Lien waviers

7 months ago

My husband and I are building a home with a custom builder. Can we require that the custom builder provide us with a lien waiver from the various contractors as the project moves forward. We have a draw schedule for specific phases of completion. Unfortunately, we did not put anything in the contract and cannot hold any portion of the draw. Is it too late to require the waviers? Our builder hasn’t been on the up and up with different phases of the process and we are getting concerned that we have anything to stand on.

Thanks

Senior Legal Associate Levelset
180 reviews

It’s common for lien waivers to be present or required on a project even in a situation where the use of lien waivers wasn’t explicitly set out in the contract. Generally, the party who’s got the money has the power – so, if an owner requires lien waivers be executed in order to receive payment, then, typically, the contractor attempting to collect payment will need to execute a lien waiver. It’s usually that simple.

Note that, as long as an owner isn’t abusing the waiver process, there’s generally little issue or fuss about having to submit lien waivers. In construction, exchanging lien waivers for payment is the norm.

Still, it’s important for an owner to utilize mechanics lien waivers as they were intended. Requesting conditional mechanics lien waivers in exchange for payment shouldn’t typically spark a big dispute. After all, conditional mechanics lien waivers are only effective when the payment on the waiver is actually made. But, if an owner tries to force their contractor to submit an unconditional mechanics lien waiver before they’ve received payment, it wouldn’t be surprising to receive push back there. In fact – that’d run afoul of § 53.283 of the Texas Property Code.

For more information on Texas lien waivers: Texas Lien Waivers Guide and FAQs.

For more lien waiver basics: The Property Owner’s Guide to Lien Waivers

Disclaimer: The information presented here is not legal advice and should not be construed as such. Rather, this content is provided for informational purposes. Do not act on this information as if it is advice. Further, this post does not create any attorney-client relationship. If you do need legal advice, seek the help of a local attorney.
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