Minnesota lien waiver: void before payment, with a five percent retainage cap in the same section
Minnesota puts four separate protections in one section, and the lien waiver rule is only the second of them. The same section caps retainage at five percent, puts a sixty day clock on releasing it, and voids the choice of law clause that would have moved the fight to another state.
A provision in or executed in connection with a Minnesota building and construction contract requiring a contractor, subcontractor or material supplier to waive the right to a mechanics lien or to a payment bond claim before being paid for the labor or materials furnished is void and unenforceable.
Read the law: Minn. Stat. section 337.10codes.findlaw.com
Minn. Stat. 337.10 subd. 2, word for wordFill it in online Type your details in and download it already filled in.Provisions contained in, or executed in connection with, a building and construction contract requiring a contractor, subcontractor, or material supplier to waive the right to a mechanics lien or to a claim against a payment bond before the person has been paid for the labor or materials or both that the person furnished are void and unenforceable.
Executed in connection with is the phrase doing the work. It reaches the standalone waiver form handed over at a draw, not only the clause buried in the subcontract.
Download a blank Minnesota lien waiver
Minnesota prescribes no statutory wording, so this is the general conditional waiver on progress payment, the form that fits most draws. Print it and fill it in by hand, or use the builder below and get it back already filled in.
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The retainage cap, which belongs on the same page
Subdivision 4 caps retainage on a Minnesota building and construction contract at five percent, and requires it to be released within sixty days after substantial completion.
That is a number you can check against your own contract in about a minute, and it is checked far less often than it should be. Ten percent retainage is so common on construction paperwork that a Minnesota contractor signing a ten percent clause usually does not look twice at it.
Run your own figures through the retainage calculator on this site and compare the result against the five percent the statute allows. If the gap is real, that is a conversation to have before the next draw rather than at closeout.
Ten days to pay, then interest
Subdivision 3 is the prompt payment rule. It runs a ten day clock and carries interest at one and a half percent per month, with a ten dollar minimum penalty on balances of one hundred dollars or more.
One and a half percent per month is eighteen percent a year. On a slow paying job that is not a rounding error, and it accrues whether or not anybody mentions it in the emails.
The clause that would have moved the fight out of state
Subdivision 1 voids a provision making a Minnesota building and construction contract subject to the laws of another state, and a provision requiring litigation, arbitration or other dispute resolution to happen in another state.
That matters when the general contractor is headquartered elsewhere and the subcontract carries its home state's forum clause. On a Minnesota project, that clause is void, and the fight stays where the work was.
One correction to what you may have read elsewhere
Some summaries add a qualifier to the Minnesota rule, saying the waiver is void except as against a third party who relied on it to their detriment. No such qualifier appears in the text of subdivision 2.
The statute as written is unqualified. If a reliance limit exists in Minnesota it comes from case law rather than from this section, and it is not something to rely on from a summary. Read the section, and take a real question to an attorney.
Minnesota voids a waiver signed before payment, but a waiver only matters if there was a lien behind it. If you are not under direct contract with the owner, Minn. Stat. 514.011 subdivision 2 makes a written pre-lien notice a necessary prerequisite to the validity of any claim or lien, and gives you 45 days from the first day you furnished labor, skill or materials to get it to the owner. Fill that one in here before you worry about the waiver.
Running a Minnesota job as the contractor who signed with the owner? Collecting waivers is the easy half. Minn. Stat. 514.011 subdivision 1 puts the contractor pre-lien notice inside your written contract, and says a person who fails to provide the notice shall not have the lien and remedy provided by this chapter. The good faith escape that softens the subcontractor notice is in subdivision 2(b) and says this subdivision, so it does not reach you.
Which of the four to sign on a Minnesota job
The statute protects you from a waiver signed before the work or before the payment. It does not protect you from one worded too broadly, or handed over against a check that later bounces, so the conditional form is still the right default.
Questions people ask
Is a lien waiver signed before payment valid in Minnesota?
No. Minn. Stat. 337.10 subd. 2 makes provisions in, or executed in connection with, a building and construction contract that require a waiver of mechanics lien or payment bond rights before payment void and unenforceable.
How much retainage can be held in Minnesota?
Five percent. Minn. Stat. 337.10 subd. 4 caps retainage on a building and construction contract at five percent and requires release within sixty days after substantial completion.
What is the late payment interest rate in Minnesota construction?
One and a half percent per month under Minn. Stat. 337.10 subd. 3, which is eighteen percent a year, with a ten dollar minimum penalty on balances of one hundred dollars or more, after a ten day clock.
Can my subcontract put a Minnesota dispute in another state?
No. Minn. Stat. 337.10 subd. 1 voids a provision making the contract subject to another state's law and a provision requiring litigation, arbitration or other dispute resolution to take place in another state.
Check your retainage against the Minnesota five percent cap
Working in another state? The general lien waiver forms page covers all four waiver types, and conditional vs unconditional lien waiver explains which of the two to sign and when.
This page quotes Minn. Stat. section 337.10 and explains what it says. It is not legal advice, and a statute can be amended. Read the linked section before you rely on it.