Lien Waiver

Texas

Does Texas Property Code 53.085, provide me the right to demand or require a subcontractor who has been paid in full sign a Lien Waiver or All Bills Paid Affidavit? My builder has signed one, but he is a lying hot mess, we caught him red handed right in the thick of a lien situation. We paid him 1/21 for a job that was completed 1/22. He cashed the check 1/25 and the sub notified us 3/22 that the bill had not been paid and they were starting the lien process, that they had already sent the builder several notices. The builder has confessed that he finally paid the bill 4/6 but refuses to provide us with paid receipts or lien waivers. Is this a breach of contract? He is not using my funds paid to him to pay his bills from my construction (fiduciary relationship?). We are concerned, this is one of 2 subs we are aware of, we have no idea how many others are out there. Does Texas Property Code 53.085, provide me the right to demand or require a subcontractor who has been paid in full sign a Lien Waiver or All Bills Paid Affidavit?

5 replies

May 6, 2021

Section 53.085 pertains to the rights that an owner has vis-a-vis the original contractor, not a subcontractor. You can require that the original contractor (the contractor who contracted with the owner) to provide such lien waivers.

You can also consider writing joint checks to make sure that the subcontractors are paid.

You do not provide enough facts to determine your legal situation. If you are the owner of a residence, and the original contractor did not perfect a valid homestead mechanic's lien contract, then no one (contractor, subcontractor, supplier, etc.) can file a valid lien against your homestead property.

If the project is residential, then the subcontractor is required to provide the owner notice by certified mail by the 15th day of the second month after the end of the month of the unpaid work. If you did not receive such a notice, then the subcontractor cannot perfect a valid mechanic's lien.

If the project is commercial, then the subcontractor has to provide notice by certified mail by the 15th day of the third month after the month of the unpaid work.

Retain a construction attorney to evaluate your legal situation and to provide advice.

Good luck.

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May 6, 2021
@Brian Erikson - Just to clarify a bit further. Per Texas Property Code 53.085, I cannot require subs to provide lien waivers but I can require my GC (that I signed my contract with) to provide me lien waivers from each of his subcontractors and suppliers, correct? It seems to make complete since, and be a very reasonable request but he is refusing and only will provide a all bills paid affidavit signed by him. But it is legal and I can require my GC (that I signed my contract with) to provide me lien waivers from each of his subcontractors and suppliers, correct? Thank you again for all your assistance in this matter.
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May 6, 2021

No, you cannot require that the original contractor (the contractor with whom you contracted) provide lien waivers from the contractor's subcontractors, but you sure can request them. Read Texas Property Code Section 53.085(a), which states:

(a) Any person who furnishes labor or materials for the construction of improvements on real property shall, if requested and as a condition of payment for such labor or materials, provide to the requesting party, or the party's agent, an affidavit stating that the person has paid each of the person's subcontractors, laborers, or materialmen in full for all labor and materials provided to the person for the construction. In the event, however, that the person has not paid each of the person's subcontractors, laborers, or materialmen in full, the person shall state in the affidavit the amount owed and the name and, if known, the address and telephone number of each subcontractor, laborer, or materialman to whom the payment is owed.

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May 6, 2021
I already request them and told me no way. He refuses to provide any proof of payment. Other than his sworn word in an affidavit. Coming from someone already caught in lies... his sworn word has proven to not hold true meaning.
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May 7, 2021

If the contractor has breached the contract, then examine the default remedies in the contract.

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