The Texas Legislature has enacted new laws specifying requirements for lien waivers and releases. These new laws protect laborers and materialmen by preserving their lien rights until they get paid. The old, common practice of forcing subcontractors to sign otherwise enforceable “blanket lien waivers,” in exchange for the privilege of working on a project, is now gone. Importantly, the new law provides specific form lien waivers and releases.
There are four separate forms, each customized to a different situation based on status of work completed and payment: (1) Conditional Waiver and Release on Progress Payment; (2) Unconditional Waiver and Release on Progress Payment; (3) Conditional Waiver and Release on Final Payment; and (4) Unconditional Waiver and Release on Final Payment. They can be found at Texas Property Code §53.284.
There are important distinctions between these forms. They are not to be used interchangeably. The new lien waiver and release laws, and the requirement to use forms that substantially comply with the forms contained in the Texas Property Code, apply to contracts executed on or after January 1, 2012. There is a grace period in effect for lien waivers and releases in attempted compliance with the new law, which expires on August 31, 2012.
Don’t be caught using forms that do not comply. Update your forms today. For more information, read A Construction Attorney’s Guide to the New Lien Waivers.