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What’s the Difference Between Conditional and Unconditional Lien Waivers? Part 2

Construction professionals who fail to review the contents of a lien waiver are not only signing away their mechanic’s lien rights but also putting their very livelihoods on the line. If they signed an unconditional lien waiver, there’s very little that can be done in the event that only partial payment is received. Conditional lien waivers do away with this problem entirely. 

In part one, we discussed unconditional lien waivers. Below, a Houston construction lien attorney will discuss conditional lien waivers as well as the rights of contractors, subcontractors, and material suppliers that are faced with signing either type of lien waiver. To ensure that your lien rights are protected and properly exercised to secure full payment, partner with the team of Houston construction lien attorneys at Cotney Law. 

What Is a Conditional Lien Waiver? 

A conditional lien waiver becomes effective only when payment has been received in full from either the owner or general contractor. Unlike an unconditional lien waiver, you are being paid upfront. For this reason, it is always in your best interest to sign only conditional lien waivers.

Know Your Rights

Fortunately, Texas is one of only twelve states to have statutory lien waiver forms and laws in place to define their validity. Texas Property Code Sec. 53.281 states that a conditional waiver is only effective if there is evidence of payment. Additionally, Texas Property Code Sec. 53.283 states that a person may not require you to sign an unconditional lien waiver until you’ve received either full or partial payment. Failure for an owner or contractor to abide by these laws could result in a lien waiver becoming invalid. If you believe a lien waiver you signed is invalid and you would like to dispute it, consult with one of our Houston construction lien attorneys

Bottom line: only sign a lien waiver if you’ve received the exact amount stipulated in the waiver. We further recommend that you only sign conditional lien waivers to ensure that you are paid in full for the services you provide. 

Consult an Attorney

In a perfect world, a lien waiver would simply be a receipt of payment. You do the job, and you get paid. Unfortunately, payment disputes are a common occurrence. And while Texas has passed laws to protect the rights of those in the construction industry, there will always come a time when contractors and subcontractors must preserve and exercise their lien rights. For aid in protecting your lien rights, reviewing and disputing lien waivers, and filing mechanic’s liens, partner with the experienced Houston construction lien attorneys at Cotney Law. 

If you would like to speak with a Houston construction lien attorney, please contact us today.

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.