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Can a General Contractor Force a Subcontractor to Pay All Suppliers Prior to Receiving Payment?

TexasLien Waivers

I am a General Contractor trying to collect the appropriate liens from a Subcontractor prior to sending payment. The subcontractors are submitting a Conditional Lien Wavier. We typically have subcontractors submit their Sub-tier Subcontractors / Suppliers Unconditional Lien Waivers prior to us sending them the check. Is that enforceable in the State of Texas? Can we require our subcontractors to pay, and gather all their Unconditional Waivers prior to receiving a check from the GC? The only other option I can see is having the Sub-Tier Subcontractors/ Suppliers submit conditional waivers?

1 reply

Jan 7, 2022

The legal analysis would start with a review of your subcontract, and then extend to any communications you have had with the subcontractor concerning lien waivers. (I assume that you are referring to lien waivers and not liens.)

You should review the Texas Property Code lien waiver forms starting with Section 53.281, and which you can review at the following web link:

https://statutes.capitol.texas.gov/Docs/PR/htm/PR.53.htm

Retain a construction attorney to evaluate your legal situation and to provide advice.

Good luck.

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