Contractor asking sub to sign unconditional lien before partial payment is that legal

2 weeks ago

I am a subcontractor and having trouble receiving payment from contractor he won’t release payment unless i sign a unconditional lien and he only wants to pay half of what he owes until he inspects work but send pics already of work completion we live in Texas is that legal?

Additional info about this contractor
Project Role: Subcontractor
Project Type: Commercial
Owner The Storrs Law Firm
16 reviews

Generally, the law prohibits requiring you to sign an unconditional waiver if you haven’t been paid the consideration shown in the waiver. You should ask the GC to use a conditional waiver form. Also, it is problematical to release a lien for partial payment, since you are being asked to waive your rights through a particular date. If the GC won’t use a conditional waiver form, you should consult an attorney to ensure that your rights are protected.

Disclaimer: This forum is not a secure form of communication. Use of this forum to contact Richard J. Storrs or the Storrs Law Firm does not create an attorney-client relationship. No attorney client relationship exists with Richard J. Storrs or the Storrs Law Firm in the absence of a signed engagement letter. By use of this forum, you acknowledge that we may review any information transmitted and that this review does not preclude Richard J. Storrs or the Storrs Law Firm from representing another client directly adverse to you, even in a matter where that information could and will be used against you. The content of this response is provided for general information and does not constitute legal advice. Legal advice must be based on our complete understanding of the facts and circumstances of your particular issue, and you should seek the assistance of licensed and competent legal counsel for specific legal advice. Because case results depend on a variety of factors unique to each case, case results do not guarantee or predict a result in any future case. Richard Storrs is admitted to practice in the State of Georgia, and is not licensed in other states. Thank you.
Attorney The Cromeens Law Firm

Hello,

Great question. Do not sign an unconditional lien waiver until after you have received payment. You can sign a conditional lien waiver for the 50% the contractor is going to pay, or sign the unconditional lien waiver for whatever amount you receive after the payment clears. You would only be releasing your right to lien for the 50% you have paid. However, the contractor cannot withhold payment until you sign the unconditional waiver or any amount. This could result in you never receiving payment if you sign the unconditional waiver first. You should still preserve your lien rights and file your lien while working out either payment or a settlement. Upon full payment of the lien, the law requires you to release your lien within 10 days so the contractor will ultimately get the release he desires.

Thanks,

Kelly Stamy
Associate Attorney

Tel: (713) 715-7334
http://www.TheCromeensLawFirm.com

Privileged Attorney-Client Communication and/or Attorney Work Product:
The above message and attachments, if any, are confidential and may be protected by the attorney/client privilege and/or attorney work product. The unauthorized disclosure, use, dissemination, or copying of this e-mail, or any information it contains, by anyone other than the intended recipient, is prohibited. If you are not the named recipient or have otherwise received this communication in error, delete it immediately and notify the sender at the office number listed above or by return email.

Your answer or comment:
Are you a Registered Expert?
You are not logged in and will be posting
anonymously. Log in Now
Get answers from construction attorneys and payment experts
120 Character Limit