The mechanic’s lien is the most powerful tool that a contractor can wield to obtain payment for services provided. As we’ve covered previously, the State of Texas has some of the most complex lien laws in the nation, often to the detriment of anyone seeking owed payment. However, new Texas laws aim to protect the lien rights of contractors and subcontractors working in the Lone Star State.
Below, we discuss the changes to Texas Property Code 53.281 that protect those who may be pressured to waive their lien rights before beginning a project. If you are concerned that your lien rights are in jeopardy, contact a Houston construction lien attorney from Cotney Law.
Changing Texas Law
We previously discussed the two different types of lien waivers: conditional and unconditional lien waivers. Despite their differences, these two lien waivers are essentially invalid in Texas unless payment has been received. However, a contractor can still waive their lien rights before work begins by signing a construction contract that includes a “no lien” clause. Until now, that is.
Texas Property Code 53.281 stipulates that “Any waiver and release of lien or payment bond claim under this chapter is unenforceable unless a waiver and release is executed and delivered in accordance with this subchapter.”
Of note, the subchapter states that there must be evidence of payment in the event of conditional release. The only way for a contractor to waive their lien rights is through a conditional or unconditional release, and those are only valid if payment has been received. Bottom line: unless you’ve been paid, you can’t waive your lien rights.
As with many aspects of Texas lien law, there are exceptions. The above law only applies to private construction projects. Even then, the above lien waiver laws do not apply to contracts that pertain to residential projects and are “made before labor or materials are provided under the original contract or subcontract.” There are other exceptions that may apply to your situation. For assistance in determining if these laws apply to you, contact a Houston construction lien attorney.
Exercising Your Lien Rights
Retaining your lien rights is one of the most important things you can do as a contractor. You never know when payment disputes may threaten the success of your company. Texas has taken steps to protect the rights of contractors and subcontractors that put their all into projects. But protecting your lien rights is only half the battle. When an owner withholds payment, you must be prepared to exercise your lien rights in order to protect the company and projects you’ve invested in. For assistance with securing payment and filing a mechanic’s lien in Texas, partner with the team of Houston construction lien attorneys from Cotney Law.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.