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Whether you鈥檙e a general contractor (GC), subcontractor, or property owner, understanding Kentucky lien waivers is crucial. These essential documents function as receipts acknowledging payment up to a specific amount, thereby waiving the party鈥檚 right to file a lien against the property for that amount. While the concept is straightforward, the practical application of lien waivers can be complex.
Several types of lien waivers exist, each requiring submission at specific times during a project. (For a deeper dive into lien waiver basics, refer to The Ultimate Guide to Construction Lien Waivers for Subcontractors.) Moreover, lien waiver requirements vary by state, with each jurisdiction setting its own rules regarding valid forms, contents, and enforcement.聽
Understanding these nuanced requirements is important for subcontractors to maintain compliance, prevent payment disputes, and protect their financial interests. So grab your hard hat, and let鈥檚 dive into the world of Kentucky lien waivers!
鈥�(For more general information on lien waivers, check out this on-demand webinar: End the Whack-a-Mole: Lien Waiver Best Practice for Subs.)
Lien waivers in Kentucky can create confusion, as the state doesn鈥檛 regulate lien waivers with a standard or statutory form. What鈥檚 more, Kentucky law has some important stipulations when it comes to the use of lien waivers in construction.
Foremost is that the state prohibits any 鈥減rovision[s] that purport to waive, release, or extinguish" a party's full mechanics lien rights. This means that broad, unconditional lien waivers that relinquish a contractor or subcontractor鈥檚 entire lien rights are considered void and unenforceable under Kentucky鈥檚 public policy (think unconditional final lien waivers).
However, the law does carve out an exception for 鈥減artial waivers of lien rights provided by the contractor or subcontractor for progress payments.鈥� This allows project stakeholders to execute conditional lien waivers that are tied to specific progress payments. Additionally, Kentucky also permits the use of unconditional partial lien waivers, as long as they are limited to progress payments and do not purport to waive the party鈥檚 full lien rights. This approach aims to protect subcontractors鈥� lien rights while still facilitating the use of lien waivers for progress payments.
Some additional details to keep in mind when handling lien waivers in Kentucky:
- The outlines several requirements for the validity of both lien waivers and mechanic鈥檚 liens in the state.
- Statutes within this act note that any provisions that remove parties鈥� ability to dispute cases in court are unenforceable. This offers extra support to subs who may need to bring a claim to court if they don鈥檛 receive payment.
- Construction participants in the state must be vigilant about the specific language used in any lien waivers, ensuring they only cover partial, progress-based rights鈥攏ot broad, full waivers.
Kentucky does not require a specific or statutory lien waiver form.
The state accepts both conditional and unconditional lien waivers as long as they are for progress payments.
Kentucky does not require the notarization of lien waivers (unless requested by the client).
Valid lien waivers in Kentucky must:聽
- be in writing聽
- be signed by the waiving party
- clearly state the amount being waived and the property to which they apply
If a contract governing lien waivers in Kentucky includes provisions that waive lien rights in the contract, the lien waiver becomes . (One exception to this rule is partial lien waivers for progress payments.)
Per Kentucky law, lien rights cannot be waived prior to payment. This excludes partial lien waivers for progress payments.
Completing Lien Waivers in Siteline
- Create, monitor, and track all your lien waivers in one place.
- Automatically fill out and send the right waiver at the right time.
- Request lower-tier lien waivers from all your sub-tier contractors, vendors, and suppliers鈥攊ndividually or in bulk.
- Securely collect e-signatures, with automatic reminders for any unsigned waivers.
- Package and submit signed waivers to your GCs directly within Siteline.
No, Kentucky doesn鈥檛 mandate any specific or statutory lien waiver form. It鈥檚 important to carefully review all language to make sure you stay protected throughout the job.
While the contents of Kentucky lien waivers are unregulated, lien waivers in the state are considered valid when:
- They clearly state the amount being waived and the property to which they apply, and
- They are signed by the party waiving their lien rights.
According to Kentucky state law, there are some important limitations on when lien waivers can be exchanged:
- Contractual provisions that attempt to waive, release, or extinguish a party's full lien rights are considered "void and unenforceable" under Kentucky law. This means construction contracts cannot include clauses that require upfront, full lien waivers before any work has been performed.
- The exception is for "partial waivers of lien rights provided by the contractor or subcontractor for progress payments." Kentucky law allows for lien waivers to be exchanged in conjunction with progress payment applications.
This means lien waivers in Kentucky must only be provided either:
- As conditional waivers when submitting a pay application for a progress payment, or
- As unconditional waivers after receiving payment for a progress payment or the final project.
Make sure to read the contract thoroughly and remove any clauses that put your lien rights at risk. If you鈥檙e wondering which lien waivers to use and when, check out this comprehensive guide.
Lien waiver provisions can be added to the contract in Kentucky unless they waive lien rights entirely.
Kentucky aims to protect subcontractors through various avenues; any contractual provision that tries to of rights to resolve disputes through litigation is void.聽
In the case of a dispute, we recommend reviewing the lien waiver and corresponding contract carefully and in full. If the dispute can鈥檛 be resolved directly between both parties, consider consulting with a construction law attorney familiar with Kentucky lien laws.
Review the following resources to learn more about navigating Kentucky lien waivers:
- (covers mechanic鈥檚 liens)
- (part of the Kentucky Fairness in Construction Act)
- (covers mechanic鈥檚 liens)
Automate the process with Siteline. Contractors use our lien waiver tool to digitize all of their lien waiver forms (primary and vendor), send waiver requests to lower-tier contractors and vendors, collect e-signatures, and submit completed waivers to their clients鈥攚ithout ever leaving the system. Siteline even provides centralized tracking to help contractors monitor vendor waiver statuses to see who鈥檚 received the form, who鈥檚 opened it, and who has (or hasn鈥檛) signed. This means contractors can collect waivers faster while eliminating payment delays caused by compliance holds.
Disclaimer: The information provided on this page is for general informational purposes only and does not constitute legal advice. We recommend you consult a qualified attorney for advice specific to your situation.