Whether you’re a general contractor (GC), subcontractor, or property owner, understanding South Carolina lien waivers is crucial. These essential documents function as receipts acknowledging payment up to a specific amount, thereby waiving the party’s right to file a lien against the property for that amount. While the concept is straightforward, the practical application of lien waivers can be complex.
Several types of lien waivers exist, each requiring submission at specific times during a project. (For a deeper dive into lien waiver basics, refer to The Ultimate Guide to Construction Lien Waivers for Subcontractors.) Moreover, lien waiver requirements vary by state, with each jurisdiction setting its own rules regarding valid forms, contents, and enforcement.
Understanding these nuanced requirements is important for subcontractors to maintain compliance, prevent payment disputes, and protect their financial interests. So grab your hard hat, and let’s dive into the world of South Carolina lien waivers!
(For more general information on lien waivers, check out this on-demand webinar: End the Whack-a-Mole: Lien Waiver Best Practice for Subs.)
Just like in 38 other states, South Carolina lien waivers are largely unregulated, leading to potential complications on the job. Thankfully, the state puts several guardrails in place to streamline processes, uphold legality around construction liens, and offer GCs, subs, and suppliers the right to fair payment for their work.
Lien waivers in South Carolina aren’t governed by a statutory form. Parties can draft their own lien waivers, customizing fields and content to meet their needs. The contract is a different story: any agreement that tries to waive lien rights is “against public policy and unenforceable” in South Carolina, unless payment “substantially equal to the amount waived is actually made.” This means lien rights cannot be waived before work begins. (Regardless, you should still review the contract in full before work begins, removing any clauses that seem off.)
Here’s what you need to know when handling South Carolina lien waivers:
- Since lien rights can only be waived to the extent of payment granted, construction teams can exchange conditional lien waivers or unconditional lien waivers—as long as you don’t sign on the dotted line until that payment comes through.
- The state spells out several legal courses in case things go wrong on the job. If GCs don’t pay lower-tier contractors or make false claims about full payment, they could be convicted of a misdemeanor and subject to fines or even jail time. Arbitration is emphasized as a right for all parties entering into a contractual agreement.
South Carolina doesn’t mandate any specific or statutory form.
Both conditional and unconditional lien waivers are accepted in South Carolina, as long as lien rights are waived after payment.
Both conditional and unconditional lien waivers are accepted in South Carolina, as long as lien rights are waived after payment.
To be considered valid in South Carolina, a lien waiver must:
- be in writing
- be signed by the waiving party
- clearly state the amount being waived and the property to which it applies
- be exchanged pursuant to or following payment
Since lien rights cannot be waived before payment in South Carolina, parties cannot include lien waiver provisions in the contract.
Any lien waiver that attempts to nullify rights before payment is “against public policy and unenforceable” in South Carolina.
Completing Lien Waivers in Siteline
- Create, monitor, and track all your lien waivers in one place.
- Automatically fill out and send the right waiver at the right time.
- Request lower-tier lien waivers from all your sub-tier contractors, vendors, and suppliers—individually or in bulk.
- Securely collect e-signatures, with automatic reminders for any unsigned waivers.
- Package and submit signed waivers to your GCs directly within Siteline.
South Carolina lien waivers aren’t drafted using a specific statutory form. This means parties can create their own, so it’s important to review every section carefully alongside the overarching job contract to ensure compliance and follow general construction best practices.
Few requirements govern the validity of lien waivers in South Carolina. It’s up to you to make sure your lien waiver form checks all the boxes:
- It should clearly state the amount being waived and the property to which it applies,
- It must be exchanged pursuant to or following payment, and
- It must be signed by the party waiving their lien rights.
While South Carolina lien waivers are mostly unregulated, the state does dictate when lien waivers should be exchanged. In South Carolina, “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.”
This means lien rights cannot be waived in the contract or before payment. Lien waivers can either be conditional, exchanged with progress pay apps, or unconditional, binding upon signing. To comply with state law (and protect your paycheck), only exchange unconditional lien waivers after your payment comes through.
For more information on which lien waivers to use and when, check out this comprehensive guide.
As lien rights cannot be waived until payment is actually granted, lien waiver provisions cannot be added to the contract in South Carolina. This paves the way for fair payment to construction teams. (It’s still important to review the contract and amend any unsavory clauses, however.)
As a construction professional, you want to focus on the work at hand, not a dispute. But unfortunately, they do happen, and it’s best to be prepared.
Thankfully, South Carolina law provides helpful context regarding legal penalties and arbitration that construction teams can arm themselves with before a dispute arises. Let’s break it down:
- Section 29-7-10: GCs are instructed by law to pay all lower-tier contractors, like subs and suppliers, for their work performed and materials furnished.
- Section 29-7-20: If a GC is paid by the owner, yet fails to make payments to lower-tier contractors, they could be guilty of a misdemeanor. Conviction leads to fines of up to $1,000 and imprisonment. Additionally, this statute penalizes false assertions about full payment, which can lead to misdemeanor charges, fines upward of $5,000, and jail time for up to 60 days.
- Section 29-7-30: By entering into a legal contract with an owner or contractor, any GC or sub has the right to arbitration if things go awry.
While not iron-clad protections, these laws offer GCs, subs, and suppliers some guidelines for how they should be treated on the job and what to do if they are not compensated fairly. As in any dispute, review the contract and lien waiver form to make your case. If arbitration doesn’t resolve things, consider consulting with a construction law attorney who is familiar with South Carolina lien laws.
Before you can become a pro at South Carolina lien waivers, you need to start with the basics. We’ve rounded up a list of helpful resources to review:
- South Carolina Code of Laws, Title 29, Chapter 7 – Liens of Laborers and Others on Contract Price (covers mechanic’s liens, legal penalties, and arbitration)
- South Carolina Contractor’s Licensing Board
- South Carolina Bar Construction Law Section
- GCPay Lien Waiver Requirements for Every U.S. State
Automate the process with Siteline. Contractors use our lien waiver tool to digitize all of their lien waiver forms (primary and vendor), send waiver requests to lower-tier contractors and vendors, collect e-signatures, and submit completed waivers to their clients—without ever leaving the system. Siteline even provides centralized tracking to help contractors monitor vendor waiver statuses to see who’s received the form, who’s opened it, and who has (or hasn’t) signed. This means contractors can collect waivers faster while eliminating payment delays caused by compliance holds.
Disclaimer: The information provided on this page is for general informational purposes only and does not constitute legal advice. We recommend you consult a qualified attorney for advice specific to your situation.