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Texas Waivers

Texas Waivers

  • New Texas Waivers (effective 1/1/12)
  • Texas law mandates the use of uniform statutory lien waiver forms, for both conditional and unconditional lien waivers.
    • The Texas waivers must be notarized.
  • Texas law prohibits the use of contractual waivers of lien rights for commercial construction projects.  The residential construction industry can be exempted from the prohibition on contractual waivers of lien rights.
  • "Pay when Paid" suggests time for payment and can be effected by any “no damage for delay” provisions written in to the general contract by the owner. Owners may have the ability to hold themselves harmless to any contract completion and/or payment delays. (Zachry Construction Company v. Port of Houston Authority of Harris County, Texas)
  • "Construction contracts" entered into on or after January 1, 2012 in Texas are governed by the state's new Anti-Indemnity Statute, enacted as part of Texas HB 2093 and signed into law by Governor Rick Perry (R) in June 2011. The bill outlawed (and rendered unenforceable) broad indemnity clauses that owners or general contractors would use to require subcontractors to not hold the owner or general contractor responsible for the owner or general contractor's own negligence or fault. This does not apply to clauses that require a subcontractor to indemnify, hold harmless or defend an owner or general contractor for the bodily injury or death of an employee of the subcontractor. HB 2093 also voids construction contract clauses that require the purchase of additional insured coverage, or the addition of other insurance policy provisions, to the extent that it requires or provides coverage "the scope of which is prohibited" by the aforementioned anti-indemnity provisions. This section does not apply to provisions in insurance policies, or in additional insurance policy provisions, issued under a consolidated insurance program to the extent that such a policies or provisions list, add or delete named insureds to the policy.

  • Retainage Provisions

    Public

    • The Texas Code does not specify a maximum rate of retainage. It does provide, however, that all contracts providing for retainage of more than 5 percent, except those under $400,000 and certain specified public works contracts, shall have the retainage deposited in an interest-bearing account, of which the interest earned is paid to the contractor upon completion. TEX. GOV'T CODE ANN. §§ 2252.032 and 2252.033.
    • A claim for retainage is never valid for an amount greater than 10 percent or the amount specified on the contract, whichever is less. TEX. GOV'T CODE ANN. § 2253.076.
    • Under the Texas Transportation Code, the public entity may retain a maximum of 5 percent of the contract price. At the request of the Contractor and with approval of the public entity and the comptroller, the retained amount may be deposited under a trust agreement with a bank and the interest earned shall be paid to the contractor. TEX. TRANS. CODE ANN. § 223.010.
    • Under the Texas Water Code, retainage shall be 10 percent until final completion of the project. However, if satisfactory progress is being made, the board may eliminate retention when the project is 50 percent complete. At substantial completion, the board may release all or a portion of these monies. The contractor receives no interest on retainage held on the first 50 percent of the work, but does receive interest on any retainage held on the remaining 50 percent of the work. TEX. WATER CODE ANN. § 49.276.

    Private

    • The owner must retain 10 percent of either the contract price or the value of the work to be complete. TEX. PROP. CODE ANN. § 53.101. Although the statute only requires the owner to withhold retainage for 30 days, revisions to § 53.057 of the Texas Property Code, for perfecting a claim on retainage, complicate matters. Hence the owner may withhold for significantly more than 30 days.