We are a sub signing a contract sent by GC that states we waive our right to file a lien against the property. Another clause states that all disputes are to be settled by binding arbitration.
Is this legit? Should I sign?
1 reply
Aug 19, 2020
Lien waivers act as a receipt for funds for the receiving party. They specify that the party waives their right to file a mechanics lien. As a result, they protect the property owner from lien claims on their property. Typically, the GC or property owner will require their subcontractors and suppliers to sign a lien waiver in exchange for payment.
Texas has strict and specific requirements related to lien waivers, that are regulated under Texas mechanics lien law. Texas requires contractors to use specific waiver forms, with few exceptions. Failure to use the proper forms, using the wrong form, or attempts to modify the waiver language will result in the lien waiver being invalid and unenforceable.
There are 4 different types of lien waivers regulated in Texas statutes. Conditional means that it is only effective after payment is made, while unconditional means it is effective as soon as it is signed and delivered. You should be careful when signing any waiver, but the most critical waiver is unconditional. If you sign an unconditional lien waiver this states that you have already received payment in full for the work and materials you provided on the project.
Here are some guides to each form in Texas, and how to use them:
- Conditional Progress Lien Waivers
- Unconditional Progress Lien Waivers
- Conditional Final Lien Waivers
- Unconditional Final Lien Waivers