The Complete Lien Waiver Playbook

Key Takeaways

• Texas lien waivers confirm that contractors have received or expect payment for specific work or materials on a construction project.

• Signing a lien waiver removes the contractor’s right to file a mechanic’s lien, which is a legal claim used when payment is not received

• Texas only recognizes four state-approved lien waiver forms under Property Code §53.284.

• Only parties with lien rights, such as general contractors, subcontractors, suppliers, and labourers, can file a mechanic’s lien when payment is not received.

This guide breaks down each waiver type and helps you choose the right one based on Texas regulations and payment requirements.

What is a Lien Waiver in Texas?

A lien waiver is a legal document that confirms contractors have received or expect payment for work or materials on a construction project. These waivers also protect property owners from future payment claims once payment is verified or received. 

When you sign a lien waiver, you’re giving up your right to file a mechanic’s lien in the future. Essentially, a lien is a legal claim filed against a property to secure the payment of a debt.

A mechanic’s lien is a legal tool that permits contractors to claim a lien on a property if they don’t receive payment. This claim can:

• Cloud the property’s title
• Make it hard to sell or refinance the property
• Lead to a forced sale of the property to pay the debt (in some cases)

Only parties with lien rights can file a mechanic’s lien when payment is not received. These lien rights grant them the legal ability to make a claim on a property for unpaid work. These individuals include:

• General and original contractors
• Subcontractors
• Suppliers
• Laborers
• Material or equipment suppliers
• Certain professionals (depending on the project)

Sometimes, a lien waiver may need notarization to strengthen its reliability and help parties trust that the signer’s identity was verified.

Texas Lien Waiver Law

Texas regulates lien waivers under Chapter 53, Subchapter L of the Texas Property Code. These provisions establish the legal foundation for lien waivers and explain how they must be prepared and applied to construction projects.

Lien waivers are only enforceable if they look almost exactly like the four state-approved forms in §53.284. If the wording is too different, the waiver cannot be used. The Texas legislature defines four types of lien waivers, so you can select the appropriate form for your situation.

Types of Lien Waiver Forms in Texas

The Texas Property Code provides four different lien waiver forms you can use based on your situation. The one you need will depend on payment timing and status. See some more information on each form below:

Conditional Waiver and Release on Progress Payment

Conditional Waiver and Release on Progress Payment is under Section 53.284(b) of the Texas Property Code. You would sign this waiver for a progress payment that’s promised or in transit — like when you’re handed a check, but the money isn’t in your account yet.

The waiver remains conditional until the bank clears the check, so your lien rights stay in place until you are actually paid. You can use this waiver for progress payments throughout the life of a project. It should list work or materials covered, so you’re only waiving lien rights for that payment — not everything on the job.

The waiver becomes effective only after the funds fully clear.

Example: Maria’s flooring crew wraps up their first installation phase, but the payment arrives by check. Instead of releasing lien rights immediately, Maria signs a conditional waiver and waits for the bank to clear the check. The waiver becomes effective only after the bank releases the funds, ensuring her company stays protected if the check bounces.

Unconditional Waiver and Release on Progress Payment

An Unconditional Waiver and Release on Progress Payment appears under Section 53.284(c) of the Texas Property Code. The waiver applies only after you receive cleared progress-payment funds. It becomes effective the moment you sign and deliver it, confirming the payment was received in good and sufficient funds.

Use this waiver only after checking your account to confirm the funds have fully cleared. The form must identify the specific work or materials covered so you release rights only for the amounts already paid.

Note: If you previously used a conditional waiver and the payment cleared, you may not need an additional unconditional waiver.

Example: After confirming that the funds cleared in his bank account, David signs the unconditional waiver with confidence.

Conditional Waiver and Release on Final Payment

You can find the Conditional Waiver and Release on Final Payment under Section 53.284(d) of the Texas Property Code. This waiver applies once you finish all work, but the final payment remains uncleared. It protects your lien rights until the payment clears, ensuring you release rights only if and when verified funds are received.

The waiver becomes effective only when the bank clears the check or the final payment fully clears. It must list the final amount and completed work so the waiver accurately reflects the verified payment.

Note: Contractors often request this form before releasing final payment, but your lien rights stay protected until the funds clear.

Example: Sarah finishes a demanding wiring project and submits her final documents. She attaches a conditional final waiver, knowing it becomes effective only when her last payment clears.

Unconditional Waiver and Release on Final Payment

The Unconditional Waiver and Release on Final Payment is defined in Section 53.284(e) of the Texas Property Code. This waiver applies only after you receive your final full payment. It becomes effective immediately after you sign and deliver the waiver; you should only sign after confirming you’ve received payment in full.

You may be asked to provide this waiver early, but it should be signed only after payment has been verified. The form must list the final amount, project details, and completed work so the release matches the confirmed payment.

Example: John confirms that all payments, including retainage, have cleared his account. With full payment verified, he signs an unconditional final waiver and releases all remaining lien rights.

Best Practices for Texas Lien Waivers

Manage your lien waivers confidently with these best practices that support accurate documentation across every stage of your project.

Notarize When Helpful: The Texas Property Code doesn’t require notarization under House Bill 2237. However, notarizing your waivers strengthens your records by confirming identity and adding reliable, dispute-ready verification.

Identify Invoices Clearly: Reference exact invoice numbers or pay applications to avoid waiving unintended amounts or unrelated work.

Maintain Accurate Records: Keep copies of waivers, invoices, and payment confirmations to support compliance and prevent future payment issues.

Verify Payment Status: Confirm cleared funds before signing unconditional waivers to protect lien and bond-claim rights until you’re paid in good funds.

Use Statutory Forms: Follow Texas Property Code Section 53.284 to ensure your waivers remain valid and enforceable.

Streamline Your Texas Lien Waiver Process

Handling lien waivers in Texas can feel overwhelming when payment reviews and document requirements overlap. If you need your waiver notarized, meet with a notary online in under 7 minutes, from anywhere with Wi-Fi.

Book an online notary appointment today and see how easy it can be!