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what happens to a contractor who refuses to sign a progress made waiver?

I have ongoing projects going at my boss' home. We would like to cut ties with the current contractor but he refuses to sign progress made waivers for the first three draws that he has received full payment for. He says that he won't sign anything until payment for two other draws is received. Those two draws are for materials that has not been received, work that we specifically did not approve and on site supervision that was not done (we have a log of who is in the residence and how long). Does the contractor have grounds to file a lien and NOT sign the progress made waivers?

1 reply

Mar 19, 2020

Texas contractors aren't statutorily required to provide lien waivers in exchange for payment. It's extremely common for a contract to require that contractors provide waivers, and it's also extremely common for waivers to be exchanged for payment even if it's not in the contract. But, in terms of what's required, contractors won't have to provide waivers unless the contract requires it. Levelset discusses that principle here: Do I Have to Sign a Lien Waiver to Get Paid? Further, regarding work performed and already paid for: Keep in mind that mechanics lien rights won't be available for work that's already been paid for. This is true regardless of whether a lien waiver is actually exchanged. So, if there's plenty of documentation and communications exchanged which proves payment was made for prior work, then not having waivers for that work isn't the end of the world. Though, certainly, it's a good idea to collect a lien waive every time an invoice is paid.

Lien rights not available materials not actually delivered

If materials haven't actually been furnished to the job site, those materials generally won't give rise to lien rights. Parties who provide specially fabricated materials may still be entitled to lien - but for ordinary materials, there must usually be some form of incorporation for mechanics lien rights to be available.

Mechanics lien rights and change orders

Unauthorized change orders and extras aren't so black and white, and the Texas property code doesn't provide a lot of insight into how to treat them. If a change order is properly authorized, then there's little doubt - that change becomes a part of the contract and is lienable if not paid for. However, if proper change order procedure isn't followed, then the work done might not necessarily be lienable. Looking at Texas Property Code § 53-023, which sets what payments are secured by liens: it states that mechanics liens are generally available for "the labor done or material furnished for the construction or repair" of the improvement. At least at this section, there's nothing limiting unauthorized change orders from lien claims. But still, as a general principle: A contractor generally can't just perform extras without being authorized to do so. So, if the work was truly not contemplated in the original scope, then an owner could fight their contractor on the change orders and potentially win. But, if the "extra" work is within the originally contemplated scope, then the contractor may have some leeway there - and the work could be lienable.

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