South Carolina lien waiver: unenforceable unless the payment substantially equals what you waived
South Carolina's waiver rule is not in the mechanics lien chapter and it is not even the subject of its own section. It is a proviso stapled to the end of a criminal subsection about falsely certifying that everybody has been paid, and it sets a stricter test than most states.
In South Carolina an agreement to waive the right to file or claim a lien for labor and materials is against public policy and unenforceable unless payment substantially equal to the amount waived is actually made.
Read the law: S.C. Code Ann. section 29-7-20(2)scstatehouse.gov
S.C. Code Ann. 29-7-20(2), the provisoFill it in online Type your details in and download it already filled in.Provided, however, that an agreement to waive the right to file or claim a lien for labor and materials is against public policy and is unenforceable unless payment substantially equal to the amount waived is actually made.
Substantially equal to the amount waived. It is not enough that some payment arrived. A waiver for $30,000 taken against a $9,000 check does not meet that test, which is stricter in one direction than the rule in most states.
Download a blank South Carolina lien waiver
South Carolina 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 sentence the proviso is attached to
Section 29-7-20(2) is a criminal provision. A person who wilfully and intentionally certifies to an owner or a lending institution, by affidavit or otherwise, that everybody who furnished services, labor or materials has been paid in full, when they have not, is guilty of a misdemeanor punishable by a fine of up to five thousand dollars or up to sixty days, or both.
That is aimed at the general contractor who signs a final affidavit that is not true in order to collect the last draw. The waiver proviso then sits at the end of the same subsection, and it carves out services or materials for which lien rights have been waived in writing, provided the payment test is met.
So the two halves work together. The certification has to be true, and a waiver only counts toward making it true if the money behind it was substantially equal to what was given away.
The neighboring section is worth more than the waiver rule
Section 29-7-10 gives every laborer, subcontractor and materialman a first lien on the money the contractor received for that building, in proportion to the amount of their claims, and directs the contractor to pay them out of that money.
That is a claim aimed at the money rather than at the property. It does not depend on recording a lien against the land, it does not run on the same clock, and it survives situations where a lien against the real estate is no longer available.
If you are a South Carolina subcontractor who has been told the lien deadline has passed or that the owner already paid, chapter 29-7 is the chapter to read before you give up. Almost no lien waiver page mentions it.
South Carolina prints no notice form, and the one statement it does prescribe is easy to get wrong
Read the whole mechanics lien chapter, Title 29 Chapter 5, and there is no document in it you can fill in. Fifty one sections, and not one of them prints a block of wording with blanks in it. Every paper the chapter asks for is described by what it has to contain and then left to you to lay out. Florida, Texas, Iowa, Kansas and Maryland all print the words their notices have to carry. South Carolina prints two sentences, in one section, and they are not on any notice you send to anybody.
Those two sentences are the location notice in 29-5-23. A contractor who files a notice of project commencement has to post the name and address of the contractor at the job site, and a location notice as well, and the statute does not describe that one, it dictates it. The location notice must contain the following statement: The contractor on the project has filed a notice of project commencement at the county courthouse. Sub-subcontractors and suppliers to subcontractors shall comply with Section 29-5-20 when filing liens in connection with this project. That is the whole of the prescribed wording in the chapter.
It is worth reading that against whatever is actually on the board at your job. Beaufort County's register of deeds publishes a Contractors Notice of Project Commencement with the posting language printed at the foot of it, and the language on that form is a paraphrase. It reads Sub-contractors and suppliers of Sub-contractors where the statute reads Sub-subcontractors and suppliers to subcontractors, and it points the reader at the County Register of Deeds office where the statute says the county courthouse. The first of those is not a house style preference. A subcontractor and a sub-subcontractor are different people in this chapter and 29-5-20(B) caps only one of them. The statute says the location notice must contain the following statement, so a notice that reproduces the sentence cannot be argued with and a notice that improves on it can be.
The notice of project commencement itself is described rather than printed, and it is short. It shall contain the name and address of the person filing it, the name and address of the owner or developer, a general description of the improvement, and the location of the project. It goes to the clerk of court or register of deeds in the county where the real property sits, within fifteen days of the commencement of work, with a fifteen dollar filing fee. The clerk keeps a separate book and index of every one of them, which is what makes the point below checkable rather than a guess.
The notice of furnishing has no deadline, and whether you need it at all was settled before you arrived
The notice South Carolina suppliers ask about is the notice of furnishing labor or materials in 29-5-20(B), and the first surprising thing about it is that the chapter sets no date for it. It is not a preliminary notice that opens a right and then expires. It removes a cap. In no event shall the aggregate amount of any liens filed by a sub-subcontractor or supplier exceed the amount due by the contractor to the subcontractor to whom that claimant supplied labor, material or services, unless the claimant has provided notice of furnishing labor or materials by certified or registered mail to the contractor. After receiving such notice, no payment by the contractor to the subcontractor will lessen the amount recoverable by the person who gave it. So the protection starts on the day the notice lands and does nothing about the money that went out before it, which is the whole argument for sending it at the start of a job instead of when payment goes quiet. Individual laborers whose lien is less than two thousand dollars sit outside subsection (B) altogether.
Six things go in it. The name of the sub-subcontractor or supplier who claims payment. The name of the person with whom the claimant contracted or by whom he was employed. A description of the labor, services or materials furnished and the contract price or value of it, with materials specially fabricated by somebody other than the one giving notice stated separately. A description of the project sufficient for identification. The date when the first and the last item of labor, service or materials was actually furnished or scheduled to be furnished. And the amount claimed to be due, if any. On a bonded job that same list does double duty, because 29-5-440 says the written notice a remote claimant sends the bonded contractor must generally conform to the requirements of Section 29-5-20(B).
Then the part that catches people out. The cap you are sending the notice to escape does not exist on every project. 29-5-23 says the failure to file a notice of project commencement renders the provisions of Sections 29-5-20(B) and 29-5-60(B) inapplicable, and renders the payment bond notice in 29-5-440 and the public work notice sections inapplicable too, for a claim against a bond furnished by a contractor holding a direct agreement with the owner. If nothing was filed at the courthouse there is no entry in that separate book, no location notice on the board, and no subsection (B) to be capped by. Send the notice anyway, because a certified mailing is cheap and the index at the register of deeds is the only way to know, but it is worth knowing what it is buying.
None of it rescues the clocks. Under 29-5-90 the lien is dissolved unless, within ninety days after you cease to labor on or furnish labor or materials for the building or structure, you both serve the owner, or the person in possession if the owner cannot be found, and file a statement of a just and true account of the amount due, sworn to, with the register of deeds or clerk of court of that county. Under 29-5-120 it is dissolved again unless suit is commenced and a notice of pendency of the action is filed within six months of the same date. A payment bond claim runs on its own clock: ninety days from the last day of furnishing to give written notice by certified or registered mail to the bonded contractor, and one year from that date to sue. And since 2009, 29-5-15 makes a contractor who is required to be licensed or registered record that number on the lien document when it is filed, with a frivolous lien carrying a fine of up to five thousand dollars, the loss of the license or registration, or both.
What to put on the form
The amount, above everything else. South Carolina measures the waiver against the payment actually made, so a form with no figure on its face has nothing to be measured against.
The through date on a progress waiver, so the release stops where the payment stops.
Every open item in the exceptions box. Retainage in particular, because a final waiver that does not except retainage is a waiver for an amount larger than the payment that came with it.
Which of the four to sign on a South Carolina 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 enforceable in South Carolina?
No. S.C. Code Ann. 29-7-20(2) says an agreement to waive the right to file or claim a lien for labor and materials is against public policy and unenforceable unless payment substantially equal to the amount waived is actually made.
What does substantially equal mean in the South Carolina statute?
The statute does not define it, but the comparison it sets up is between the payment actually made and the amount waived. A partial payment far below the waived figure does not meet the test, which is why the payment amount belongs on the face of every waiver you sign.
Where is South Carolina's lien waiver rule?
In chapter 29-7, Liens of Laborers and Others on Contract Price, not in the mechanics lien chapter at 29-5. It is a proviso at the end of section 29-7-20(2), a criminal subsection about falsely certifying that everyone has been paid.
My South Carolina lien deadline passed. Is there anything left?
Look at S.C. Code Ann. 29-7-10. It gives laborers, subcontractors and materialmen a first lien on the money the contractor received for that building, in proportion to their claims, which is a claim against the money rather than against the property. This is not legal advice and it is worth putting in front of an attorney.
Is there an official South Carolina notice to owner form?
No. Title 29 Chapter 5 prints no form and prescribes no wording for any notice a claimant sends. 29-5-20(B) lists six things the notice of furnishing labor or materials has to include and leaves the layout to you, and 29-5-40 asks only that the owner be notified in writing of the furnishing and of the amount or value of it. The single block of prescribed wording in the chapter is the location notice a contractor posts at the job site under 29-5-23.
What has to be in a South Carolina notice of furnishing labor or materials?
Six items under 29-5-20(B). The name of the sub-subcontractor or supplier who claims payment. The name of the person the claimant contracted with or was employed by. A description of the labor, services or materials and the contract price or value, with specially fabricated materials made by someone other than the one giving notice stated separately. A description of the project sufficient for identification. The date the first and the last item was actually furnished or scheduled to be furnished. And the amount claimed to be due, if any. It goes to the contractor by certified or registered mail.
When is the South Carolina notice of furnishing due?
The chapter sets no deadline for it, which is unusual. What it sets is an effect: after the contractor receives the notice, no payment by the contractor to the subcontractor lessens the amount you can recover. Nothing reaches back to the payments made before it arrived, so the notice is worth sending at the start of the job rather than when the money slows down.
What does the location notice on a South Carolina job site have to say?
29-5-23 says the location notice must contain the following statement: The contractor on the project has filed a notice of project commencement at the county courthouse. Sub-subcontractors and suppliers to subcontractors shall comply with Section 29-5-20 when filing liens in connection with this project. Some county forms print a paraphrase of that sentence. For the contractor doing the posting, the statute's own words are the safe choice.
What are the South Carolina mechanics lien deadlines?
Ninety days from the day you cease to labor on or furnish materials for the building, to both serve the owner and file the sworn statement with the register of deeds or clerk of court under 29-5-90, and six months from that same day to commence suit and file a notice of pendency under 29-5-120. A claim on a payment bond runs separately: ninety days from last furnishing to notify the bonded contractor in writing under 29-5-440, and one year from last furnishing to sue.
Does it matter whether the contractor filed a notice of project commencement?
It decides whether the cap in 29-5-20(B) applies to you at all. 29-5-23 says the failure to file a notice of project commencement renders the provisions of Sections 29-5-20(B) and 29-5-60(B) inapplicable, along with the payment bond notice in 29-5-440 for a bond furnished by a contractor holding a direct agreement with the owner. The clerk of court or register of deeds keeps a separate book and index of these filings, so it can be checked rather than assumed.
Working in another state? The general lien waiver forms page covers all four waiver types, lien waiver laws by state is every state in two tables with the section that governs each one, and conditional vs unconditional lien waiver explains which of the two to sign and when.
This page quotes S.C. Code Ann. section 29-7-20(2) 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.