What is a lien waiver?

A lien waiver is indeed a document that relinquishes a party's right to file a lien against a property. This is an important aspect of construction and contracting because it protects property owners from claims by subcontractors, suppliers, or laborers who may have provided services or materials for a project but have not been paid.

When a lien waiver is signed, it typically shows that the party waiving their lien rights has received payment for their work or materials. This helps ensure that the property remains free from liens, which can complicate or hinder future transactions like selling the property or refinancing.

In contrast, the other options refer to different concepts within construction and finance. A type of construction contract describes the agreements governing the terms of work, while a financial tool for managing debts refers to instruments or methods employed to handle financial obligations. A permit required for construction projects pertains to the legal authorizations needed from local authorities to begin construction, separate from the financial and lien aspects of the work.