A waiver of lien could indicate which of the following?

A waiver of lien typically indicates that a contractor or subcontractor has received payment for their work completed on a project and is relinquishing their right to place a lien on the property for the amount paid. This legal document is often required to assure property owners or general contractors that there are no outstanding debt claims for the services rendered or materials supplied. By signing a waiver, the contractor confirms that they have been compensated for the specific work associated with that waiver, thus preventing them from later asserting a claim against the property for non-payment.

In the context of the other options:

• An unpaid labor bill would not lead to a waiver; instead, one would usually expect the possibility of a lien.

• A material bill being due similarly would not result in a waiver, as it indicates that payment has not been received, which would negate the intention behind a lien waiver.

• The statement that a lien is effective contradicts the nature of a waiver, as a waiver signifies that the right to a lien is being removed due to receipt of payment.

Therefore, the correct indication of a waiver of lien being associated with a labor bill being paid is aligned with its purpose in construction and contracting law.