Wednesday, September 12, 2012

Lien Law Online eLert for 9/11/2012 - Texas

September 11, 2012 The forms for waiving lien rights for progress payments and final payments have been updated to expressly include a place for a notary’s signature. As happens in the creation of statutes, there is a conflict in the statutory changes that went into effect in 2012 that mandate the exclusive forms to use as lien waivers. Section 53.281 of the Texas Property Code provides that for a waiver of lien to be valid it must utilize the new statutory form and be notarized. However, the new forms found later in the statute – which must be utilized – do not include a place for execution by a notary (referred to as a ‘jurat’ when the author swears to the veracity of the information or simply an acknowledgement where only the signing is verified). Thus, it is unclear whether the mandated form should be followed (without a notary signature) or whether the text of section 53.281 should be followed, and the statutory form altered to insert a notarization blank. However, this conflict should be practically irrelevant. If payment is not made to the person executing the waiver, then the waiver is invalid regardless of its format, and a lien can likely be asserted. But if payment in full has been made, the debt is extinguished, and no lien is needed to secure payment. Thus, the format of the form is moot. For expediency, the forms provided include a place for a notarization, should a claimant elect to follow the admonition in section 53.281. Gregory A. Harwell, Esquire (Contributing Author) Gardere Wynne Sewell, L.L.P Revised Forms now found in Texas chapter: Unconditional Waiver and Release on Final Payment Conditional Waiver and Release on Progress Payment Conditional Waiver and Release on Final Payment Unconditional Waiver and Release on Progress Payment

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