A lien waiver is used by a lien claimant or potential claimant to forfeit his or her right to a lien upon a progress payment or final payment. The waiver can be conditional, meaning that the payment must clear the bank before the lien is released, or unconditional, meaning the lien is released upon the recording of the waiver regardless of whether or not the claimant is ever actually paid.

A waiver and release given by a claimant or potential claimant is unenforceable unless it substantially complies with the applicable form described in Sec. 53.284 of the Texas Property Code.
The four types of lien waivers in the State of Texas include:
- Conditional Waiver and Release on Progress Payment;
- Unconditional Waiver and Release on Progress Payment;
- Conditional Waiver and Release on Final Payment; and
- Unconditional Waiver and Release on Final Payment

Let's say a contractor reaches an agreed-upon point a project where she recorded a lien. The owner wants the lien released up to that point, and writes a check for the amount due on the work completed. The contractor offers an unconditional waiver and release on progress payment, which protects her interests in case the bank refuses to honor the check. As long as the check is good, the lien gets released up to the date of the progress payment. Otherwise, the claimant retains the lien until the responsible party finds another way to pay the bill.

Texas lien law requires an actual payment before an owner may request an unconditional waiver. A person may not require a claimant or potential claimant to execute an unconditional waiver and release for a progress payment or final payment amount unless the claimant or potential claimant received payment in that amount in good and sufficient funds. See Sec. 53.283.

Under Sec. 53.284(c), if a claimant or potential claimant is required to execute an unconditional waiver and release in exchange for or to induce a progress payment, the waiver becomes effective immediately, up to the point set out in the document.

All unconditional waivers must be titled as such and contain the following required statutory warning: "This document waives rights unconditionally and states that you have been paid for giving up those rights. It is prohibited for a person to require you to sign this document if you have not been paid the payment amount set forth below. If you have not been paid, use a conditional release form."

Further, the waiver identifies the parties, the project, the work and/or materials provided, and relevant dates and payment amounts. Sign it in front of a notary and submit it to the local recording office.

In summary, a lien waiver is an important tool, but take care to use the proper form. The wrong choice can lead to a loss of lien rights before receiving payment. Each case is unique, and Texas lien law can be complicated. Contact an attorney for complex situations, with questions about waivers, or any other issues related to mechanic's liens.

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