waiver that releases only “lien rights” under the Michigan Construction Lien Act does not release a bond claim, because a bond claim is a separate legal remedy against the surety, but not a right against the real property.

A lien waiver that releases “all claims against the owner, contractor, and their sureties” may release your bond claim. A waiver covering “all rights under the project” may be interpreted to include bond rights. On any public project or bonded private project, have a construction attorney review the lien waiver language before signing. The combination of releasing lien rights (which did not exist anyway on a public project) and bond rights (your only real remedy) through a single broadly drafted document is a trap that can cost a subcontractor on a Michigan public project.

Signed Under Pressure: Can You Challenge a Lien Waiver in Michigan?

Michigan contractors report being told: “Sign the waiver or we won’t process your payment” — or more aggressively, “Sign or you are off this job.” Does economic pressure constitute duress sufficient to void a lien waiver in Michigan?

Legal duress, the kind that can void a contract under Michigan law, requires more than hard bargaining or economic pressure. Michigan courts have held that the threat must be wrongful or unlawful and must leave the party with no reasonable alternative. A GC conditioning payment on a lien waiver, while unfair, may not meet the threshold for legal duress sufficient to void the waiver in court.

The practical implication: do not sign an improper lien waiver intending to challenge it later on duress grounds. The better approach is to protect yourself before signing. Add carve-outs, use conditional language, and refuse to sign unconditional waivers for amounts not yet received. After-the-fact challenges to signed lien waivers are expensive and very uncertain.

AIA Forms and Lien Waivers on Michigan Projects

On projects using AIA contract documents, lien-waiver practice usually arises through the payment-application and closeout provisions rather than through a standalone statutory form. AIA G702 and G703 are payment-application forms; they are not themselves lien waivers. Under AIA A201-2017, progress-payment applications may be supported by data the Owner or Architect require, including releases and waivers of liens from subcontractors and suppliers, and § 9.10.2 expressly provides that final payment and any remaining retainage do not become due until the contractor provides specified closeout materials and, if required by the owner, receipts, releases, and waivers of liens, claims, security interests, or encumbrances.

Michigan contractors working on AIA projects should review any lien waiver exhibit or addendum at the time of contract execution, not at the first payment application. Negotiating waiver language before the project starts is easier than fighting over it during a live payment dispute.

What to Do When You Are Presented With a Lien Waiver Form You Should Not Sign

The practical scenario: you are at the GC’s office to pick up a check. The project manager hands you an unconditional final lien waiver that releases all claims, includes retainage not yet paid, and waives bond rights, or any variation of that situation. The following protocol applies:

1. Do not sign under time pressure. “I need to review this with my attorney” is a complete and appropriate response. A reasonable GC will likely allow 24–48 hours for review. A GC who refuses is creating a pressure situation that itself may warrant immediate legal consultation.
2. Identify what you are being asked to release: lien rights only, or all claims? What billing period? Does it include retainage? Does it release bond claims?
3. Identify what you are receiving in exchange: a specific check amount, a wire transfer, or a promise of future payment?
4. If the payment is by check, sign only a conditional waiver — effective upon receipt of cleared funds — and note the check number on the waiver.
5. Add a handwritten carve-out for any outstanding retainage, disputed change orders, or unresolved claims before signing.
6. Keep a signed copy of every waiver you sign, including your handwritten modifications. Do not allow only the GC to retain a copy.
7. If the GC insists on an unconditional waiver or refuses your carve-out, call a Michigan construction attorney before proceeding. This is the scenario where legal advice is cheapest: before you sign, not after.

Common Michigan Contractor Lien Waiver Mistakes — and How to Avoid Them

After years of representing contractors in lien enforcement and payment disputes throughout Metro Detroit, the following lien waiver mistakes are not unusual:

• Signing an unconditional partial lien waiver in exchange for a check before the check clears. The most common and most preventable mistake.
• Signing a final lien waiver while retainage remains outstanding. Retainage is your money. Never release it before you have it.
• Signing a lien waiver form that releases “all claims” without reading the scope of the release. The title says “Lien Waiver.” The language may release your change order claims, delay claims, and everything else.
• Failing to carve out disputed change orders from progress payment waivers. Once signed without a carve-out, the argument that the waiver did not cover the disputed change order becomes much harder to make.
• Not keeping copies of signed waivers. When a payment dispute arises, the GC’s copy of what you signed may look different from what you remember signing.
• Signing a lien waiver on a public project without realizing it includes a release of bond claim rights — the only real payment remedy on a public job.
• Waiting until after the lien deadline to consult an attorney about a signed waiver. If the waiver was conditional and the condition was never met, you may still have lien rights, but only if you act before the 90-day clock expires.

Frequently Asked Questions About Michigan Construction Lien Waivers

What is the difference between a conditional and unconditional lien waiver in Michigan?

A conditional lien waiver is effective only upon actual receipt of the payment specified. If payment is not received, the waiver is void and lien rights are intact. An unconditional lien waiver is effective immediately upon signing, regardless of whether payment is received. Always use conditional waivers on Michigan construction projects unless payment has already been confirmed in cleared funds.

Can a GC in Michigan require me to sign a lien waiver before paying me?

A GC may ask for a lien waiver as part of the payment process, but Michigan law does not permit an advance contractual waiver of construction lien rights as part of the underlying improvement contract before work is performed. The safer practice is to use a conditional waiver tied to actual payment, rather than an unconditional waiver signed before funds are received.

Does a lien waiver in Michigan release my right to sue for breach of contract?

It depends on the waiver language. A waiver that releases only “lien rights” under the Construction Lien Act does not release your breach of contract claim. A waiver that releases “all claims” or “all rights against the contractor and owner arising out of the project” may release breach of contract claims. Read the operative language carefully — not just the title.

Can I add carve-outs to a lien waiver form a GC gives me?

Yes. A lien waiver is a contract. You may propose modifications before signing. Add a handwritten carve-out for retainage, disputed change orders, or any other amounts not included in the payment you are receiving. Have the GC’s representative initial your carve-out and keep a copy of the signed, modified form.

What happens if I sign a lien waiver and the check bounces?

If you signed a conditional lien waiver, the bounced check means the condition was never satisfied and the waiver is void. Your lien rights remain intact. If you signed an unconditional lien waiver, the bounced check does not automatically restore your lien rights, and you should consult a Michigan construction attorney immediately while your lien deadline is still open.

Does a lien waiver release my rights under Michigan’s Builders Trust Fund Act?

A standard lien waiver that releases only lien rights under the Construction Lien Act should not release your Builders Trust Fund Act rights under MCL 570.151. However, a broadly drafted waiver releasing “all claims arising out of the project” could potentially be interpreted to include trust fund claims. On any significant payment dispute, have an attorney review the waiver before signing.

Can I include unpaid retainage in a Michigan construction lien even after signing progress payment waivers?

Yes — provided your progress payment waivers expressly excluded retainage, which they should have. If you properly carved retainage out of each progress payment waiver, your lien rights for retainage remain intact. File the lien for the retainage amount within 90 days of your last furnishing under MCL 570.1111.

I signed a lien waiver on a public project and still have not been paid. What are my options?

On a public project, the real property cannot be liened, so the lien waiver may have released rights you did not have anyway. The critical question is whether the waiver also released your bond claim rights under Michigan’s Little Miller Act (MCL Act 213 of 1963). If the waiver language is limited to “lien rights,” your bond claim may still be viable, subject to its own strict notice and filing deadlines. Consult a Michigan construction attorney immediately if you are unpaid on a public project.

How long do I have to file a lien in Michigan if I realize my lien waiver was improper?

The 90-day lien deadline under MCL 570.1111 runs from your last furnishing regardless of any waiver dispute. If your waiver was conditional and the condition was not met, you must file within 90 days of last furnishing. Do not wait for the payment dispute to resolve before filing. The lien deadline does not pause during negotiations or payment disputes.

What should a proper Michigan lien waiver form include?

A proper Michigan construction lien waiver should include: (1) the claimant’s name and address; (2) the project name and address; (3) the specific payment amount being released; (4) the billing period or date through which the waiver applies; (5) an express conditionality provision for conditional waivers; (6) an express exclusion of retainage not yet paid; (7) a carve-out for any disputed claims or change orders; and (8) the date and signature of the claimant.

Protect Your Lien Rights Before You Sign — Contact Szura & Delonis, PLC

A lien waiver is one of the most consequential documents a Michigan contractor signs on any project. Sign the wrong form, at the wrong time, without the right carve-outs, and months of work, material costs, and retainage can disappear permanently, with no lien deadline to save you.

At Szura & Delonis, PLC, our Michigan construction law attorneys help contractors, subcontractors, and suppliers throughout Oakland, Wayne, Macomb, Washtenaw, and Livingston Counties understand what they are signing before they sign it, and protect their payment rights through lien enforcement when payment is withheld.

If you have questions about a lien waiver you have been asked to sign, need to review your payment documentation before a project closeout, or are facing a payment dispute involving a prior lien waiver, call us at (248) 716-3600 or contact us online. We respond quickly because construction payment disputes do not wait.

This article is provided for general educational and informational purposes only. It does not constitute legal advice and does not create an attorney-client relationship between the reader and Szura & Delonis, PLC. Michigan construction law involves complex statutory requirements and fact-specific analysis. Do not rely on this content as legal advice for your specific situation. If you have a time-sensitive construction law matter, consult a qualified Michigan construction attorney immediately.

About the Author

Richard M. Delonis is a Michigan construction, business, and real estate attorney at Szura & Delonis, PLC (Southfield/Metro Detroit). He advises construction managers, general contractors, subcontractors, and property owners on lien rights, collections strategy, contract disputes, and project-risk issues.