If you’re a contractor, service provider, or supplier who has filed a lien, it’s important to create and file a Lien Release once you’ve been paid.
Some states have lien release laws requiring you to release a lien once the claim has been satisfied. In these states, failing to release a lien by a certain deadline can result in financial penalties.
The deadlines and penalties regarding Lien Releases vary depending on the state.
Besides fulfilling legal obligations and avoiding penalties, filing a lien release after payment is the right thing to do. Failing to release the lien is unfair to the property owner.
A lien is an encumbrance on a property title. So, if the property owner wants to sell or refinance their property, they will encounter issues if the settled lien hasn’t been properly lifted with a Lien Release. The owner may even be unable to sell the property until the lien is released.
Doing so promptly shows you respect and value the property owner’s interests.