Commercial Real Estate

Remarkably, Lien Waivers continue to be among the most overlooked construction project documents. For a Developer and property Owner, the purpose of the Lien Waiver is clear: to ensure Contractors are paid so as to reduce the risk of liens on the property. The Lien Waiver is an affirmation from the Contractor to the Owner/GC that it has received a payment, and that they will not record a lien against the property for their work.

After all, getting the construction project done timely and free from liens is the goal.

In many states, as discussed in a recent article from the Credit Management Association, construction lien waivers can be like a scene out of the wild west. A standoff between Owner and Contractor over the waiver, free from any real rules and oftentimes unrestrained in scope. For example, in some instances signing a release not only waives the Contractor’s right to file a mechanic’s lien, but also their ability to file claims for other related issues such as breach of a contract, and delays caused by project mismanagement.

Wild West

Texas has become a bit more refined. In 2011, the Texas Legislature addressed the topic of Lien Waivers in Chapter 53 of the Texas Property Code. For the first time, parties to a construction contract signed after January 1, 2012 are to use statutorily prescribed Lien Waiver forms. In fact, the Texas Legislature mandated forms for both progress payments and final payment on a construction project.

The 4 different Lien Waiver forms include:

  1. Conditional Waiver and Release on Progress Payment – to be used when a contractor/subcontractor is required to execute a waiver and release before receiving a progress payment, or the progress payment is made by check.
  2. Unconditional Waiver and Release of Progress Payment – to be used when a contractor/subcontractor is required to execute a waiver and release to prove the receipt of a progress payment.
  3. Conditional Waiver and Release on Final Payment – to be used when a contractor/subcontractor is required to execute a waiver and release before receiving a final payment, or the final payment is made by check.
  4. Unconditional Waiver and Release on Final Payment – to be used when a contractor/subcontractor is required to execute a waiver and release to prove the receipt of a final payment.

Texas Property Code. Chapter 53, Section 53.284

As a commercial property Owner, you should learn to love these 4 Lien Waiver forms. When a Contractor signs a valid Lien Waiver and submits it to the Owner, the Contractor waives any lien rights it may have had for work it performed on the project to date.

Of course, there remain some notable exceptions to these waivers, such as written agreements relating to accord and satisfaction disputes, settlement of a pending court or arbitration proceeding, or agreements made after a lien affidavit claim has been filed. The Property Code sets forth the full breath of exceptions.

Bad and/or non-existent Lien Waiver practices regularly find themselves at the center of construction project disputes. As an Owner, if done correctly, the days of worrying about liens surfacing weeks or even months after the last payment should be over. Taking simple steps with Lien Waivers can build a better and more successful Owner.

We hear so much about the Business and Real Estate growth in North Texas. Whether it is corporate relocations like Toyota, the sprawling Legacy West development coming together, or the Frisco #5BMile continuing to expand – the Business and Real Estate climate in North Texas and particularly Collin County could not be hotter.

I recently had the opportunity to sit down with Maher Maso, the Mayor of Frisco, Jim Leslie, the Managing Partner of Frisco Square, and Ran Holman, the Market Leader of Cushman & Wakefield.

In this video, Mayor Maso talks about what makes Frisco “the best”, including it’s business partnerships and excellent school system.

The full series of Videos from the event moderated by Mark L. Hill can be seen here.

Mark L. Hill is a Partner with Scheef & Stone, L.L.P.  Scheef & Stone is a full-service business law firm that represents individuals, publicly and privately held corporations, partnerships, financial institutions, and government entities in a wide spectrum of sophisticated transactions and complex litigation.

We are only 2 weeks away from the DFW Platinum Corridor® event – Frisco’s $5 Billion Mile & Beyond.

Last I heard, there were over 600 guests attending!  Look forward to being part of this presentation featuring numerous great panelists, including Frisco’s Mayor Maher Maso, Stephen Jones of the Dallas Cowboys, and many others.  You can still get tickets here.

We will be discussing the “$5 Billion Mile,” ways to improve transportation, and why businesses, developers and the public are attracted to this area. 

#5BMile, Frisco, CRE, Developers,A new development called Frisco Crossing is planned for north Frisco. It will feature a cluster of restaurants with outdoor patios and a food truck park. Apartments and single-family homes would also border green space, while several retail stores would go up nearby and a dozen more eateries would border the edges of the 83.8 acres at the southwest corner of FM 423 and US 380.

This article from Frisco Enterprise gave a great introduction to the Frisco Crossing development, and its recent presentation to the City of Frisco.

Frisco Crossing is from The Rudman Partnership, the same developers bringing Frisco Station to the $5 Billion Mile along the North Dallas Tollway in Frisco.

The preliminary plans for Frisco Crossing also show a Texas Hill County style design.  As a native of the Texas Hill Country area, and with all the large scale corporate developments and re-locations coming to Frisco, it’s nice to see something a bit different.