In this post, we will look at a lien waiver and a lien release. We’ll define the difference, as well as outline how and for whom each one works.
As a subcontractor or supplier on a private commercial construction project, it’s essential to understand your mechanics lien rights. Knowing what you can do to protect yourself can be what ensures the timely and full payment you deserve. Fortunately, the state of Texas has passed construction laws that can protect the subcontractors and suppliers from slow or non-payment. For example, as a subcontractor or supplier, you have the right to file a mechanics lien on a private commercial project to secure payment.
However, Texas Construction laws, in general, are confusing and often tricky to navigate. Along with strict timelines for submitting paperwork, there are official forms regulated by the state of Texas. Understanding the specific documents, as well as where and how to obtain them, is essential for any subcontractor or supplier trying to get paid.
Lien Waiver: What & Why?
A lien waiver is a document that waives and forfeits the lien rights of the signing party. A lien waiver is typically signed at the time of payment. The lien waiver form is a state-mandated form and should only be signed by the subcontractor or supplier in exchange for payment. The lien waiver form does not technically need to be notarized or filed with the county, as it is an internal document and more of an insurance policy for the project owner, so they know the downstream subcontractors have been paid. If you sign a lien waiver, be aware that you might lose your right to file a mechanics lien – so it is in your best interest to sign it only upon receiving payment.
Lien Release: What & Why?
A lien release is a document that is signed and issued by a contractor or subcontractor after a lien has already been filed. The purpose of the lien release is to release a lien that has been filed. However, unlike the lien waiver, the release of lien form must be notarized and filed in the official property records of the county. The lien release form will cancel an existing mechanics lien that was filed against the project.
In both cases, the signer must use caution before signing either a lien waiver or a lien release because of the effect it will have on their future ability to assert lien claims.
Need to file a lien release? Click here to start.