A Texas Conditional Lien Waiver and Release on Progress Payment is a type of waiver that relinquishes a contractor’s or supplier’s right to file a mechanics lien against a property upon receiving payment for work performed.
What Is a Texas Conditional Waiver and Release on Progress Payment?
The Texas Conditional Lien Waiver on Progress Payment is typically requested by property owners or general contractors to ensure that subcontractors and suppliers acknowledge the expected payment while protecting themselves from future lien claims related to that payment. This waiver is issued by the party awaiting payment, usually the subcontractor or supplier, as a conditional agreement to waive lien rights once the payment is fully received and cleared.
When Do You Use a Texas Conditional Waiver and Release on Progress Payment?
You use this document when you’re requesting or acknowledging a progress payment during an ongoing construction project. It is typically submitted along with a pay application or invoice covering a specific period of completed work. By providing a conditional waiver at this stage, you signal your intention to waive lien rights for the amount specified—but only after you have actually received the payment.
Aside from the conditional waiver, there is also the Texas Unconditional Waiver and Release on Progress Payment. This type of waiver is used when a contractor, subcontractor, or supplier has been paid and is willing to unconditionally give up their lien rights for the amount received. Unlike the conditional waiver, the unconditional lien waiver takes effect immediately upon signing, regardless of whether the payment has been cleared.
Each type of waiver corresponds to a specific stage in the payment process, ensuring that all parties are protected throughout the project’s duration.
How to Fill Out a Conditional Waiver on Progress Payment Form in Texas
Accurately completing the form is crucial for its validity under Texas law. Here’s what you need to include:
1. Project Information
- Project Name: Enter the official name of the construction project.
- Job Number: Include any relevant job or contract numbers associated with the project.
2. Payment Details
- Maker of the Check: Specify who is issuing the payment (e.g., the property owner or general contractor).
- Payment Amount: State the exact amount of the payment you’re expecting to receive.
- Payee(s): List all parties who will receive the payment.
3. Property Owner
- Owner’s Name: Provide the verified name of the property’s legal owner.
Texas Conditional Waiver Form Template
- Double-Check Information: Ensure all details are accurate to prevent payment issues. There are cases where it’s difficult to locate the specific owner of a complex project. These inaccuracies can invalidate a waiver. At Handle, we help customers ensure accuracy through our in-platform research tools or through our lien specialists who can do the research for you through our Full Service offering.
- Verify Payment: Do not consider your Texas mechanics lien rights waived until the payment has been fully processed and cleared in your account.
Do Lien Waivers need to be Notarized in Texas?
Under Sections 53.281 to 53.287 of the Texas Property Code, specific statutory forms must be used for lien waivers to be valid. Using the prescribed format ensures that your waiver is enforceable under Texas law.
As of January 1, 2021, for contracts signed after this date, notarization of lien waivers is no longer required in Texas. For contracts signed before this date, notarization may still be necessary. Always verify the contract date to determine if notarization is required.
Understanding and correctly using the Texas Conditional Lien Waiver for partial payments is essential for protecting your financial interests in a construction project. By following the proper procedures and legal requirements, you can safeguard your right to payment while maintaining good relationships with other parties involved.
Texas Lien Waiver Management Software
Managing lien waivers manually can be time-consuming and prone to errors. Handle’s waiver management platform streamlines the entire process of preparing and tracking Texas Conditional Lien Waivers on Progress Payments.
With Handle, you can automatically generate compliant lien waiver forms, ensure they’re submitted on time, and have all your documents organized in one easy-to-access place. This means less stress over administrative tasks and more focus on getting your projects completed smoothly, all while keeping your lien rights securely protected.