Lien Waivers: The One Document Your HOA Should Never Pay a Contractor Without
In my last few articles, we've talked about risk mitigators before you sign anything, conservative scheduling, and how to navigate decisions like exterior colors. Today I want to focus on a single document that quietly does more to protect your HOA from financial disaster than almost anything else in the project file.
It's called a lien waiver. If your board isn't collecting them — properly, every month, from everyone — your community is exposed in a way most board members don't realize until a lien notice arrives in the mail.
Here's what every HOA board member and community manager should know.
1. What a lien waiver actually is
A lien waiver is a signed statement from a contractor, subcontractor, or material supplier saying, in effect: "I've been paid for the work or materials I provided, and I give up my right to file a mechanic's lien against the property for that amount."
Mechanic's liens are powerful. In most states, an unpaid sub or supplier can file a lien against your HOA's common property even if the HOA already paid the general contractor in full. If the GC pockets the money and doesn't pay their people, the HOA can be forced to pay twice — or face a clouded title on community-owned property. Lien waivers are how you prevent that.
2. Know the four types
There are four flavors of lien waiver, and they are not interchangeable:
Conditional Partial — Waives lien rights for a specific payment, but only once that payment actually clears. Use this when you're about to issue a progress payment.
Unconditional Partial — Waives lien rights for that payment immediately, no strings. Use this after a progress payment has cleared.
Conditional Final — Waives all lien rights on the project, contingent on the final payment clearing.
Unconditional Final — Waives all lien rights, period. This is what you collect at closeout, after the final check has cleared.
Mixing these up is one of the most common mistakes I see. An unconditional waiver signed before payment clears can leave the contractor unpaid with no recourse — and a conditional waiver collected at closeout leaves the HOA exposed if anything goes sideways. Match the form to the moment.
3. Collect from subs and suppliers — not just the GC
This is the step that trips up most boards. A waiver from your general contractor only protects you from a lien filed by the GC. It does nothing to stop the roofing sub, the paint supplier, or the dumpster company from filing their own lien if the GC fails to pay them.
For every pay application, require lien waivers from the GC and from every sub and major supplier who worked or delivered material that month. Yes, it's a stack of paper. Yes, it's worth it.
4. Tie waivers to every pay application — no waiver, no check
Make this a contractual requirement up front, not a request you make later. The pay application package the GC submits to you each month should include lien waivers for the prior payment (unconditional, now that the prior check cleared) and conditional waivers for the current request. If the package is incomplete, the check doesn't go out. Period.
This single discipline — no waiver, no check — eliminates the vast majority of lien exposure on an HOA project.
5. Notarize them. Yes, really.
Here's the part most boards skip: get the waivers notarized.
A notary public verifies the signer's identity and witnesses the signature. That matters for three reasons:
It kills the "that wasn't my signature" defense. Without notarization, a sub can later claim someone else signed on their behalf and the waiver is invalid. With a notary stamp, that argument is essentially dead.
Some states require it. Texas, for example, requires final unconditional waivers to be notarized to be enforceable. Colorado doesn't strictly require it for most waivers, but courts give notarized waivers significantly more weight, and it removes ambiguity in any dispute. Check your state's rules — and when in doubt, notarize.
It signals professionalism on both sides. Contractors who balk at a $15 notary fee on a six-figure project are telling you something about how they'll handle the rest of your money.
Mobile notaries will come to a pay app meeting or jobsite for about the cost of a sandwich. Build it into the process from day one. It's the cheapest insurance policy on the project.
6. The closeout step everyone forgets
Before you release retainage — that final 5% you've been holding back — you need final unconditional lien waivers from the GC and every sub and supplier. Not partials. Not conditionals. Final unconditionals, notarized.
This is the moment your project is truly closed out. Until those final waivers are in hand, the HOA's exposure is still open, no matter how good the punch list looks.
Lien waivers aren't glamorous. They won't win you a board election or get applause at the annual meeting. But the boards I respect most all run this discipline tightly — because the ones that don't eventually learn the hard way.
If you'd like a sample lien waiver tracking log I use on projects, comment below or DM me and I'll send it over.
Next up: Project Closeout — How to Tell If Your HOA Project Is Actually Done. Spoiler: it's not when the contractor says it is.
Sean Davis, PMP | Civil Engineer | Current HOA Board Member (12 years) | DHA Construction Management | Broomfield, CO
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