Texas Lien Waiver Overview
Texas Lien Waiver Rules
- Rules At A Glance
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Specific Forms Are Required
Texas sets out required lien waiver forms by statute. In order to be valid, a Texas lien waiver must follow those forms.
Texas lien waivers are required to be notarized in order to be valid.
Cannot Waive Rights in Contract
While not explicitly clear, it appears that, because of the requirement for “evidence of payment to the claimant exits” for a conditional waiver, and actual receipt for an unconditional release, advance lien waivers are unenforceable.
Cannot Waive Rights Before Payment
In Texas, lien rights may not be waived unless the claimant actually received payment in good and sufficient funds in full for the lien claim.
Lien waivers are documents commonly exchanged among parties in the construction industry. Typically, the party making a payment will require the party receiving payment to sign and execute a lien waiver.
Lien waivers act as a receipt for funds for the receiving party, and specify that the party waives their mechanics lien rights in the project related to payment.
Texas has strict and specific requirements related to lien waivers. Not only is Texas one of the 12 states that provide statutory lien waiver forms, but it is also just one of three states that require lien waivers to be notarized. Failure to use these forms, using the wrong form, or attempts to modify the waiver language will result in the lien waiver being invalid and unenforceable. As will failing to get the lien waiver notarized. Note, however, that a Texas lien waiver can be notarized outside of Texas, by a notary in a different state. This makes it easier for parties performing work in Texas, but not based out of that state, to comply with the specific requirements of Texas lien waiver law.
Providing standardized lien waiver templates by statute is an attempt to level the playing field and simplify the waiver exchange process. In states that do not provide statutory forms, there is an inherent risk of abuse. Many higher tier parties will include additional language that waives more contract and mechanics lien rights than originally anticipated. Parties can be surprised by what rights they ended up waiving when the language of the lien waiver is not regulated.
But mistakes can still be made, which is why it’s so important to understand Texas’ lien waiver requirements.
Here are guides to the four Texas statutory lien waivers: