Home>Levelset Community>Legal Help>Hello I am a sub contractor who is being asked to supply a account statement from my supplier, along with my Lien waiver. She says it is texas law to supply the account statement is this true
Hello I am a sub contractor who is being asked to supply a account statement from my supplier, along with my Lien waiver. She says it is texas law to supply the account statement is this true
GC wants to have an account statement from my supplier, which will show exactly what I paid for the material?
1 reply
Sep 11, 2018
Texas is one of the relatively few states with specifically required lien waiver forms required by statute. And, it's one of the 3 states that requires lien waivers to be notarized. There is no requirement, however, that an account statement setting forth the amounts paid to sub-tier suppliers be provided with the waiver in order for the waiver to be valid.
Such a statement and request likely stems from the text of the Texas statutory lien waiver form, which states in part:
"The signer warrants that the signer has already paid or will use the funds received from this progress payment to promptly pay in full all of the signer’s laborers, subcontractors, materialmen, and suppliers for all work, materials, equipment, or services provided for or to the above referenced project in regard to the attached statement(s) or progress payment request(s)." (Progress Payment Waiver Language)
However, the "statement" or "progress payment request" referenced is the invoice or pay-app of the waiving party itself, not the waiving party's aborers, subcontractors, materialmen, and suppliers. Support for this reading can be found in the text of the "Final Payment" waiver forms which require that:
"The signer warrants that the signer has already paid or will use the funds received from this final payment to promptly pay in full all of the signer’s laborers, subcontractors, materialmen, and suppliers for all work, materials, equipment, or services provided for or to the above referenced project up to the date of this waiver and release."
Note, however, that the direct contractor may have its own internal requirement to obtain such an account statement document, or may be working under a request from the property owner to obtain it. The reason for wanting the document is likely to avoid potential "unknown" lien claims from sub-tier parties, and to provide evidence for the "warranty" contained within the waiver language, that all sub-tiered parties are paid. If a claimant doesn't want to disclose its margin by supplying an account statement - the desired result is actually better served by supplying a lien waiver from the sub-tier party. A partial or final unconditional waiver related to the amounts paid through the current time provides all evidence necessary such that the GC and property owner can rest assured that no liens will be filed from the waiving parties.