North Dakota lien waiver: the statute says the waiver ends the lien
Most states that have nothing to say about lien waivers say nothing at all. North Dakota is not one of them. Chapter 35-27 contains exactly one sentence with the word waiver in it, and that sentence is on the owner's side: if the owner has received a valid waiver of lien signed by the person who improved the property, a lien is not allowed. There is no condition attached, no requirement that the money arrived first, and no second sentence taking it back.
NDCC 35-27-02(3) says that if the owner, trustee or agent of the owner has received a valid waiver of lien signed by the person that improves the real estate, a lien is not allowed. Nothing in chapter 35-27 makes the waiver depend on payment, prescribes wording, requires notarization or voids an advance waiver. The only word doing any work in that sentence is valid, and validity here is ordinary contract validity.
Read the law: North Dakota Century Code section 35-27-02ndlegis.gov
NDCC 35-27-02(3), the only waiver sentence in the chapterFill it in online Type your details in and download it already filled in.If the owner, trustee, or agent of the owner has received a valid waiver of lien, signed by the person that improves the real estate, a lien is not allowed.
Read what is missing. Not a lien is reduced, not a lien is not allowed to the extent of the payment received, and not unless the waiver was given before payment. The lien is not allowed. In a state whose legislature wrote that sentence deliberately, the page of paper you sign is the whole of the question.
Download a blank North Dakota lien waiver
North Dakota prescribes no statutory waiver wording, so this is the general conditional waiver on progress payment, the form that fits most draws. Fill in the amount and the through date rather than leaving them blank, because 35-27-02(3) enforces the waiver the owner is holding and no section will narrow it for you. Print it and fill it in by hand, or use the builder below and get it back already filled in.
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One waiver sentence in twenty nine sections, and it favors the owner
Chapter 35-27 is the whole of North Dakota construction lien law, from the definitions at 35-27-01 to the general provisions at 35-27-28. Run the word waive across every sentence in it and you get a single hit, subsection 3 of the very first operative section. There is no companion rule saying an advance waiver is void as against public policy, none saying a waiver must be exchanged for payment, and none prescribing the wording of the document.
That puts North Dakota in a small group with Nebraska, and it is a materially different position from the states that are merely silent. In Ohio or Iowa you sign a waiver and it is enforced because nothing stops it. In North Dakota you sign a waiver and it is enforced because the legislature wrote down that it should be. An argument that the release was unfair, or premature, or given for a check that never cleared, is arguing against the text of 35-27-02 itself.
The word valid is the only opening, and it is narrower than it looks. It means the waiver has to be a real signed document from the person who did the work, not that it has to be paid for. Fraud, forgery and the ordinary contract defenses are still there. Nothing in the chapter turns a valid unconditional waiver into a conditional one because the money went missing afterwards.
The cap that catches subcontractors before the waiver ever does
Subsection 2 of the same section is the one that surprises people. The amount of the lien is limited to the difference between the price paid by the owner, trustee or agent and the price or value of the contribution. If the owner has paid the full price or value of the contribution, no lien is allowed.
That is an unpaid balance rule, and it means a North Dakota subcontractor's lien is measured against what the owner still owes, not against what the general owes you. An owner who has paid his contractor in full has extinguished the lien of every unpaid sub beneath him, without anybody signing anything. The general who took the money and did not pass it on is still liable to you on the contract, but the property is out of reach.
35-27-09 is the machinery the owner uses to work out what to hold back. He may withhold from his contractor so much of the contract price as may be necessary to meet the demands of everybody else with a lien on the premises, pay those liens directly and deduct the cost. Within fifteen days after completion he may require any lien claimant, by written request, to furnish an itemized and verified account of the claim, the amount and the claimant's name and address. So the owner is actively collecting positions, and your waiver is one of the pieces of paper he collects.
The notice nobody remembers and the demand that kills a lien in thirty days
Before recording anything, look at 35-27-02(4). Written notice that a lien will be claimed must be given to the legal or equitable owner of the real estate by certified mail at least ten days before the recording of the construction lien. Certified mail, ten days, before recording. That subsection also gives anyone extending credit on a job the right, on demand, to secure the legal description of the property and the name of the legal or equitable owner, which is how you find out who the notice has to go to.
Then record within ninety days after all your contribution is done, under 35-27-13, stating the amount due, the dates of the first and last contribution and the party you contracted with. North Dakota is gentler than most about that deadline. 35-27-14 says failure to file within ninety days does not defeat the lien, except as against good faith purchasers and encumbrancers for value whose rights accrued before filing, and as against the owner to the extent of the amount paid to a contractor before the recording. In other words the late lien survives but shrinks by everything the owner paid out while you were quiet, and no lien may be filed more than three years after the first item of material is furnished.
The enforcement clock is the one to watch. 35-27-25 gives you three years from the date of recording to commence an action and record a lis pendens, but the owner can collapse that. Upon written demand delivered to the lienor and filed with the county recorder, suit must be commenced and the lis pendens recorded within thirty days of delivery or the lien is forfeited. The section says the thirty days apply regardless of the method of delivery and no extra time is allowed for it, and the demand itself has to warn you of the forfeiture.
What to do about it on a North Dakota job
Sign conditional, never unconditional, until the money has cleared your bank. This matters more in North Dakota than in a state that is merely silent, because here the owner can point at 35-27-02(3) and read it aloud. A conditional waiver that takes effect when the payment clears is a different document from one that takes effect on signature, and the difference is the whole of your position.
Put the amount and the through date on every one. The chapter prescribes no wording, so nothing in it will narrow a waiver that does not narrow itself, and a release with a blank date is a release of everything.
Watch the balance, not just the paperwork. Because the lien is capped at what the owner has not yet paid, the practical question on a North Dakota job is how far ahead of you the payments are running. Get the ten day certified mail notice out to the owner early rather than at the last minute, because the notice is what stops him paying the general in full without knowing you exist. Then record within ninety days, and if a written demand to commence suit ever lands, treat it as a thirty day deadline with no extensions in it.
Which of the four to sign on a North Dakota job
North Dakota is one of the few states whose statute affirmatively enforces the waiver, so the form is not just your best protection, it is your only one. A conditional waiver ties the release to the payment clearing. An unconditional one hands the owner exactly the document 35-27-02(3) is talking about.
Questions people ask
Is a North Dakota lien waiver signed before payment valid?
Yes, and the statute says so directly. NDCC 35-27-02(3) provides that if the owner, trustee or agent of the owner has received a valid waiver of lien signed by the person that improves the real estate, a lien is not allowed. Nothing in chapter 35-27 conditions that on the payment having been received, so an unconditional waiver does what it says on the day you sign it.
Does North Dakota have a statutory lien waiver form?
No. Chapter 35-27 requires no particular wording, no notarization and no service of the waiver on anybody. That is why the builder on this page produces the general conditional waiver rather than a state form. Since no section will read a limit into a waiver, the limits have to be written into the document itself.
Can a North Dakota subcontractor lien for more than the owner still owes?
No. Under 35-27-02(2) the amount of the lien is limited to the difference between the price paid by the owner, trustee or agent and the price or value of the contribution, and if the owner has paid the full price or value of the contribution no lien is allowed. An owner who has already paid his contractor in full has extinguished the lien even though you were never paid.
How long do I have to file a North Dakota construction lien?
Record within ninety days after all your contribution is done, under 35-27-13, after giving the owner written notice by certified mail at least ten days before recording. A late filing is not fatal under 35-27-14, but it loses out to good faith purchasers and encumbrancers and to the owner to the extent he paid the contractor before recording, and no lien may be filed more than three years after the first item of material is furnished.
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 North Dakota Century Code section 35-27-02 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.