Don't Sign a Release Until it Passes this Checklist Massachusetts Webinar

This blog outlines key insights shared during a construction law webinar to help construction professionals better understand the different types of releases and how to handle them effectively.

Understanding Releases

A release is a legal agreement where one party gives up certain rights—usually in exchange for payment. For example, a contractor might waive the right to file a lien after receiving a specific payment. In some cases, a release may be part of a mutual “walkaway,” where both sides agree not to pursue legal action, even without payment.

There are two main types of releases:

• General Release: Waives all claims between the parties, regardless of project, subject matter, or time frame.

• Limited Release: Applies only to specific projects, claims, or time periods.

Important: Always read the full text of any release. Titles like “Partial Waiver” or “Final Release” can be misleading—critical terms may be buried in the fine print.

In construction, other terms like “waiver,” “remise,” or “discharge” might appear, but they all point to the same idea: giving up rights. Regardless of wording, make sure you understand what you’re agreeing to.

Also, a release must include consideration—something of value exchanged. For example, a promise to pay must be paired with the other party agreeing to give something up (like not suing). Releases can also be one-sided or mutual, but mutual releases are generally safer because they confirm that both parties consider the matter resolved.

Consideration Matters

For a release to be valid, there must be “consideration”—something of value exchanged between parties. A promise to pay without a reciprocal action isn’t enforceable. For example, a promise to pay by Friday is not valid unless the other party agrees not to sue in the meantime.

Releases can be one-sided or mutual. Mutual releases are usually preferable, as they confirm that both parties consider the matter resolved.

Construction-Specific Releases: The Massachusetts Mechanic's Lien

Massachusetts has specific rules regarding mechanic’s liens under Chapter 254 of the General Laws. One critical point: contracts that require parties to waive their lien rights before any work is done are unenforceable. Even if someone signs such a contract, the law protects their lien rights once work has begun and payment is due.

Partial vs. Final Lien Releases

There are two primary forms of lien releases:

• Partial Lien Releases: These cover work performed up to a certain date and payments received to that point. They are typically required for each progress payment.

• Final Lien Releases: Required at the end of a project, these releases confirm that no further payment or lien rights remain.

Both forms may also be referred to as “waivers,” and the title alone doesn’t dictate the content. The actual language in the document is what counts.

The Safe Harbor Form

Massachusetts law provides a statutory form for lien waivers in Chapter 254, Section 32. This form includes detailed sections outlining:

• Contract balance

• Adjustments

• Retainage

• Disputed claims

• Pending change orders

Using this form allows contractors to get paid while preserving the right to pursue disputes if properly documented. It also helps ensure clarity around what is being waived.

Bond Release Considerations

In Massachusetts, payment bonds are required on public projects where the prime contract exceeds $25,000, as per Chapter 149, Section 29. Similar to mechanic’s lien rights, bond rights cannot be waived in advance.

Unlike mechanic’s lien waivers, there’s no statutory form for bond releases. These are typically written as general or limited releases and may include specific bond references. Any agreement to waive bond claims must occur after the right has accrued and must include consideration.

Special Release Considerations

When reviewing any release document, it’s important to:

• Check the scope carefully

• Avoid unintentionally waiving additional rights beyond the mechanics lien or bond rights

• Ensure that consideration has been received (e.g., the check has cleared)

• Understand that statutory forms offer a safe harbor but are not mandatory

Some releases may look like the statutory form but include extra language that expands the scope of the waiver. It’s essential to read the entire document and remove unnecessary or overreaching provisions.

Release Checklist: RTFC (Read the Full Contract)

One of the key takeaways emphasized during the webinar was the importance of RTFC—Read the Full Contract. Before signing any release:

• Read the entire document (not just the title)

• Confirm it’s written in plain English you understand

• Check if it’s a general or limited release

• Identify what claims or rights you’re giving up

• Make sure you’ve received (or are receiving) payment—don’t release rights before the check clears

• Look for hidden language that could waive more rights than you intended

• Confirm that all parties are correctly named (you can verify business names via the Secretary of State’s website)

• If using the Massachusetts statutory form, fill in all relevant sections—especially any disputes or pending items

A release should be clear, enforceable, and based on mutual understanding. If any of these elements are missing, it’s worth revisiting before signing.

Proper Procedures for Exchanging a Release for a Check

Timing is everything. The golden rule: Never give up your rights before you get paid. A few best practices:

• Don’t email or send a signed release until the check is physically in hand, or funds have cleared.

• If sending a release in advance, use conditional language:
  Example: “This release is conditioned upon receipt of full payment of $XX.00.”

• Whenever possible, exchange the release for the check-in person or ensure it’s part of a secure and documented transaction.

For added protection, consult legal counsel or leverage SunRay Construction Solutions to help manage the process and avoid costly mistakes.

Final Thoughts

Releases may seem like routine paperwork, but they carry significant legal weight. Understanding how they work—and what to look out for—can protect your rights, your business, and your bottom line.

Common Questions Contractors Ask

1. Can I file a Massachusetts mechanic’s lien if I’m unlicensed?

Yes. A license is not required to file a mechanic’s lien in Massachusetts. You don’t need to be a licensed contractor, a registered business, or even incorporated. The lien is simply your legal right to claim payment for work performed or materials supplied.

However, if the type of work you’re performing requires a license (e.g., electrical, plumbing, structural), you may face enforcement issues later. Performing such work without proper permits can violate the building code and potentially result in a material breach of contract. But when in doubt, it’s best to go ahead and file the lien to preserve your rights—you can deal with enforcement complications later if needed.

2. Do I need to mail the recorded statement of account to the property owner?

No. The only lien-related document that must be sent to the property owner is the Notice of Contract, and only if you are not the general contractor. This applies to subcontractors, sub-subcontractors, suppliers, and vendors.

You must be able to prove that the owner received this Notice of Contract. Its purpose is to inform the owner that someone else (not the GC) is asserting lien rights. You do not need to send the Statement of Account to the owner. That document is filed with the Registry of Deeds but does not require notification to the property owner.

3. Can I include attorney’s fees and filing costs in my mechanic’s lien amount?

Generally, no. The amount of your mechanic’s lien can only include the value of labor and materials provided, plus interest. Attorney’s fees and costs cannot be included unless:

• You are the general contractor, and

• Your contract with the owner specifically states that you are entitled to recover legal fees.

For subcontractors or suppliers, attorney’s fees may be recoverable only if your contract with the party you contracted with (usually the GC) includes that right—but they still cannot be added to the lien amount itself.

Instead, those fees may be part of a separate legal claim if you decide to file a lawsuit to enforce your lien. In that lawsuit, you could pursue attorney’s fees from the GC (or whoever you contracted with), but not from the property owner via the lien.