Texas Lien Law FAQs

If you’re a contractor, subcontractor, or supplier in Texas, navigating lien laws can be daunting. Knowing your rights and deadlines is crucial for securing payments and protecting your interests. This guide delves into critical topics such as lien filing deadlines, what to do if you lack a formal contract, and the nuances of Texas property lien laws. For personalized assistance with your lien issues, consider consulting with an experienced legal professional.

Here are some Texas lien law frequently asked questions about the notice requirements for mechanic’s liens, tailored to provide clarity and guidance for construction professionals.

Notice FAQs on Private Projects

1. Who needs to send Texas notices on private projects?

For contracts entered into on or after January 1, 2022, general contractors generally do not need to give preliminary notice, except on residential projects where a disclosure statement and a list of subcontractors and suppliers must be provided to the owner, unless this requirement is waived in writing.

Subcontractors and suppliers are required to send monthly notices to the property owner and general contractor in the second and/or third months after providing labor or materials. Special notice requirements apply for claims on contractual retainage.

Accordingly, for contracts entered into before January 1, 2022, suppliers of specially fabricated materials must send notice to secure lien law rights for undelivered or unincorporated materials.

2. When is the deadline to send a notice in Texas?

Basically, for contracts entered into on or after January 1, 2022, several deadlines apply:

• The homeowner disclosure statement must be provided before contract execution or included in the contract.
• Commercial project monthly notices must be sent by the 15th day of the third month after labor or materials are furnished.
• Residential project monthly notices must be sent by the 15th day of the second month after labor or materials are furnished.
• Notice of Claim for Unpaid Retainage must be sent by the earlier of 30 days after the claimant’s contract completion, termination, or abandonment, or the original contract’s termination or abandonment.

For contracts entered into before January 1, 2022, the deadlines for monthly notices and specially fabricated materials notices are similar, with specific rules depending on the hiring party.

3. Who do I send a Texas preliminary notice to?

For contracts entered into on or after January 1, 2022, the homeowner disclosure statement must be given to the property owner for residential projects. Monthly notices must be sent to both the property owner and the general contractor, and the Notice of Claim on Unpaid Retainage must also go to both parties.

For contracts entered into before January 1, 2022, commercial project monthly notices must be sent to the general contractor and, in some cases, both the owner and the general contractor. Notices for specially fabricated materials and contractual retainage should be sent based on the hiring party’s relationship with the general contractor.

4. What information is required on Texas notices?

For contracts entered into on or after January 1, 2022, the homeowner disclosure notice must include statutory language as specified in Tex. Prop. Code §53.255. Monthly notices should include detailed information such as the date, project description, claimant’s name and address, description of labor/materials provided, original contractor’s name, hiring party’s name, claim amount, and specific notice language for homestead projects. The Notice of Claim for Unpaid Retainage must include similar details tailored to the retainage claim.

For contracts entered into before January 1, 2022, monthly notices should contain information such as the claimant’s name and address, the property owner’s name and address, the hiring party’s name and address, a brief description of labor/materials furnished, and a property description.

5. How should notices be sent in Texas?

Generally, notices should be sent by certified mail. If delivered by hand, ensure proper documentation of delivery.

Is a Texas notice considered served when sent or when received?

Notices are considered served upon mailing if sent by registered or certified mail, according to Texas Property Code § 53-003(c). Thus, this means that the requirement is fulfilled when the notice is deposited in the mail.

What happens if I send a Texas lien notice late?

For contracts entered into on or after January 1, 2022, late notices generally result in the inability to file a mechanic’s lien claim for the missed amounts. However, missing deadlines for unpaid retainage notices may not always be fatal if amounts were included in prior notices.

For contracts entered into before January 1, 2022, missing deadlines for notices of specially fabricated materials limits claims to delivered and used materials only.

Notice FAQs on Public Projects

1. Who needs to send notices on public projects?

• Payment Bond Monthly Notices: Claimants without a direct contractual relationship with the prime contractor must send preliminary notices.
• Notice of Contractual Retainage and Specially Fabricated Materials: Required for claimants not directly contracted with the prime contractor.

2. When is the deadline to send a notice in Texas?

• Payment Bond Monthly Notices: First-tier claimants by the 15th day of the third month; second-tier claimants by the 15th day of the second and third months.
• Notice of Contractual Retainage: No later than 90 days after the public work contract’s final completion.
• Notice of Specially Fabricated Materials: By the 15th day of the second month after receiving and accepting the order.

3. Who do I send a Texas preliminary notice to?

Payment bond monthly notices must be sent to the prime contractor and the surety. Notices for contractual retainage and specially fabricated materials must be sent to the prime contractor who posted the payment bond and the surety, if applicable.

4. What information is required on Texas notices?

• Payment Bond Monthly Notices: Include a sworn statement of account.
• Notice of Contractual Retainage: State the retainage requirement, contract amount, paid-to-date amount, and outstanding balance.
• Notice of Specially Fabricated Materials: State the order receipt and acceptance.

5. How should notices be sent in Texas?

Notices must be sent by registered or certified mail to the contractor’s and surety’s addresses. Hand delivery is permissible with proper documentation.

6. Is a Texas notice considered served when sent or when received?

The notice requirement is satisfied upon mailing in the proper method and to the correct address, with no specific requirement for actual receipt.

7. What happens if I send a Texas lien notice late?

• Payment Bond Monthly Notices: Late notices result in lost bond claim rights for that month’s labor or materials.
• Notice of Contractual Retainage: Inability to claim unpaid retainage against the payment bond.
• Notice of Specially Fabricated Materials: No claim for undelivered or unincorporated specially fabricated materials.

Texas Lien Law Waivers FAQs

Here are some frequently asked questions about lien law waivers in Texas, with answers provided by our experienced construction attorneys at Lien Lawyers.

1. Does Texas require a specific statutory lien waiver form?

Yes, Texas has statutory lien waiver forms that must be used to ensure the waivers are valid and enforceable.

2. Do lien waivers need to be notarized in Texas?

Currently, yes. A Texas lien waiver must be signed and notarized to be valid. This requirement is one of the more stringent in the country. However, for original contracts entered into on or after January 1, 2022, notarization is no longer required.

3. When do Texas lien waivers become binding?

The binding nature of lien waivers in Texas depends on their type:

• Conditional Lien Waivers: These become binding once there is evidence of payment.
• Unconditional Lien Waivers: These are binding upon signing. However, Texas lien law prohibits requesting an unconditional waiver before payment is actually made.

4. Can lien rights be waived by contract?

No, Texas lien law specifically prohibits no-lien clauses or other contract provisions that waive lien rights before work is performed. According to Texas Property Code § 53.281 et seq., any waiver or release of a lien or payment bond claim is unenforceable unless executed and delivered according to the subchapter’s provisions. This includes ensuring payment has been made for conditional releases and received for unconditional releases.

5. Can lien rights be waived in advance of payments, furnishing work, or furnishing materials in Texas?

As stipulated in Texas law, lien waivers are not enforceable before payment. A conditional waiver requires evidence of payment, and an unconditional release requires actual receipt of payment. However, there is an exception for settlement agreements. Texas lien law allows for flexibility in waiving claims as part of a settlement, even if the statutory requirements for lien waivers are not strictly met.

6. Do Texas lien waiver requirements apply to every project?

There is an exception for single-family houses, townhouses, or duplexes. For these types of projects, a lien waiver may be included in the written original contract. For all other project types, the statutory forms must be used.

7. Do Texas lien waivers waive all of my rights?

The extent of rights waived depends on the form used:

• Progress Payment Waivers: These include a section that states the waiver and release is limited, excluding unpaid retention, pending modifications, and changes, or items furnished after the indicated date on the waiver.
• Final Payment Waivers: These forms waive all mechanics’ lien rights and any claims for payment.

For more detailed guidance on lien waivers in Texas or any other construction-related legal matters, feel free to contact our knowledgeable attorneys at Lien Lawyers. We’re here to help ensure your rights and interests are protected throughout your projects.

Texas Bond Claim FAQs

Here are some frequently asked questions about bond claims in Texas, with insights provided by our expert construction attorneys at Lien Lawyers.

1. Who is protected under Texas Bond Claim Laws?

On public projects in Texas, claims can be made against the bond, contract funds, or trust funds held by the general contractor or subcontractor. The parties allowed to recover through each claim type are:

• Bond Claims: Parties providing labor and/or materials to a general contractor, subcontractor, or sub-subcontractor.
• Contract Funds Claims: Providers of labor and/or materials when the original contract is less than $25,000.
• Trust Funds Claims: Contractors, subcontractors, laborers, or material suppliers. Note: No final notice is required for trust fund claims, allowing you to proceed directly to a lawsuit.

2. When is the deadline to file a Texas Bond Claim?

Texas bond claims are unique because they are made regularly rather than as a single claim. Here are the deadlines:

• Bond Claims: Must be mailed by the 15th day of the 3rd month after each month in which labor and/or materials were provided and remain unpaid. If the 15th falls on a weekend or holiday, the notice should be given before that date. Claims on retainage must be mailed within 90 days after the contract’s completion.
• Contract Funds Claims: Must be sent by the 15th day of the 2nd month following each month of unpaid labor and/or materials. It’s best to send the notice early to ensure receipt by the 15th.

3. Who should receive the Texas Bond Claim?

• Bond Claims (and claims on retainage): Must be sent to both the general contractor and the surety.
• Contract Funds Claims: Should be sent to the public official responsible for paying the general contractor and to the general contractor.

4. When is the deadline to initiate a lawsuit, or how long is my Texas Bond Claim effective?

• Bond Claims: Legal action must be initiated more than 60 days after giving notice but within 1 year of the notice or project completion, whichever comes first.
• Contract Funds Claims: Legal action must be initiated within 6 months after the contractor files a bond with the public official.

5. What must the Texas Bond Claim include?

The requirements depend on whether a written contract exists:

• With a Written Contract:
  • A sworn statement of account confirming the amount claimed is just and correct, including any applicable credits.
  • Any retainage that hasn’t become due.
  • Optional: A copy of the written agreement and a statement of the completion or partial completion value.
• Without a Written Contract:
  • The name of the party for whom labor/materials were furnished.
  • Date of furnishing.
  • Description of labor/materials provided.
  • Amount due.
  • Itemized claim details, including invoices or documents.
• Claims on Retainage:
  • Contract amount.
  • Amount paid.
  • Outstanding balance.
  • Possibly: Description of labor/materials, hiring party, date of furnishing, and contract type (written or oral).
• Claims on Contract Funds:
  • Amount claimed.
  • Hiring party.
  • Date and place of furnishing.
  • Description of labor/materials provided.
  • Project description.
  • Claimant’s business address.
  • A sworn statement that the amount claimed is correct, with all credits allowed.

6. How must the Texas Bond Claim be sent?

All types of public claims must be sent by registered or certified mail, with return receipt requested. The statute only requires that the claim is sent, not that it is received. For further assistance or more detailed guidance on filing bond claims in Texas, contact our experienced team at Lien Lawyers. We’re here to help ensure your claims are handled correctly and your rights are protected.

Texas Prompt Payment FAQs

Here are some frequently asked questions about prompt payment laws in Texas, with insights provided by our expert construction attorneys at Lien Lawyers.

1. How do I qualify for prompt payment penalties in Texas?

To qualify for prompt payment penalties under Texas lien law, you must be entitled to payment according to your contract and must submit a pay request. If you pursue a prompt payment claim and succeed, you may also be awarded attorneys’ fees.

2. How long does a contractor have to pay a subcontractor in Texas?

The payment deadline varies by project type:

• Residential or Commercial Projects: General contractors must pay their subcontractors and suppliers within 7 days of receiving payment from the property owner.
• State or Municipal Projects: General contractors have 10 days to pay their subcontractors after receiving payment from the public agency.

3. Does the Prompt Payment Act apply to subcontractors?

Yes. All parties on a construction project must adhere to the deadlines set by Texas’ Prompt Payment Act:

• Private Construction Projects: Subcontractors have 7 days to pay their subs and suppliers after receiving payment from their hiring party.
• Public Construction Projects: Subcontractors have 10 days to make payments.

4. What can I do if I’m not paid on time on a Texas construction project?

If you’re not paid on time, you have several options:

• Stop work until payment is received.
• Make a claim under the prompt payment laws.
• File a Texas mechanics lien (for private projects).
• Make a bond claim (for public projects).

5. Can I include prompt payment penalties in a Texas mechanics lien or bond claim?

No, Texas does not allow miscellaneous amounts, including prompt payment interest penalties, to be included in a mechanics lien or bond claim. To recover interest, you need to file a prompt payment claim in court.

6. When does prompt payment interest begin to accrue in Texas?

Interest on late payments begins to accrue once the payment is late according to the prompt payment statutes. The exact start date and amount of interest are not specifically defined by Texas law.

7. How do I recover interest or other prompt payment penalties in Texas?

To recover interest penalties, you typically need to file a prompt payment claim. Sending a Prompt Payment Demand Letter or a Notice of Intent to Make a Prompt Payment Claim can often prompt faster payment and include the interest penalty to avoid further legal expenses and time.

8. Are there reasons for which payment may be withheld past the general deadline?

Yes, payments can be withheld for specific reasons:

• Private Projects:
  • Evidence showing the project won’t meet the completion date due to unsatisfactory progress.
  • Third-party claims or reasonable evidence of such claims related to the contract work.
  • Failure to make timely payments for labor, equipment, subcontractors, or materials.
• Public Projects:
  • A bona-fide dispute over the amount due.
  • Prohibition from making a timely payment due to federal grant or regulation requirements.
  • Improper mailing of the invoice per purchase order instructions.

If payments are wrongfully withheld, you can make a prompt payment claim to collect the unpaid amount plus interest. For further assistance or detailed guidance on prompt payment laws in Texas, contact our experienced team at Lien Lawyers. We’re here to help ensure your claims are handled correctly and your rights are protected.

Texas Retainage Private Projects FAQs

1. What types of private projects are subject to Texas’ retainage lien law?

Texas retainage lien law applies to all private construction projects where a mechanics lien can be claimed.

2. Does Texas limit the amount of retainage that can be withheld from a contractor?

Yes, on private construction projects, no more than 10% of the total contract price (or reasonable value of the work if there’s no contract price) can be withheld as retainage.

3. Does Texas require retained funds to be deposited in a special account? Can securities be substituted?

There is no requirement to deposit retained funds in a special account, nor is there an allowance for substituting securities in lieu of retainage. These details are governed by the contract between the parties.

4. How long can a party withhold retainage in Texas?

Retainage can be withheld for up to 30 days after the work is completed.

5. Is there a specific notice required to recover retainage in Texas?

Yes, claimants must provide a Notice of Contractual Retainage to the property owner (and the general contractor if hired by a subcontractor) no later than the 30th day after the claimant’s contract is completed, terminated, or abandoned, or the original contract is terminated or abandoned.

6. How can I make a claim to recover retainage in Texas?

To recover retainage, an affidavit of lien must be filed no later than 30 days after the earlier date the work is completed, or the original contract is terminated or abandoned. Alternatively, the lien must be filed by the typical lien filing date as set out under §53.052, the 40th day after the date listed on an Affidavit of Completion (if the owner gave timely notice), or the 30th day after the owner sent a written demand to file an affidavit of lien.

Texas Retainage Public Projects FAQs

1. What types of public projects are subject to Texas’ retainage laws?

The laws apply to all public construction projects valued at $400K or more, excluding contracts made by the Texas Department of Transportation under Chapter 223, projects receiving financial assistance under the Texas Water Code, or wholesale water suppliers governed by Chapter 49 of the Texas Water Code.

2. Does Texas limit the amount of retainage that can be withheld from a contractor?

Yes, the limit varies by project type and value:

• Public works contracts valued at less than $5M or related to dams: No more than 10% of the total contract price.
• Public works contracts valued at $5M or more: No more than 5% of the contract price.

3. How long can a party withhold retainage in Texas?

Typically, retainage can be withheld until the project reaches substantial completion as defined in the contract. Entities may continue withholding retainage if there is a bona fide dispute or if the surety for a bond does not agree to release retainage.

4. Does Texas require retained funds to be deposited in a special account? Can securities be substituted?

Generally, no special account is required. However, for competitively awarded contracts valued at $10M or more, the public entity and the original contractor may agree to place the withheld funds in an interest-bearing account.

5. Is there a specific notice required to recover retainage in Texas?

Yes, to make a claim against the payment bond for retainage, claimants must serve a written notice on the prime contractor and the surety no later than 90 days after project completion.

6. How can I make a claim to recover retainage in Texas?

To enforce a claim for retainage, follow the deadline for payment bond claims: initiate action more than 60 days after sending the notice of claim but less than one year after serving the notice. For personalized assistance with retainage laws in Texas, contact Lien Lawyers. Our experienced team can help ensure your claims are properly managed and your rights are protected.

Texas Construction Contracts FAQs

1. Can you waive lien rights by contract in Texas?

No, contractors cannot waive lien law rights by contract in Texas. Any contract, agreement, or understanding that attempts to waive the right to file or enforce any lien or claim created under this chapter is void as against public policy.

2. How does Texas treat pay-if-paid and pay-when-paid clauses?

• Pay-if-paid clauses: These clauses are generally enforceable if they clearly, unequivocally, and expressly shift the risk of non-payment. However, they are unenforceable in contracts solely for design services, civil engineering projects, and improvements to certain residential properties. Additionally, these clauses will not be enforced if certain contractual obligations are not met, if the contingent payee objects, if there’s a sham relationship with the obligor, if enforcement is unconscionable, or if used to invalidate mechanics lien law rights.
• Pay-when-paid clauses: These clauses are enforceable in Texas but only act as a timing mechanism. The obligation to pay still exists despite the owner’s failure to pay the general contractor.

3. Are no-damages-for-delays clauses enforceable in Texas?

Yes, these clauses are generally enforceable. However, there are exceptions if the a delay:

• Was not intended or contemplated by the parties.
• Resulting from fraud, misrepresentation, or other bad faith.
• Extended for an unreasonable length of time.
• Was not specifically enumerated in the clause.
• Was due to active interference or wrongful conduct.

4. Can you contract around Texas’ prompt payment terms?

No, the timing of payments under Texas prompt payment laws cannot be modified by contract. On private projects, payments from the property owner must be made within 35 days after receipt of the invoice, with subsequent payments down the payment chain made within 7 days. On public projects, payments to the prime contractor must be made within 30 days of receipt of goods/services or an invoice, with subsequent payments made within 10 days down the payment chain.

5. Can you contract around Texas’ retainage requirements?

Basically, it depends on the type of project:

• Private projects: The owner must retain 10% of the total contract price or the reasonable value of the work, which cannot be modified by agreement.
• Public projects: For projects valued under $5M, no more than 10% may be withheld. For projects valued at $5M or more, retainage is capped at 5%. Public entities may release retainage upon project completion or substantial completion of portions of the project.

6. Does Texas have any specific requirements for construction contracts?

While there are no general specific requirements for construction contracts, contracts for the improvement of residential property must include certain protections for homeowners, such as the Texas Residential Disclosure Statement, a list of subs and suppliers, and a notice regarding defects and the opportunity to cure.

7. How long do I have to bring a breach of contract claim for nonpayment in Texas?

The statute of limitations to initiate a lawsuit for a breach of contract claim for nonpayment is 4 years from the date the breach occurred, regardless of whether the contract is oral or written.

For personalized assistance with construction contracts in Texas, contact Lien Lawyers. Our experienced team can help ensure your contracts comply with Texas lien law and your rights are protected. Begin your lien today!

How Long Does a Contractor Have to File a Lien in Texas?

In Texas, contractors, subcontractors, and suppliers must adhere to specific deadlines to file a lien, ensuring they protect their rights to payment for services rendered or materials supplied.

Residential Projects

For residential projects, the primary deadline for contractors to file a lien is the 15th day of the third month following the completion of the work. This means if your work is finished in January, you have until April 15 to file your lien. However, it’s crucial for subcontractors and suppliers to be aware of the pre-lien notice requirements, which typically involve providing written notice to the property owner by the 15th day of the second month after your work is completed. This pre-lien notice is vital as it helps establish your right to file a lien later.

Commercial Projects

In contrast, for commercial projects, contractors have a longer deadline: they must file a lien by the 15th day of the fourth month after the project completion. Similar to residential projects, subcontractors and suppliers must also adhere to pre-lien notice requirements, ensuring they notify the property owner within the established timeframes.

Importance of Pre-Lien Notices

Failing to file pre-lien notices can have serious repercussions. Subcontractors and suppliers who miss these deadlines may lose their lien rights altogether, making it nearly impossible to recover unpaid amounts. The consequences of missing the lien filing deadlines are significant, potentially leading to financial losses and unresolved payment disputes.

To ensure you meet all necessary deadlines and requirements, it’s advisable to consult legal experts who can guide you through the process and help you file your lien correctly. Understanding how long a contractor has to file a lien in Texas is essential for protecting your financial interests and maintaining your rights.

2024 Texas Lien Law Deadlines

As we move into 2024, it’s important to stay updated on lien filing deadlines in Texas, which have specific requirements for different types of projects. Recent changes in legislation may also affect how these deadlines are applied.

Deadlines for Residential Projects

For residential projects, the deadlines remain consistent with prior years. Contractors must file their lien by the 15th day of the third month after completing the work, while subcontractors and suppliers should submit pre-lien notices by the 15th day of the second month.

Deadlines for Commercial Projects

For commercial projects, the timeline shifts slightly. Contractors must file their liens by the 15th day of the fourth month after project completion. It’s essential to understand that this extended period differs from residential projects, emphasizing the need for careful planning and time management.

Importance of Accuracy and Timeliness

Timeliness is crucial when filing liens, as missing these deadlines can result in losing the right to lien altogether. Additionally, any inaccuracies in your filings can lead to complications and legal challenges down the line. Preliminary notices and intent-to-lien documents should be filed promptly to maintain the validity of your claims.

Failure to adhere to these 2024 Texas lien law deadlines could hinder your ability to recover unpaid debts. Therefore, securing legal assistance early can help you navigate these deadlines effectively.

Can a Contractor File a Lien Without a Contract in Texas?

One common question contractors often ask is, “Can a contractor file a lien without a contract in Texas?” The answer is nuanced and depends on several factors, including the nature of the agreement and the work performed.

Overview of Texas Lien Laws

Under Texas lien laws, having a written contract is generally a prerequisite for establishing lien rights. However, there are exceptions to this rule. Implied contracts, which arise from the circumstances surrounding the work or verbal agreements, can sometimes afford contractors the ability to file a lien, even without a formal written contract.

Understanding Implied Contracts

Implied contracts are recognized under Texas law when a contractor provides services or materials that benefit the property, even if there’s no signed agreement. In such cases, the contractor may still have the right to file a lien, provided they can substantiate their claim with adequate evidence, such as emails, text messages, or other forms of communication that outline the agreement.

Circumstances for Filing Without a Written Contract

Contractors might successfully file a lien without a written contract in situations like:

• Verbal Agreements: If a contractor has a verbal agreement with the property owner and can prove the work was completed as agreed.
• Work That Enhances Property Value: If the contractor’s work substantially benefits the property, this may bolster their claim to file a lien.

Importance of Documentation

Regardless of whether a contract is written or implied, maintaining thorough documentation is critical. Records of communications, invoices, and other relevant paperwork can significantly enhance a contractor’s ability to enforce a lien claim.

In summary, while the absence of a written contract can complicate the process of filing a lien in Texas, it is not necessarily a barrier. Understanding the legal nuances and maintaining proper documentation are key steps for contractors looking to secure their rights.

Understanding Texas lien laws is essential for contractors, subcontractors, and suppliers looking to protect their financial interests. By knowing how long contractors have to file a lien in Texas, adhering to the 2024 Texas lien law deadlines, and recognizing the potential to file a lien without a formal contract, you can navigate the complexities of the lien process more effectively.

If you find yourself facing challenges with unpaid invoices or lien filings, don’t hesitate to reach out to legal professionals experienced in Texas lien laws. They can provide the guidance you need to secure your rights and navigate any disputes that may arise. Don’t let missed deadlines or lack of contract hinder your ability to recover what you’re owed—consult an expert today!

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