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contractor wont send notarized unconditional lien release

TexasLien Releases
Anonymous Property Owner

my contractor was paid in full, and i requested an unconditional waiver of lien. i sent the form to them and asked that they have it notarized. they returned it to me, but didn't have it notarized, and it was rejected by the city because of that. the contractor is refusing to have the form notarized. what's my recourse?

1 reply

Matt Viator
Construction Lawyer
Levelset Admin at Levelset
| 1,003 reviews
Mar 3, 2020
Texas is one of the few states which requires notarized lien waivers. So, if a lien waiver is submitted, but not notarized - then that waiver generally won't be effective to waive lien rights. Further, the state also has a number of statutory lien waiver forms that the parties must use if a lien waiver will be exchanged. And finally - most contractors should have no problem providing lien waivers once they've been paid in full. It's just like providing a receipt, and honestly, it should be an expected part of the payment process. However, the Texas Property Code doesn't state that a contractor must provide a mechanics lien waiver upon receiving full payment. And, often, an owner will require their contractor to provide a lien waiver at the time payment is made. But, if the owner no longer has the leverage to force their contractor to provide a lien waiver, or if the contract between the parties doesn't specifically require that a waiver be provided, then an owner may be facing an uphill battle in forcing their contractor to provide a notarized lien waiver. Making things easy on the contractor might help to convince them to provide a notarized lien waiver, though. If you know a notary, offering to bring them with you to the contractor's office or their current job site might make things easy enough to where the contractor won't refuse. Or, simply offering to pay for the notarization could help too.

Is it important to collect a lien waiver from the direct contractor?

That may sound like a dumb question, but it isn't. If you and the contractor both know they've been paid in full, and if you've got the documentation to prove it (like pay stubs, check info, etc.), then there's little doubt: that contractor can't file a mechanics lien, and if they do, it can be easily shot down. Where lien waivers really become crucial is when they're being collected by parties down the chain. So, having lien waivers in hand for any and all subs and suppliers is crucial since the owner can't really verify that they were paid in full, as required.

Disbursement statement required for residential projects

Notably, though, a contractor is required to provide the owner with a disbursement statement on residential construction projects under Texas Property Code § 53.258. And, that statement must include the names and addresses of each subcontractor hired by the contractor who's being paid out of the final disbursement. While that's not a lien waiver, per se, that could at least force the contractor to divulge their subs, and those subs could be contacted to see if they've been paid.

Additional resources

Finally, these resources might provide some value: - Texas Lien Waivers Guide and FAQs - The Property Owner’s Guide to Lien Waivers - How To Handle Requesting & Tracking Lien Waivers
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