September 04, 2018
Author: Steven E. Kennedy
Organization: McGuire, Craddock & Strother, P.C.
The Basics
The mechanics’ lien laws in Texas are complex. The applicable law is determined by whether the project on which the claim is made is a public project (State or Federal) or a private project (residential or commercial), and what type of payment bond, if any, has been provided. In the case of private ownership, the Texas Property Code is applicable. Where the Owner is the State of Texas, a local state governmental entity, subdivision or agency, the former McGregor Act, now Texas Government Code Chapter 2253 is applicable. Federal government projects are governed by the Miller Act, 40 U.S.C.A. beginning at Section 3131, formerly Section 270a. This paper deals with private projects. Public works bond claims, state and federal, are not covered in this paper.
The procedure for filing mechanics’ and materialmans’ liens on private property in Texas is governed by the Texas Property Code Chapter 53 and, to a limited extent, Property Code Chapter 41 and the Texas Constitution. For homestead property, Property Code Chapter 53. Chapter 41 and the Texas Constitution are all applicable. Contracts for homestead renovation and remodel work are controlled by all three. If the claim is on a homestead property specific additional procedures must be followed. For those having a contract directly with the owner (original or prime contractor) on a non-residential1 property, procedures for securing a mechanics’ and materialmans’ lien are relatively simple. The lien must contain the information as outlined below, be timely filed, and the owner must be timely provided with a copy of the lien. For those not having a contract directly with the owner, such as subcontractors, sub-subcontractors and suppliers, notices containing specific information and language must be sent within a specific time frame to “perfect” the lien. A lien that is “perfected” is simply one in which the claimant (person or entity owed money) has complied with the statutory requirements for filing and notice. Although Texas courts have held that Chapter 53 of the Texas Property Code is to be “liberally construed\" “in order to protect the claims of laborers and materialmen, this liberal construction is generally applied only to specific wording and general content issues and not to deadlines.2 There is apparently no prohibition to filing a lien affidavit before the indebtedness accrues.3
But First, the Constitutional Lien
Original contractors benefit from a lien provided under the Constitution of the State of Texas. Texas Constitution Article XVI, §37 allows original contractors a lien for construction or repair of “buildings and articles.” This constitutional lien does not require compliance with the requirements of the Texas Property Code to enforce the lien. The Constitutional Lien is only available to original contractors and, for construction purposes, is generally limited to “buildings.” As an example, site improvements such as sidewalks and landscaping would not likely be lienable on a constitutional basis. Because of the limitations of a constitutional lien, claimants are not advised to rely on it to protect their rights. A statutory (Property Code) lien is the most effective method to preserve claims and the constitutional lien is relied on only as a last resort for an original contractor who fails to timely perfect a statutory lien. Public property, both state and federal, is not subject to constitutional lien, or any lien, for that matter.
Although the constitutional lien exists without the necessity of filing a lien affidavit (it is self-executing) it would be doubtful that such a lien could be enforced against a good faith purchaser without knowledge of the lien claim. Therefore, it is recommended that, even if a constitutional lien claim is all that remains for the claimant, an affidavit should be prepared and filed to preserve the claim.
The Statutory (Property Code) Lien
The Texas Property Code provides a statutory mechanism for both contractors and subcontractors of any tier to perfect a Mechanic’s and Materialmans’ Lien on private property in Texas. Lien claimants must file an affidavit of lien with the Deed Records for the county in which the property on which the labor or material was provided is located. The following section sets out the particular requirements of the affidavit of lien.
The Lien Affidavit Contents - Claimants of All Tiers
The Lien Content Requirements
For all types of private construction, whether commercial or residential in nature, the content of the lien affidavit has changed from the pre-1997 requirements. The new law requires that the lien affidavit contain substantially the following (with the new material underlined):
(1) a sworn statement of the amount of the claim;
(2) the name and last known address of the owner or reputed owner;
(3) a general statement of the kind of work done and materials furnished by the claimant and for a claimant other than an original contractor, a statement of each month in which the work was done and materials furnished for which payment is requested;
(4) the name and last known address of the person by whom the claimant was employed or to whom the claimant furnished the materials or labor;
(5) the name and last known address of the original contractor;
(6) a description, legally sufficient for identification, of the property sought to be charged with the lien;
(7) the claimant’s name, mailing address, and, if different, physical address; and
(8) for a claimant other than an original contractor, a statement identifying the date each notice of the claim was sent to the owner and the method by which the notice was sent.
The affidavit is not required to state individual items of work done or material furnished and specifically allows the use of abbreviations or symbols customarily used in the trade. However, claimants are advised to be careful to provide a meaningful description of the general type of work or material supplied and to not use abbreviations and symbols that are not commonly recognized in the trade and, preferably, by a judge that may be reviewing your lien affidavit if its adequacy is contested.
Of critical importance to the affidavit is the requirement of a “sworn statement.” See §53.054 (a)(1). The signature line on the affidavit must represent that the affidavit was “subscribed and sworn to” not just “acknowledged” to be true and correct.4
Notice of Lien
As noted above, if the claimant’s contract is directly with the owner, they only need to file the lien affidavit with the County Clerk in the county where the property is located by the fifteenth day of the fourth calendar month after the “indebtedness accrues.” Indebtedness to an original contractor accrues either on the last day of the month in which either party terminates the contract in writing or on the last day of the month in which the original contract is completed, finally settled, or abandoned. Indebtedness accrues to a subcontractor or supplier of any tier on the last day of the month in which the last of the labor or material was furnished. For residential construction, the deadline is the 15th of the third calendar month after the indebtedness accrues.
Unlike subcontractor or supplier claims, the only notice required of an original contractor is notice of the filed affidavit which must be provided to the owner or reputed owner at the owner’s last known business or residence address and is required to be sent within five (5) calendar days after the affidavit is filed. Tex. Prop. Code §53.055. In addition, subcontractors and suppliers (persons not having a contract directly with the owner) must also send a copy of the affidavit by certified mail to original contractor at the original contractor’s last known business or residence address within the same time period.
Subcontractors and Suppliers - Notices of Claim - First Tier
If the claimant is a subcontractor or supplier and has a contract directly with the original contractor (first tier subcontractor or supplier), they must give the owner written notice of the unpaid claim by the fifteenth day of the third calendar month (second month for residential construction) following each month in which labor was performed or material delivered for which they have not been paid. See §53.056 (c). These notices must be sent certified mail, return receipt requested, and must contain the following information:
If this claim remains unpaid, you may be personally liable and your property may be subjected to a lien unless you withhold payments from the contractor for payment of the claim or the claim is otherwise paid or settled.
See Property Code §53.056(d). This notice, sometimes referred to as a fund trapping notice, third month notice, or notice of intent to lien is not only required in order to perfect the claim, but it requires the owner to withhold funds in excess of the ten percent retainage required by statute. This is particularly important since the statutory ten percent retainage is rarely enough to cover claims against a general contractor who has defaulted. Once notice is given, the time for filing the lien is calculated the same as with a general contractor, i.e., by the fifteenth day of the fourth calendar month after accrual of indebtedness. As with an original contractor, lower tier claimants’ notice of the lien must be mailed to the owner by certified mail, return receipt requested, no later than the fifth day after the date the person files the affidavit.
Caution: If the claim is to include a “lien on retained funds,” Property Code, §53.103 used to provide a safe harbor for the owner for liens filed more than 30 days after final completion. Thanks to the 2011 legislature, that safe harbor is not so safe anymore. See Mechanics Lien Update section in the program materials dealing with the new retainage notices and line filing deadlines.
Limitation on Owner’s Liability
Absent a fund trapping notice, the owner’s liability is limited to statutory retainage, subject to proper notice of a retainage claim. The ability to trap funds and perfect a claim for retainage has been expanded, which will be discussed in detail in the update portion of the program materials.
Additional Notices Required - Second Tier and Below Subcontractors and Suppliers Not Having a Contract With the Original Contractor
If the claimant does not have a contract with the original contractor, they must also give written notice via certified mail, return receipt requested, to the original contractor not later than the fifteenth day of the second calendar month following each month in which all or part of the labor or material was provided to the project. See §53.054(b). In addition, the same fund trapping notice as described in the previous section must be given to the owner by the fifteenth day of the third calendar month (“third month” notice) as required for those having a contract directly with the original contractor. The second month notice is not required on residential construction because the deadline for the third month notice is moved up a month.
Notice for Specially Fabricated Items
Section 53.058 of the Property Code provides additional lien right to persons that provide specially fabricated materials. These persons must give the owner notice not later than the fifteenth day of the second month after the month in which they receive and accept an order for the specially fabricated materials. If their contract is with a person other than the original contractor, they must also give notice within that same time to the original contractor.
The notice must contain a statement that the order has been received and accepted and the price of the order. This notice must be sent by registered or certified mail, return receipt requested, to the last known business address or residence address of the owner or reputed owner and/or the original contractor as applicable.
IMPORTANT: In addition to the notice required by this section, the claimant must also give fund trapping notices under §53.056 if delivery has been made or if the normal delivery time has passed.
Since the lien of a claimant who accepts an order for specially fabricated materials, but fails to give notice under this section is valid as to delivered items, if they have given notice under §53.056 (the fund trapping notices), the implication is that a lien will be valid for items not delivered if a claimant providing specially fabricated material has complied with the notice requirements of this section. See, Property Code §53.058(f).
If notice of a retainage agreement has been provided and consists in whole or in part of an obligation to furnish specially fabricated material, as provided under §53.057, the claimant is not required to give separate notice of a contract for specially fabricated materials under this section.
Architect/Engineer/Surveyor Liens
Architects, engineers and surveyors no longer are required to have a contract “in recordable form” that contains a legal description of the property. The architect, engineer or surveyor still must have a written contract with the owner or the owner’s agent. Accrual of indebtedness for architects, engineers and surveyors, is now controlled by §53.053 in the same manner as for other mechanics or materialmen. However, the time of inception for the architect, engineer or surveyor’s lien, is the date of recording of the affidavit of the lien. This is a significant difference between the architect, engineer and surveyor lien and other mechanics’ or materialmans’ liens, which are on an equal footing as to each other without regard to the date of filing and whose inception date relates back to the commencement of improvements or delivery of materials to the property. This is now also the case for persons providing landscaping. See §53.021(d) and the following section.
Liens for Landscape Improvements
The 1999 amendments change Property Code subsections 53.021(d) and 53.124(e) to specifically allow for a Mechanic’s Lien for landscaping services. The lien of a landscape contractor, however, is now on par with those of the Architects, Engineers, and Surveyors, in that its inception date relates back to the day of recording of the lien, rather than the commencement of construction. Unfortunately, this means that, for landscaping contractors doing work on new construction, their lien rights may be behind other subcontractors and suppliers on the project.
Homestead Properties
In order to have a valid mechanics’ and materialmans’ lien on a homestead, there must be a written contract between the original contractor and owner, signed by both spouses (if property is owned by a married coupled) and filed with the county clerk prior to any work being done on the homestead. Under Section 41.007 of the Texas Property Code, a contract for home improvements must contain the following warning conspicuously printed, stamped or typed in an equal size to at least a ten point bold type or computer equivalent next to the owner’s signature line on each document creating a lien.
IMPORTANT NOTICE: YOU AND YOUR CONTRACTOR ARE RESPONSIBLE FOR MEETING THE TERMS AND CONDITIONS OF THIS CONTRACT. IF YOU SIGN THIS CONTRACT AND YOU FAIL TO MEET THE TERMS AND CONDITIONS OF THIS CONTRACT, YOU MAY LOSE YOUR LEGAL OWNERSHIP RIGHTS IN YOUR HOME. KNOW YOUR RIGHTS AND DUTIES UNDER THE LAW.
Failure to include the required language is, by statutory definition, a false, misleading or deceptive act within the meaning of the Texas Deceptive Trade Practices Act, Section 17.46, Texas Business & Commerce Code. Unlike statutory liens on non-homestead properties, a lien on a homestead is valid only if the claimant strictly complies with the requirements of Chapter 53 of the Property Code and any other relevant constitutional or statutory provisions.5 Tx. Prop. Code Ch. 41 and Texas Constitution, Art. 16 §50. It is important to note that where the work on a property is started before it acquires its homestead status, the additional requirements for perfecting on a homestead would not apply due to the relation-back doctrine.6 But watch out for the “residential construction” requirements discussed later in the paper.
Subcontractors or suppliers not having a contract directly with the owner or a homestead must still comply with the notice provisions and deadlines for filing of liens (shortened for all residential construction) required by Chapter 53 of the Property Code with the additional requirement that warning language must be contained in the notices as well as the lien affidavit. Notices for a homestead, however, must include or have attached the following statement:
If a person who furnishes materials or performs labor for construction of improvements on your property is not paid, your property may be subject to a lien for the unpaid amount if:
(1) after receiving notice of the unpaid claim from the claimant, you fail to withhold payment to your contractor that is sufficient to cover the unpaid claim until the dispute is resolved; or
(2) during construction and for 30 days after completion of construction, you fail to retain 10 percent of the contract price or 10 percent of the value of the work performed by your contractor.
If you have complied with the law regarding the 10 percent retainage and you have withheld payment to the contractor sufficient to cover any written notice of claim and have paid that amount, if any, to the claimant, any lien claim filed on your property by a subcontractor or supplier, other than a person who contracted directly with you, will not be a valid lien on your property. In addition, except for the required 10 percent retainage, you are not liable to a subcontractor or supplier for any amount paid to your contractor before you receive written notice of the claim.
The lien affidavit must contain the following notice conspicuously printed, stamped, or typed in a size equal to at least ten point boldface or computer equivalent at the top of the page:
Notice: THIS IS NOT A LIEN. THIS IS ONLY AN AFFIDAVIT CLAIMING A LIEN.
Liens on Leaseholds
For those providing improvements to tenants, it is very important to know that lien rights may be limited with regard to improvements to a leasehold. If the original contract is with a tenant, then the lien rights of any claimant may be limited to a claim against the leasehold interest of the tenant.7 Under recent case law, however, it may be possible for the claimant to show that the tenant was acting as contractor for the owner, and properly foreclose the lien against underlying property.8 Often, if a lien is filed on property that is occupied by a tenant, the filing of such a lien will likely be an event of default in the lease agreement between the tenant and the owner and the owner is likely to put pressure on the tenant to pay, regardless of whether the lien is valid. Note that, the Property Code provides for recovery of attorneys’ fees by the prevailing party where legal action is required to have a lien declared invalid. See §53.156
SPECIAL CONSIDERATIONS FOR “RESIDENTIAL CONSTRUCTION”
Time to File Lien Affidavit
The time requirements for filing a residential construction lien affidavit are one month shorter than for a non-residential lien. The lien affidavit on residential projects must be filed no later than the 15th day of the third month after indebtedness accrues.
Remember, indebtedness accrues for an original contractor when the project is finally completed, terminated, or abandoned. For a subcontractor, the “finally completed” refers to the subcontractor’s work.
Statute of Limitations
The statute of limitations for bringing a suit to foreclose on a lien arising under residential construction project one year after the last date the claimant may file the lien affidavit or within one year after completion termination or abandonment of the work under the original contract, whichever is later.
Subcontractor Claims on Residential Construction
For a subcontractor or supplier lien on non-residential work to be valid in Texas, the subcontractor or supplier must send a notice by registered or certified mail to the owner of the property by the 15th of the third month after every month in which the supplier or subcontractor provided labor or materials for which they did not get paid. In the case of residential construction, the deadline for sending this notice is reduced to the 15th day of the second month following each month in which all or part of the labor or material was provided for which the claimant has not been paid. As with non-residential projects, this notice must state in substance:
If the claim remains unpaid, the owner may be personally liable and the owner’s property may be subjected to a lien unless: (1) the owner withholds payment from the contractor for payment of the claims; or (2) the claim is otherwise paid or settled.
On a residential homestead, the notice must contain additional language that “conspicuously” states:
IF A SUBCONTRACTOR OR SUPPLIER WHO FURNISHES MATERIALS OR PERFORMS LABOR FOR CONSTRUCTION OF IMPROVEMENTS ON YOUR PROPERTY IS NOT PAID, YOUR PROPERTY MAY BE SUBJECT TO A LIEN FOR THE UNPAID AMOUNT IF:
(1) AFTER RECEIVING NOTICE OF THE UNPAID CLAIM FROM THE CLAIMANT, YOU FAIL TO WITHHOLD PAYMENT TO YOUR CONTRACTOR THAT IS SUFFICIENT TO COVER THE UNPAID CLAIM UNTIL THE DISPUTE IS RESOLVED; OR
(2) DURING CONSTRUCTION AND FOR 30 DAYS AFTER COMPLETION OF CONSTRUCTION, YOU FAIL TO RETAIN 10 PERCENT OF THE CONTRACT PRICE OR 10 PERCENT OF THE VALUE OF THE WORK PERFORMED BY YOUR CONTRACTOR.
IF YOU HAVE COMPLIED WITH THE LAW REGARDING THE 10 PERCENT RETAINAGE AND YOU HAVE WITHHELD PAYMENT TO THE CONTRACTOR SUFFICIENT TO COVER ANY WRITTEN NOTICE OF CLAIM AND HAVE PAID THAT AMOUNT, IF ANY, TO THE CLAIMANT, ANY LIEN CLAIM FILED ON YOUR PROPERTY BY A SUBCONTRACTOR OR SUPPLIER, OTHER THAN A PERSON WHO CONTRACTED DIRECTLY WITH YOU, WILL NOT BE A VALID LIEN ON YOUR PROPERTY. IN ADDITION, EXCEPT FOR THE REQUIRED 10 PERCENT RETAINAGE, YOU ARE NOT LIABLE TO A SUBCONTRACTOR OR SUPPLIER FOR ANY AMOUNT PAID TO YOUR CONTRACTOR BEFORE YOU RECEIVED WRITTEN NOTICE OF THE CLAIM.
False or Misleading Bills Paid Affidavit Penalties
A contractor or subcontractor providing an affidavit of bills paid on residential construction now may face a substantial fine and be personally liable in the event that the affidavit contains false or incorrect information. Under the new law, a person who “intentionally, knowingly, or recklessly” makes a false or misleading statement in an affidavit stating that all subcontractors and suppliers have been paid commits a Class A Misdemeanor that may be punishable by fine up to $4,000.00 or one year in jail or both. Any person signing such an affidavit may be personally liable for any loss or damage resulting from any false or incorrect information in the affidavit. The personal liability appears to arise whether the incorrect information is provided intentionally or not. This applies to both residential and non-residential construction §53.085 and §53.259.
Demand for Payment
Under §53.083 of the Property Code, once a subcontractor or supplier has provided the owner with notice of a claim against the general contractor, demand for payment may be made to the owner. The demand must state that all or part of the claim has accrued under §53.053 or is past due according to the agreement between the parties. A copy of the demand letter must be sent to the original contractor. Once this is done, the original contractor must notify the owner within thirty days if they intend to dispute the claim. If the original contractor does not provide timely notice to the owner that they dispute the claim, they are considered to have assented to the demand and the owner is required to pay the claim. You may, of course, incorporate a demand for payment into your notice of claim as is done in the suggested form at the end of this section.
Important: Notice and demand alone will not preserve a lien claim. If the owner does not pay you, you must still file an affidavit of lien within the time required by the statute.
Foreclosure
Although filing of a mechanics’ lien affidavit often results in payment by the owner in exchange for a release of lien, this is not always the case. If the owner continues to refuse payment, suit must be brought to foreclose the lien. A suit must be brought to foreclose the lien within two years after the date of filing of the lien affidavit (one year or residential construction) or within one year after completion of the work under the original contract under which the lien is claimed, whichever is later. In any suit to foreclose on a lien, or in any suit to declare that any lien or claim is invalid, the Court may award costs and reasonable attorney’s fees. Since the language of the statute is permissive (may) rather than mandatory (shall), there can be no guarantee that you will recover all of your attorney’s fees. See §53.156.
Attorneys’ Fees
Under Tex. Prop. Code §53.156, costs and attorneys’ fees are available to a prevailing party. Effective September 1, 2011, the statute was revised to change the discretionary language from “may award” to “shall award” with regard to costs and reasonable attorneys’ fees as are “equitable and just.” There is, however, a “carve out” for the mandatory award of attorneys’ fees in the case of residential construction.
Private Bond Claims
Although the primary mechanism for protecting lien rights on private property is the ten percent (10%) retainage requirement and fund trapping provisions found in subchapters D and E of the Texas Property Code, private payment bonds are available. Under subchapter I, an original contractor who has a written contract with the owner may furnish a bond for the benefit of claimants. If a valid bond is recorded with the county clerk as required under §53.203, the claimant may not file suit against the owner or the owner’s property and the owner is relieved of their obligations under subchapters D and E. See §53.201.
The bond must be in a penal sum at least equal to the total of the original contract amount, be written in favor of the owner, with the written approval of the owner endorsed on the bond. The bond must also be executed by the original contractor as principal and a corporate surety authorized and admitted to do business in the State of Texas and licensed by the state to execute bonds as surety. Finally, the bond must be conditioned on prompt payment for all labor, subcontracts, materials, specially fabricated materials, and normal and usual extras not exceeding fifteen percent (15%) of the contract price. Once filed with the county records as required under §53.203, a purchaser, lender or other person acquiring an interest in the property, is entitled to rely on the record of the bond and the contract as constituting payment of all claims as each claimant had filed a complete release and relinquishment of lien rights. See §53.204.
Perfection of a Private Bond Claim
A claim can be perfected on a payment bond in one of two ways. First, the claimant may perfect a lien claim under subchapter C or, in addition to providing the original contractor any applicable notices required under subchapter C, give to the surety on the bond, instead of the owner, all notices otherwise required to be given to the owner under subchapter C. See §53.206.
A claimant on a statutory private payment bond need not give notice directly to the surety unless the claimant has a direct contractual relationship with the original contractor and the agreed retainage is in excess of ten percent (10%) of the contract. See §53.206(b)(1). Under §53.207, however, if the owner receives any notices for a lien a fixed under subchapter C, the owner is to mail the surety a copy of all notices received. Failure, however, of the owner to send copies of notices to the surety does not relieve the surety of any liability under the bond if the claimant has complied with the requirements for notice to the owner and the contractor. See §53.207.
Short Limitation Period for Suit on a Private Payment Bond
A claimant must wait at least sixty (60) days after perfection of the claim on a payment bond for suit. Once the sixty (60) days is past, if the bond is recorded at the time the lien is filed, the claimant must sue on the bond within one year following perfection of the claim if the bond is not recorded at the time the lien is filed, the claimant must sue on the bond within two (2) years following perfection of the claim. See §53.208.
Summary
As can be seen from this \"brief\" outline of notice and filing requirements of the
Property Code, the requirements for compliance are complex.
If it appears that a lien will be necessary, at minimum, the following information\\ should be gathered in advance:
- Name and address of the project;
- Name and address of the owner;
- Name and address of the prime contractor, if applicable;
- Name and address of person with whom you have your contract;
- A legal description of the property on which the project is built, together with a street address if available;
- Invoices reflecting the amounts outstanding;
- Dates that the work was performed for which the claimant has not been paid.
Having this information ready should allow you to proceed promptly and efficiently in preparing the lien affidavit required by the Property Code. The old adage \"An ounce of prevention is worth a pound of cure\" is particularly applicable in the case of prompt action on past due accounts.
“SECOND MONTH” NOTICE
(reference Texas Property Code § 53.056)
[claimant’s letterhead]
[date]
VIA CERTIFIED MAIL, RETURN
RECEIPT REQUESTED #
[name of original contractor]
[address]
RE: Notice of Unpaid Account on [name of project]
[address of project]
Unpaid Claim [$ ]
Dear [ ]:
[insert name of claimant] has furnished labor and/or materials to the abovereferenced project under a contract with a subcontractor on the above referenced project, [insert name of subcontractor]. There remains due and owing $[insert dollar amount claimed] for such labor and/or materials furnished to this subcontractor [optional – as more fully set forth on the attached statements and billings sent to this subcontractor] [OR] [If a billing statement is not attached, a general description of the labor and/or materials must be provided].
If this claim is not promptly paid, [insert name of claimant] will proceed to notify the owner of this claim and, if necessary, place a lien on the property. This notice is sent to comply with the requirements of § 53.056 of the Texas Property Code and so that you may have an opportunity to see that this unpaid account is paid in full.
[name of claimant]
By:
[name], [title]
cc: via certified mail, return
receipt requested #____________
[party with whom you have a contract]
“THIRD MONTH” NOTICE
(reference to Texas Property Code §§ 53.056, 53.081 and 53.083)
[claimant’s letterhead]
[date]
VIA CERTIFIED MAIL, RETURN
RECEIPT REQUESTED #
[name of owner]
[address]
VIA CERTIFIED MAIL, RETURN
RECEIPT REQUESTED #
[name of original contractor]
[address]
RE: Notice of Unpaid Account on [name of project]
[address of project]
Unpaid Claim: [$ (optional: of which $____ is retainage, which will become due upon completion of the work)]
Dear [ ]:
[Name of claimant] has furnished labor and/or materials to the above-referenced project under a contract with [name of general contractor or subcontractor]. There remains due and owing $[insert dollar amount owing] for such labor [and/or materials] furnished to [insert name of general contractor or subcontractor] [optional - as more fully set forth on the attached statements and billings] [OR] [if a billing statement is not attached, a general description of the labor and/or materials must be provided]. [Optional: Retainage in the amount of $ has been withheld and is unpaid through [insert date].]
This claim has accrued under § 53.053 of the Texas Property Code and/or is pastdue under the terms of the contract referenced above. Demand is hereby made under §53.083 of the Texas Property Code for payment of the amount set forth above. This notice is sent to comply with the requirements of § 53.056 of the Texas Property Code, which requires that we advise you that if this claim remains unpaid, you may be personally liable and your property subjected to a lien unless payment is withheld from [insert name of original contractor] for the payment of this claim or unless the bill is otherwise paid or settled.
[name of claimant]
By: ______________________________
[name], [title]
cc: via certified mail, return
receipt requested #____________
[party with whom you have contract, if not original contractor]
LIEN AFFIDAVIT -- ORIGINAL CONTRACTOR
NON-HOMESTEAD PRIVATE PROPERTY
(reference Texas Property Code § 53.054)
LIEN AFFIDAVIT AND CLAIM
STATE OF TEXAS §
§
COUNTY OF §
BEFORE ME, the undersigned authority, personally appeared [insert name of person signing this affidavit, along with their title or relationship to the Claimant], who upon his/her oath states the following:
1. My name is [insert name of person signing this affidavit] and I am a resident of [insert county] County, Texas. I am [insert title] of [insert name of claimant], hereinafter sometimes referred to as “Claimant.” I am over 18 years of age, and am competent and authorized to make this affidavit.
2. Claimant’s mailing address is [insert mailing address] and [if different] physical address is [insert street address] [OR] [the same as Claimant’s mailing address].
3. Claimant furnished labor and materials for improvements to the real property described herein under a contract by and between Claimant and [insert name of owner], who is the owner or reputed owner of the real property described herein, whose last known address(es) is/are: [set forth the address of owner].
4. The labor, materials, and work furnished by Claimant are generally described as follows: [insert a general description of the work performed] [OR] [insert “a description of the work is set forth in the attached contract or billing statement.”] optional: A true and correct copy of the contract between claimant and [insert name of owner] further describing said work is attached hereto and is incorporated herein as Exhibit “[insert the letter or number of the exhibit, i.e. “A” or “1”].”
5. The real property sought to be charged with a lien by Claimant is described as the [insert name of Project] Project, which is the real estate located at [insert street address of property] and additionally described as follows: [insert the legal description of the property].
6. Claimant is the original contractor for the improvements for which a lien is claimed.
7. After allowing all just credits, offsets, and payments, the amount of $[insert dollar amount of claim] remains unpaid and is due and owing to Claimant under its contract with [insert name of owner], and Claimant, claims a lien on said property and improvements under the provisions of Texas Property Code § 53.001 et seq. to secure payment of said amount.
8. Claimant also claims a constitutional lien on such property pursuant to the provisions of Article 16, Section 37 of the Texas Constitution.
9. One (1) copy of this Affidavit is being sent certified mail, return receipt requested to the above-described Owner addressed to its last known address(es). [name of claimant]
By:
[name], [title]
SUBSCRIBED AND SWORN TO AND ACKNOWLEDGED BEFORE ME on this the _______ day of ____________________, 20____.
Notary Public in and for the State of Texas
My Commission Expires:
LIEN AFFIDAVIT – SUBCONTRACTOR/SUPPLIER
NON-HOMESTEAD PRIVATE PROPERTY
(reference Texas Property Code § 53.054, §53.056, §53.103)
LIEN AFFIDAVIT AND CLAIM
STATE OF TEXAS §
§
COUNTY OF §
BEFORE ME, the undersigned authority, personally appeared [insert name of person signing this affidavit along with their title or relationship to the Claimant], who upon his/her oath, states the following:
1. My name is [insert name of person signing this affidavit] and I am a resident of [insert county] County, Texas. I am [insert title] of [insert name of claimant], hereinafter sometimes referred to as “Claimant.” I am over 18 years of age, and am competent and authorized to make this affidavit.
2. Claimant’s mailing address is [insert mailing address] and Claimant’s physical address is [insert street address] [OR] [the same as claimant’s mailing address].
3. [FIRST ALTERNATIVE – use this paragraph if your contract is with the original contractor] Claimant furnished materials and labor pursuant to a contract with [insert name of original contractor], the original contractor on the project, whose last known address(es) is/are [insert all addresses of original contracting partner].
[SECOND ALTERNATIVE – use this paragraph if your contract is with a subcontractor or supplier] Claimant furnished materials and labor pursuant to a contract with [insert name of party with which you have a contract], whose last known address(es) is/are [insert all addresses of party with which you have a contract]. The original contractor on the project is [name of original contractor], whose last known address(es) is/are [insert all addresses of original contractor].
4. The name of the owner or reputed owner of the real estate hereinafter described is [insert name of owner], whose last known address(es) is/are: [insert the address of owner].
5. The labor, materials, and work furnished by Claimant are generally described as follows: [insert a general description of the work performed] [OR] [insert “a description of the work is set forth in the attached contract or billing statement.”] optional: A true and correct copy of the contract between claimant and [insert name of party with which you have a contract] further describing said work is attached hereto and is incorporated herein as Exhibit “[insert the letter or number of the exhibit, i.e. “A” or “1”].”
6. The real property sought to be charged with a lien by Claimant is described as the [insert name of Project] Project, which is the real estate located at [insert street address of property] and additionally described as follows: [insert the legal description of the property].
7. After allowing all just credits, offsets, and payments, the amount of $[insert dollar amount of claim] remains unpaid and is due and owing to Claimant under its contract with [insert name of contracting party], and Claimant, claims a lien on said property and improvements under the provisions of Texas Property Code § 53.001 et seq. to secure payment of said amount.
8. The month or months that the work was done and materials were furnished for which payment is requested are [insert month(s) and year(s)].
9. Notice of the claim was sent to the Owner on the following dates and by the following method:
Date sent / Method Sent
[date] / Via Certified Mail No. [insert certified mail number] Return Receipt Requested
[date] / Via Certified Mail No. [insert certified mail number] Return Receipt Requested
[OR] [insert “a true and correct copy of all notices reflecting the date and method by which they were sent are attached hereto as Exhibit “[insert the letter or number of the exhibit, i.e. A or 1]” and incorporated herein by reference.”]
10. One (1) copy of this Affidavit is being sent by Certified Mail, Return Receipt Requested to the owner described above, addressed to its last known address(es) as described above and one (1) copy of this Affidavit is being sent by Certified Mail, Return Receipt Requested to the original contractor described above, addressed to its last known address(es) as described above.
[name of claimant]
By:
[name], [title]
SUBSCRIBED AND SWORN TO AND ACKNOWLEDGED before me by the said [insert name], [insert title] of [insert name of claimant] this ___ day of_____________, 20____, to certify which witness my hand and seal of office.
Notary Public
In and For the State of Texas
RESIDENTIAL HOMESTEAD AND RESIDENTIAL
NONHOMESTEAD –
SECOND MONTH NOTICE
(reference Texas Property Code § 53.083, § 53.252 and § 53.254(g))
[claimant’s letterhead]
[date]
VIA CERTIFIED MAIL, RETURN
RECEIPT REQUESTED #
[name of owner]
[address]
VIA CERTIFIED MAIL, RETURN
RECEIPT REQUESTED #
[name of original contractor]
[address]
RE: Notice of Unpaid Account on [name of project] [address of project]
Dear [ ]:
[insert Name of Claimant] has furnished labor and/or materials generally described as [insert general description of labor and/or materials furnished] to the above referenced project under a contract with your contractor [or subcontractor to your contractor], [insert name of contractor or subcontractor to your contractor]. There remains due and owing $ [insert dollar amount of claim] for such labor and/or materials furnished to your contractor [OR] [subcontractor to your contractor] [OR] [as more fully set forth on the attached statements and billings].
This claim has accrued under Sections 53.252 and 53.254 of the Texas Property Code and/or is past-due under the terms of the contract referenced above. Demand is hereby made under Section 53.083 of the Texas Property Code for payment of the amount set forth above.
This notice is sent to comply with the requirements of § 53.252 of the Texas Property Code, which requires that we advise you that if this claim remains unpaid, you may be personally liable and your property subjected to a lien unless payment is withheld from [insert name of original contractor] for the payment of this claim or unless the bill is otherwise paid or settled.
If a subcontractor or supplier who furnishes materials or performs labor for construction of improvements on your property is not paid, your property may be subject to a lien for the unpaid amount if:
(1) after receiving notice of the unpaid claim from the claimant, you fail to withhold payment to your contractor that is sufficient to cover the unpaid claim until the dispute is resolved; or
(2) during construction and for 30 days after completion of construction, you fail to retain 10 percent of the contract price or 10 percent of the value of the work performed by your contractor.
If you have complied with the law regarding the 10 percent retainage and you have withheld payment to the contractor sufficient to cover any written notice of claim and have paid that amount, if any, to the claimant, any lien claim filed on your property by a subcontractor or supplier, other than a person who contracted directly with you, will not be a valid lien on your property. In addition, except for the required 10 percent retainage, you are not liable to a subcontractor or supplier for any amount paid to your contractor before you receive written notice of the claim.
[name of claimant]
By:
[name], [title]
cc: via certified mail, return
receipt requested #____________
[party with whom you have contract, if not original contractor]
LIEN AFFIDAVIT FOR HOMESTEAD OR
NON-HOMESTEAD PROPERTY–
ORIGINAL CONTRACTOR
(reference Texas Property Code § 53.054 and § 53.254)
NOTICE: THIS IS NOT A LIEN. THIS IS ONLY
AN AFFIDAVIT CLAIMING A LIEN.
LIEN AFFIDAVIT AND CLAIM
STATE OF TEXAS §
§
COUNTY OF §
BEFORE ME, the undersigned authority, personally appeared [insert name of person signing notice], who upon his oath, deposed and stated the following:
1. My name is [insert name of person signing notice] and I am a resident of [insert county] County, Texas. I am [insert title] of [insert name of claimant], hereinafter sometimes referred to as “Claimant.” I am over 18 years of age, and am competent and authorized to make this affidavit.
2. Claimant’s mailing address is [insert mailing address] and [if different] physical address is [insert physical address]. [OR] [is the same as Claimant’s mailing address.]
3. Claimant furnished labor and materials for improvements to the real property described herein under a contract by and between Claimant and [insert name of owner], who is the owner or reputed owner of the real property described herein whose last known address is [insert the address of the owner].
4. The labor, materials, and work furnished by Claimant are generally described as follows: [insert a general description of the work performed]. [OR] [a description is set forth in the attached contract or billing statement.] A true and correct copy of the contract between claimant and [insert name of owner] further describing said work is attached hereto and is incorporated herein as Exhibit “[insert letter or number, e.g. “A” or “1”].”
5. The real property sought to be charged with a lien by Claimant is described as follows: [insert the street address and the legal description of the property].
6. Claimant is the original contractor for the improvements for which a lien is claimed.
7. After allowing all just credits, offsets, and payments, the amount of $[insert dollar amount of claim] remains unpaid and is due and owing to Claimant under its contract with [insert name of owner]. Claimant claims a lien on said property and improvements under the provisions of Texas Property Code § 53.001 et seq. to secure payment of said amount.
8. Claimant also claims a constitutional lien on such property pursuant to the provisions of Article 16, Section 37 of the Texas Constitution.
9. One (1) copy of this Affidavit is being sent Certified Mail, Return Receipt Requested to the Owner described above, addressed to the Owner’s last known addresses as described above.
[name of claimant]
By: _________________________
[name], [title]
SUBSCRIBED AND SWORN TO AND ACKNOWLEDGED BEFORE ME on
this the _______ day of ____________________, 20____.
Notary Public in and for
the State of Texas
LIEN AFFIDAVIT FOR HOMESTEAD OR NON-HOMESTEAD -
SUBCONTRACTOR/SUPPLIER
(reference Texas Property Code § 53.054 and § 53.254)
NOTICE: THIS IS NOT A LIEN. THIS IS ONLY AN
AFFIDAVIT CLAIMING A LIEN.
LIEN AFFIDAVIT AND CLAIM
THE STATE OF TEXAS §
§
COUNTY OF ______ §
BEFORE ME, the undersigned authority, personally appeared [insert name of person signing notice], who upon his oath, deposed and stated the following:
1. My name is [insert name of person signing notice] and I am a resident of [insert county] County, Texas. I am [insert title] of [insert name of claimant], hereinafter sometimes referred to as “Claimant.” I am over 18 years of age, and am competent and authorized to make this affidavit.
2. Claimant’s mailing address is [insert mailing address] and [if different] physical address is [insert physical address] [OR] [is the same as claimant’s mailing address].
3. Claimant furnished labor and materials for improvements to the real property described herein, consisting generally of [insert a general description of labor and materials] [OR] [a description of the work is set forth in the attached contract or billing statement].
4. The real property sought to be charged with a lien by Claimant is described as follows: [insert the street address and the legal description of the property].
5. The name of the owner or reputed owner of the real estate hereinafter described is [insert name of owner], whose last known address is [insert the address of the owner].
6. Claimant furnished materials and labor pursuant to a contract with [insert name of contracting party]. The original contractor on the project is [insert name of original contractor], whose last known address is [insert the address of the original contractor].
7. The month or months that the work was done and materials were furnished for which payment is requested are [insert month(s) and year(s)].
8. After allowing all just credits, offsets, and payments, the amount of $[insert dollar amount of claim] remains unpaid and is due and owing to Claimant under its contract with [insert name of owner]. Claimant claims a lien on said property and improvements under the provisions of Texas Property Code § 53.001 et seq. to secure payment of said amount.
9. Notice of the claim was sent to the Owner, on the following dates and by the following method:
Date sent / Method Sent
[date] Via Certified Mail / No. [insert certified mail number] Return Receipt Requested
[date] Via Certified Mail / No. [insert certified mail number] Return Receipt Requested
[OR] [A copy of all notices reflecting the date and method by which they were sent is attached hereto as Exhibit “[insert letter or number, e.g. “A” or “1”]” and incorporated herein by reference.]
10. One (1) copy of this Affidavit is being sent by Certified Mail, Return Receipt Requested to the owner described above, addressed to the owner’s last known address as described above and one (1) copy of this Affidavit is being sent by Certified Mail, Return Receipt Requested to the original contractor described above, addressed to the original contractor’s last known address as described above.
[name of claimant]
By: _________________________
[name] [title]
SUBSCRIBED AND SWORN TO AND ACKNOWLEDGED BEFORE ME on
this the _______ day of ____________________, 20____.
Notary Public in and for the State of Texas
1 “Residential Construction” is now defined in the Texas Property Code at Section 53.001(9) and (10).
2 See Van Horn Trading Company v. Day 148 S.W.2d 1129 (Tex. Civ. App.-San Antonio 1912, no writ) and Hunt Developers, Inc. v. Western Steel Company 409 S.W.2d 443 (Tex. Civ. App.-Corpus Christi 1966, no writ).
3 See L & N Consultants, Inc. v. Sikes 648 S.W.2d 368 (Tex. Civ. App.-Dallas 1983, writ ref’d n.r.e.).
4 See Sugarland Business Center, Ltd v. Norman 624 S.W.2d 639 (Tex. Civ. App.-Houston [14th Dist] 1981, no writ).
5 See Tex. Const. Art. 16, §50 Vernon Sup. 1985); Callier v. Valley Bldg.. & Loan Ass’n. 62 S.W.2d 82 (1933); and Moray Corporation v. Griggs 713 S.W.2d 753 (Tex. Civ. App.-Houston 1986 writ ref’d).
6 See Floyd v. Rice 444 S.W.2d 834 (Tex. Civ. App.-Beaumont 1969, writ ref’d n.r.e.).
7 See Diversified Mortgage Investors v. Lloyd D. Blalock, General Contractor, Inc. 576 S.W.2d 794 (Tex. 1978).
8 James C. Bond v. Kagan-Edelman Enterprises, 985 S.W.2d 253 (Tx. App.–Houston [1st Dist.] 1999 no writ.