A lien waiver is a document that gives up your right to file a lien. Read it before you sign it.
Lien waivers are a routine part of construction, but they are also dangerous to sign without reading carefully. We see it regularly: a subcontractor signs a waiver at the end of a job, the check bounces or never comes, and when they call us they have already signed away the rights they needed to collect.
Conditional vs. Unconditional Waivers
The conditional/unconditional distinction is the key thing to understand about lien waivers.
A conditional waiver says that you are giving up your lien rights only if and when you actually receive payment. If the check bounces or the wire never comes, the waiver does not take effect. Your lien rights remain intact.
An unconditional waiver says that you have given up your lien rights, full stop. It does not matter whether the payment actually cleared. The moment you sign it, the rights are gone.
The rule is simple: never sign an unconditional lien waiver until you have confirmed that the payment has actually been received and cleared. For a check, that means after it has cleared your bank, not just after you have deposited it.
Progress Waivers vs. Final Waivers
A progress waiver relates to a specific payment period or a specific draw on the contract. It covers the amounts paid during that period and nothing more. Signing a progress waiver does not waive your rights to amounts that will be owed in the future.
A final waiver covers the full contract amount, including any extras and any retainage. Signing a final waiver is a complete release of all lien rights on the project.
A final unconditional waiver is the most powerful document in construction. Signing one before you have confirmed full payment, including all change orders and all retainage, can permanently eliminate every lien right you have on that project with no remedy.
What Contractors Should Watch For
Waivers that are too broad. A waiver for one draw should cover only that draw. If the document says it covers “all claims” or “all amounts” without specifying the payment amount and the payment date, read it very carefully.
Waivers signed in exchange for partial payment. Some owners or general contractors will ask for a final waiver in exchange for a partial payment, with a promise to pay the rest later. Once you sign the final waiver, the promise is all you have. We recommend against this in almost every case.
Waivers with incorrect amounts. If the document states a payment amount that is less than what you were promised, do not assume it is a typo. Either negotiate the amount before signing or have an attorney review it.
Texas Changed the Rules on Waivers
Texas law now provides specific standard forms for lien waivers: conditional and unconditional versions for both progress payments and final payments. Using these standard forms is generally the safest approach for everyone involved.
If you are being asked to sign a waiver form that looks very different from these standard forms, or that contains unusual language, it is worth a few minutes of our time to review it before you sign.
If You Already Signed a Waiver and Were Not Paid
Contact us. The answer depends on whether the waiver was conditional or unconditional, whether it was for a progress payment or a final, and exactly what happened with the payment. In some circumstances, particularly where a conditional waiver was signed but payment was never actually made, there are arguments that the waiver is not effective. These situations are fact-specific and the analysis is different in every case. The earlier you contact us, the more we can do.
Frequently Asked Questions
What is the difference between a conditional and unconditional lien waiver?
A conditional lien waiver only takes effect if and when payment is actually received and cleared. An unconditional waiver eliminates your lien rights immediately upon signing, regardless of whether payment ever arrives. Never sign an unconditional lien waiver until payment has actually cleared your bank account, not just been deposited, but cleared.
I signed a final waiver but the check bounced. Have I lost my lien rights?
Not necessarily. If you signed a conditional waiver, the waiver only takes effect upon actual receipt of payment. Since the condition was not met, the waiver may not be effective. Contact us immediately. The analysis is fact-specific, but the earlier you call, the more options remain available.