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Can you please educate me on partial payments and lien waivers/releases?

TexasLien Releases

I believe there is a need for a partial lien release in one of our active jobs. They already paid for $110k of the $150k that is due, but now they have become unresponsive. Can you please educate me on partial payments and lien waivers/releases?

2 replies

Aug 11, 2021

Generally, there's no need to go ahead and partially release a filed mechanics lien simply because you've received partial payment. Levelset discusses that idea in great depth here, and breaks it down better than I could in this Q&A: After Partial Payment, What Should You Do With Your Mechanics Lien? 

Note that Texas does have its own specific rules on liens and partial payment, though. Under Texas Property Code § 53-152, a customer can request that the lien claimant release the portion of their lien that's been paid (whether that's in whole or in part). And, if a customer makes partial payment on a filed lien and then requests a release for that portion of the lien, the lien claimant is supposed to provide that customer with an associated release (partial or full, as applicable) within 10 days. 

The statute doesn't require that the lien claimant record the lien release themselves, interestingly enough. Rather, it simply requires that the lien claimant provide the written & signed release to the customer in a format that could be recorded - so the customer can record it themselves. Practically, though, it's common for a lien claimant to record their own partial or full release.

Bottom Line

Going off of the Texas Property Code - a partially paid TX mechanics lien doesn't have to be partially released unless the claimant requests a release for the part that's been paid. If that request is made, the associated release should be given within 10 days of receiving the request. However, if the customer has made partial payment but did not request a partial release, a partial release is not statutorily required.

Importantly, the statute only requires that the claimant provide the release to the party requesting it in a format that can be recorded - and the claimant doesn't necessarily need to record the release themselves. It's pretty common for a claimant to record it themselves, though.

If a customer has gone silent, offering to partially release the lien as a show of good faith could help to reengage them in settlement discussions. Or, taking an alternative route and threatening to enforce (with a Notice of Intent to Foreclose) could also work. Levelset discusses some options here: The 4 Steps to Take After Filing a Mechanics Lien. Note also that consulting with a TX construction lawyer about how best to negotiate & proceed would be extremely useful, too. Levelset offers Legal Guard for easy & affordable access to TX construction lawyers, plus we've got a directory of Texas construction attorneys here: Top Texas Construction Lawyers.

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Aug 13, 2021
In direct response to your question any education on partial payment lien waivers/release is of dubious values until and unless you first address the below issues absent from what you have provided in your question
You will need to provide more details than the facts above to obtain a comprehensive response to your question and anything other than a comprehensive response has dubious value to you
 
1. It is unclear whether you have filed a lien
And
 
2. If you DID file a lien it is unclear whether you filed it timely and in adherence to all the statutory requirements to affect a valid lien
And
 
3. The only way you are going to be able to satisfy 2 is to provide detailed information in written form of the services that are supposed to be covered in the lien and the lien affidavit itself.
 
You really need----badly --since there are very serious and strict deadlines in the requirements to file affect a valid lien -----to get with our office and provide the information . That is assuming you consider your missing and late payment of $40,000.00 n is of some significant value to you. This and Mother nature is something you should not fool around with.
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