On June 15, 2021, Gov. Greg Abbott signed into law House Bill 2237, introducing major changes to Chapter 53 of the Texas Property Code .
These changes, which took effect on January 1, 2022, reflect new rules and regulations surrounding the filing of a Texas mechanics lien and all steps that come with it, including notice requirements and deadlines.
Texas is among the states that regulate lien waivers. In Texas, construction participants are expected to use statutory forms for their lien waivers, including the unconditional lien waiver and release on progress payment. Unconditional waivers are typically used for final payments as they immediately release any lien claims on the progress payment specified on the form. Understanding the difference between conditional and unconditional waivers is crucial in protecting your payment rights.
When do you use a Texas Unconditional Waiver and Release on Progress Payment?
Ask yourself if you meet these two conditions before signing a Texas Unconditional Waiver and Release on Progress Payment:
1. You have your payment on hand.
Any unconditional waiver in Texas must be signed only when you have received your payment. Once you sign an unconditional lien waiver, you are attesting that you have already gotten paid. Note that cheques and credit card transactions do not count as payment unless the money has been cleared in the bank.
2. You have received only progress payment.
Progress payment implies that your work on a project is still in progress, hence you are still expecting to receive more regular payments in the future. The payment that you have received should not be your final payment yet, because this Texas lien waiver is specific for progress payments only.
There are four types of lien waivers in Texas. If you think you do not meet at least one of the conditions above, consider signing a different type of Texas lien waiver.
How to fill out a Texas Unconditional Waiver and Release on Progress Payment
It is very important that you use the statutory lien waiver form found in the Texas Property Code. The Texas Unconditional Waiver and Release on Progress Payment must look like the following:
In the form above, the Notice statement must be written in bold type in at least 10-point font size. This is very important as it is specifically required under Texas laws.
You can fill out the rest of the form by simply providing the following information in the blanks:
1. Project
This is the official project name. Some projects have clear identifiable names but some don’t. If your project does not have an official project name, you may write a description for the project. Make sure to write the project address in the description.
2. Job No.
This is your project number or contract number.
3. $
This is the payment amount you have received. Remember that for this specific Texas lien waiver, this payment must be a partial payment for your ongoing work on a project. This must not be your final payment.
5. Person with whom signer contracted
This is the name of the party who hired you for the project.
6. Owner
This is the name(s) of the owner(s) of the property.
7. Location
This is the project address, including zip code and name of the county.
8. Job description
This is a description of the work that you have furnished to the project, and for which you are relinquishing your lien rights.
9. Date
This is the date when you sign the lien waiver.
10. Company name, Signature, Title
This is your or your agent’s information, including signature and official title.
Must a Texas Unconditional Waiver and Release on Progress Payment be Notarized?
No. Beginning 2022, Texas no longer requires lien waivers to be notarized.
Best practices before signing a Texas Unconditional Waiver and Release on Progress Payment
1. Use the statutory Texas lien waiver form
Remember that Texas strictly mandates its construction parties to use only the valid lien waiver forms described in the Texas Property Code. There are specific instructions for preparing the lien waiver forms, including writing the Notice statement in bold type. Before signing a Texas lien waiver, it is a good idea to countercheck the form you are signing with the statutory form required by the law.
2. You are no longer required to have your Texas lien waiver notarized
Beginning 2022, Texas lien waivers no longer have to be notarized for them to be effective.1
3. Verify that you have the money on hand
The Texas Unconditional Waiver and Release on Progress Payment is an unconditional lien waiver – it is extremely important to understand that once your sign this form, you also attest that you have already gotten paid. If a cheque bounces or a credit card transaction gets rejected, you can no longer file a Texas mechanics lien over the part of the project covered in the document that you have already signed.
If you are unsure whether this unconditional waiver is the right form for you, consider signing a Texas Conditional Waiver and Release on Progress Payment instead.
Further reading