The Contractor’s Affidavit of Bills Paid
Before a property owner makes a final payment to a general contractor, the owner has the right to require the contractor to sign a sworn affidavit stating that every subcontractor, laborer, and materialman on the project has been paid in full.
This document gets relatively little attention compared to liens and notices, but it has serious consequences on both sides of the transaction.
What the Affidavit Says
If the contractor has paid everyone in full, the affidavit confirms that fact. The owner can then make the final payment with confidence that no subcontractor is going to show up later with a lien claim.
If the contractor has not paid everyone in full, the affidavit must disclose the amount owed and the name of each person who has not been paid. The owner can then withhold those amounts from the final payment until the contractor pays them.
The affidavit may also include a waiver or release of the contractor’s own lien rights (conditioned on actually receiving the final payment), a warranty that certain bills will be paid from the funds received, and an agreement to indemnify the owner against any losses from false information in the affidavit.
The Risk for Contractors
Contractors need to understand that signing a false affidavit, saying that everyone has been paid when they have not, is not a contract dispute. It is a crime.
Intentionally, knowingly, or recklessly making a false or misleading statement in this affidavit is a Class A misdemeanor. And beyond the criminal exposure, a contractor who signs a false affidavit is personally liable for any loss or damage that the owner or anyone else suffers because the affidavit was false.
We have seen contractors sign these affidavits without reading them, or sign them hoping that the subcontractor who has not been paid will not find out. Neither is a good idea. If you are a contractor and you have not paid all of your subcontractors and materialmen in full, the affidavit must say so. That disclosure may be an uncomfortable conversation with the owner, but it is a far better conversation than the one you will have with a prosecutor.
What the Affidavit Means for Subcontractors
If you are a subcontractor who has not been paid, and the general contractor signs an affidavit falsely claiming that everyone has been paid, that false affidavit does not eliminate your lien rights. The law does not allow a contractor to sign away your legal claims by making false statements about them.
What it does mean is that if the owner relied on the false affidavit in good faith and paid the contractor, the owner may have an additional defense against your lien claim, arguing that the owner paid in reliance on the contractor’s sworn representation that you had been paid. This is one of several reasons why it is critical for subcontractors to send their pre-lien notices on time and to stay on top of the payment timeline during a project, rather than waiting until the end.
The Bottom Line
Property owners: you have the right to require this affidavit before making final payment. Use it. It is your best tool for confirming that all parties have been paid before you release your final check.
General contractors: read the affidavit before you sign it. If everyone has not been paid, the affidavit needs to say so. The criminal and civil exposure for signing falsely is real.
Subcontractors: if you believe the general contractor signed a false affidavit claiming you were paid when you were not, contact us. That fact pattern matters to your claim.
Frequently Asked Questions
What is a contractor's affidavit in Texas construction?
It is a sworn written statement that a general contractor may be required to sign before receiving final payment from a property owner. The affidavit states that all subcontractors, laborers, and materialmen on the project have been paid in full, or, if any have not been paid, discloses the names and amounts owed. The owner can use this information to withhold funds for unpaid parties before releasing final payment.
What happens if a contractor signs a false final payment affidavit?
Signing a false affidavit, meaning knowingly stating that all subcontractors have been paid when they have not, is a Class A misdemeanor in Texas. The contractor is also personally liable for any loss or damage resulting from the false information. This is a serious criminal and civil exposure that contractors must not take lightly.
As a subcontractor, can I prevent a contractor from signing a false affidavit?
The strongest protection is to send your pre-lien notices on time so the owner is already aware you are owed money before any affidavit is signed. If you believe a false affidavit was signed claiming you were paid when you were not, contact us. A false affidavit does not eliminate your lien rights, and the false statement itself may be relevant to your claim.