Texas lien waivers: which form, when

This explains the Texas Property Code in plain terms. It is not legal advice. For a specific job or dispute, talk to a Texas construction attorney.

Texas has four lien waiver forms, set by law. Two are for progress payments, two for the final. Each comes as conditional or unconditional. The short rule: sign the conditional form until the money is in your account. Sign the unconditional form only after.

Contractors get asked for a waiver on almost every payment. Lenders want one with every draw. Some clients want one because a friend told them to ask. Here is what each form does, and how not to give up rights you still need.

What a lien waiver does

On a Texas job, the people who furnish labor or materials can have a lien on the property if they don't get paid. A lien waiver is you giving up that right, for a payment, in writing.

The owner wants it because it shows the money they paid reached you. You give it because you're getting paid. The trouble starts when the waiver says more than the payment covers, or when you sign it before the money clears.

Your waiver covers your lien rights. It does not cover your subs' or suppliers' rights. That is what the list of subcontractors and suppliers and the bills-paid affidavit are for.

The four Texas forms

Texas Property Code section 53.284 sets out four forms. A waiver is enforceable only if it substantially complies with the right one. That means a generic waiver from a national template site may not do what you think. Use the Texas wording for the Texas form you need.

1. Conditional waiver and release on progress payment (53.284(b))

Use it when you're about to be paid for part of the job and the money hasn't cleared. It only takes effect once you're actually paid: for a check, once it's endorsed and paid by the bank.

This is the one you send with an invoice or a draw request. If the check bounces, you haven't given anything up.

2. Unconditional waiver and release on progress payment (53.284(c))

Use it only after a progress payment is in your account. It says you've been paid through a date.

The progress forms leave out what you haven't been paid for yet. In the form's words, the release does not cover "unpaid retention, pending modifications and changes, or other items furnished." Read the blanks before you sign.

3. Conditional waiver and release on final payment (53.284(d))

Use it at the end of the job, when the final payment is coming but hasn't cleared. Like the progress version, it only takes effect once you're paid.

4. Unconditional waiver and release on final payment (53.284(e))

Use it only when you've been paid in full for the whole job. This one gives up your lien rights for everything. There's no going back.

The two unconditional forms must start with a bold notice. In the statute's words, the document "waives rights unconditionally and states that you have been paid for giving up those rights." The same notice says no one may require you to sign it if you haven't been paid. If you haven't, it says to use the conditional form.

Which one to sign: the simple rule

Two questions. Is this the last payment? Has the money cleared? That picks the form.

Does a Texas lien waiver need a notary?

Not anymore, for most jobs. A 2021 law, House Bill 2237, rewrote parts of the lien chapter. One change: the statutory waivers no longer need to be notarized. It applies to original contracts signed on or after January 1, 2022 (Hinshaw & Culbertson summary; Allensworth summary).

A lot of pages online still say "notarized". They were written before the change. If your contract is older than 2022, ask a lawyer which rules apply.

Mistakes that cost contractors money

Signing unconditional before the check clears. The client hands you a check and asks for the unconditional waiver on the spot. Give them the conditional. It protects them too, because it takes effect the moment the check is paid.

Signing a final waiver on a progress payment. A final waiver gives up rights for the whole job. If there's money left to come, you just gave it up on paper.

Forgetting pending changes. If a change order is approved but not paid, it should not be swept into a waiver for an earlier payment. Keep your waivers matched to what was actually paid. See change orders.

Using another state's form. Texas wants its own wording. A California or "universal" waiver may not hold up here.

Losing track. A waiver for every payment on every job adds up. When the lender calls six months later, you need to find the right one fast.

Waivers are one piece of the Texas paperwork

On a Texas residential job, the waiver travels with other papers:

• Before work starts: the list of subcontractors and suppliers (53.256).
• Each time you ask for money: a disbursement statement naming the subs you'll pay from it (53.258), and the waiver.
• At final payment: the bills-paid affidavit (53.259) and the final waiver.

The whole list, in job order, is in Texas residential construction paperwork.

Sources

• Texas Property Code, chapter 53, sections 53.256, 53.258, 53.259 and 53.284: statutes.capitol.texas.gov
• Hinshaw & Culbertson, "A Primer on Changes Made to the Texas Mechanic's and Materialman's Liens Act, Effective January 1, 2022": hinshawlaw.com
• Allensworth, "HB 2237: Changes to Texas Mechanic's Lien Laws": allensworthlaw.com

This explains the Texas Property Code in plain terms. It is not legal advice. For a specific job or dispute, talk to a Texas construction attorney. Residential jobs only; commercial rules differ.