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Unconditional & conditional waivers required for pay app #1?

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On this commercial AIA project since Jan, standard AIA stuff we've seen before, including the conditional lien waiver. Now they want an unconditional waiver in order to get our first payment (after 2 other subcontractors have recently damaged the work we've done and had to fix/ redo). I would like to stop all work on this project, but I know I can't :-( What are my options? Thanks!

2 replies

Mar 31, 2021
The legal analysis would start with a review of your contract, and then extend to any communications which have occurred. Based on what you have written, it appears that you are a subcontractor, and should be requesting change orders to address damage to your work by other subcontractors. Under Chapter 53 of the Texas Property Code (the law for mechanic's liens and bond claims), there are specific provisions about conditional and unconditional lien waivers. Section 53.283 states: "Sec. 53.283. UNCONDITIONAL WAIVER AND RELEASE: PAYMENT REQUIRED. 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." Retain a construction attorney to evaluate your legal situation and to provide advice. Good luck.
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Mar 31, 2021

Hi Sharon,

This may be a bit of a business decision. I hesitate to get in to too much detail, as this is a public forum. Legally speaking, the "conditional" versus "unconditional" portion of the lien waiver speaks to whether you have been paid already or not. Conditional waivers are typically used when you give the owner/GC the waiver before being paid. Undconditional waivers are often used in simultaneous exchange for payment or at the end of a contractors work on a particular project. You could request a change order necessary to repair the damage, but in this instance, the owner and GC will probably take the position that they did not damage your work and are therefore not responbile for it and that you should take your payment and then go after to offending subcontractor that damaged it, if you can figure out who did it. I'm not saying that the owner/GC is correct in this regard, especially the GC who has project oversight responsiblity and a duty to protect the work as it is completed.

I'm not sure why you want to stop work on the project, but I'm happy to discuss this issue with you further directly. There will be no charge for this initial consultation.

Very best,

Ben House

281-762-1377

ben@houesperron.com

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