• Under Maryland law, there is no public policy against an advance waiver of the right to file a Mechanic's Lien by the contractor in the construction contract with the owner.
• An owner or contractor cannot by any term of the prime contract, waive or impair the lien rights of others.
• Subcontractors and suppliers may not waive their lien rights on in construction contracts between the contractor and subcontractor.
• Further, a pay-if-paid clause does not waive lien rights.
• "Paid if Paid" is enforced if explicit.
• "Pay when Paid" suggests time for payment.
• Pay-when-paid clause in the subcontract or purchase order does not create a condition precedent to payment.

Retainage Provisions

Public

• Generally, when a contractor has furnished 100 percent payment and performance security, the maximum rate of retainage is 10 percent. When the project is 50 percent complete, the public body may retain no more than 5 percent, unless it is able to demonstrate a need to retain more. The public body is entitled to withhold any amount the unit believes necessary to protect the state's interest. MD. CODE ANN. STATE FIN. & PROC. § 17-110.  Contractors and subcontractors may withhold retainage only in the same percentage that has been withheld by the government. However, a contractor or subcontractor may withhold additional amounts if it determines that its subcontractor's or sub-subcontractor's performance provides reasonable grounds for withholding more. MD. CODE ANN. STATE FIN. & PROC. § 17-110.