Home>Levelset Community>Legal Help>For projects that are bank funded, the bank ALWAYS requires that I sign a unconditional lien waiver prior to payment
For projects that are bank funded, the bank ALWAYS requires that I sign a unconditional lien waiver prior to payment
For projects that are bank funded, the bank ALWAYS requires that I sign a unconditional lien waiver prior to getting the final paid, I have tried to refuse and explain why with no luck, any thoughts?
2 replies
Jun 17, 2020
Requiring unconditional lien waivers before making payment is actually illegal in Texas. § 53.283 of the Texas Property Code states "A person may not require a claimant or potential claimant to execute an unconditional waiver and release for a progress payment or final payment amount unless the claimant or potential claimant received payment in that amount in good and sufficient funds."
With that being said, it's still pretty common for customers to try and force unconditional waivers before payment is made. Proposing that conditional waivers be used instead should be appropriate, considering that's what the Texas Property Code calls for at § 53.284. If the bank is still wary of releasing payment, offering to immediately follow up with unconditional waivers might be useful. And, if all else fails, having a Texas construction lawyer by your side could be a valuable asset when straightening out the lien waiver process.
For more discussion on Texas lien waivers, here are some great resources:
- Texas Lien Waiver Forms & Guide – All You Need to Know- Texas Lien Waivers Guide and FAQs
0 people found this helpful
Helpful
Jun 18, 2020
Thank you, and I am not surprised that it is illegal, it just makes sense that it would be.