Release of Labour Lien Letter

Full Description

This lien release letter is a construction template for documenting that a labor lien on your property or project has been paid and resolved. Use it to put the resolution in writing, so the owner, contractor and any lender have a clear record that the claim is settled.

What is a construction lien release letter?

A construction lien is a claim against a property by a contractor, subcontractor or worker who has not been paid for work done on it. A lien can make it hard to sell or refinance the property because it clouds the title, and in a worst case it can lead to a forced sale. A lien release letter confirms in writing that the debt behind the lien has been paid or settled and that the claimant releases its claim. It is part of the paperwork used to clear the lien.

When to use it

• After paying a contractor or worker who has filed a labor lien
• When a lien dispute has been settled by agreement
• Before selling or refinancing a property that had a lien
• When a lender or title company asks for proof a lien is resolved
• At project closeout, to document that lien claims are cleared

What’s included

The template is a Word document (.docx). It is a letter that documents that a labor lien taken out on your property has been paid, so the resolution of the claim is recorded in writing.

How to fill it out

1. Enter the date and the names and addresses of the property owner and the lien claimant.
2. Identify the property by its address and legal description.
3. Reference the lien, including the filing date and any registration or document number.
4. State the amount paid or the settlement reached and the date of payment.
5. Confirm that the claimant releases the lien and its claim against the property.
6. Have the claimant sign the letter, and witness or notarize it if your jurisdiction requires.
7. File or register any formal release required by the county or land registry, and keep copies.

Common mistakes to avoid

• Treating the letter alone as removing the lien from title. In many places a formal release or discharge must be filed or registered.
• Paying before you have the signed release ready.
• Getting the property description or lien reference wrong.
• Mixing up a lien release with a lien waiver. They are used at different times.

Related templates and guides

• Construction Contract Between Owner and Contractor
• Contractor Application For Progress Payment
• Subcontractor Agreement Template
• Turn Over Letters And Certificate of Completion
• Construction Project Closeout

Frequently asked questions

What is the difference between a lien waiver and a lien release?

A lien waiver is usually signed by a contractor or supplier in exchange for payment, giving up the right to file a lien for that work. A lien release is used after a lien has been filed, to release or discharge that lien once the claim is paid or settled.

Does a lien release letter remove the lien from the title?

Not always on its own. In many jurisdictions, a formal release or discharge must be filed or registered with the county recorder or land registry before the title is cleared. Check the local process and keep proof of filing.

Who signs a lien release?

The party who filed the lien, such as the contractor, subcontractor or worker, signs the release, because they are the one giving up the claim. Some jurisdictions require the signature to be witnessed or notarized.

Is a lien release letter the same as a payoff letter?

No. A payoff letter states how much must be paid to clear a debt. A lien release letter confirms that the debt has been paid or settled and that the lien claim is released. You often need the payoff figure first and the release after payment.

Is this template for car or vehicle liens?

No. This template is for construction liens, such as a labor lien on a property or project. Vehicle lien releases are issued by the lender that financed the vehicle and follow a different process.