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What Is a Conditional Lien Waiver?

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  • Written By: Alexis W.
  • Edited By: Heather Bailey
  • Last Modified Date: 25 November 2016
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A conditional lien waiver refers to a situation in which a hold on a piece of property will be removed, but only if certain conditions are met. Liens are put on a property when a debt is owed and not satisfied. The liens are normally removed when the debt is paid, but under a conditional lien waiver, the debts are instead removed only if and when given conditions are met.

A lien may be placed on a property for a number of reasons. Liens can also be placed on several different types of tangible, real property that has value when sold. When a lien is placed on the property, it can inhibit the owner’s ability to transfer or sell the property.

One of the most common reasons for the placement of a lien on property is if the property owner has a judgment against him in court and cannot pay the debt. The judge may order that the lien be placed on the property. This means that, if and when the property is sold, money is taken from the sale and given to the plaintiff to whom the money is owed.

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Mechanics liens are common on cars. For example, a mechanics lien may be placed on the vehicle if the person who owns the car cannot pay. Likewise, construction liens are placed on homes if the person does not pay the contractor who performed the construction. Tax liens and numerous other types of liens also exist, any time an unpaid debt is owed.

A conditional waiver permits the person to sell the home or other piece of property, waiving the lien or the limitation on the sale. A conditional lien waiver, however, is different from an unconditional waiver in which the homeowner can simply sell the home and no longer have the lien on the title. With a conditional waiver, the lien is waived or lifted from the property only when certain conditions are met. Most commonly, with this type of lien waiver, one of the conditions is that the person who is owed the money or debt must sign a specific release permitting the debtor to sell the home or property. When a conditional lien waiver exists, most courts will honor the waiver only if the property owner actually follows through with the conditions stated in the conditional lien waiver.

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