Using a Mechanic’s Lien to Get Your Money in Texas

Posted about 4 years ago. Applies to Texas, 3 helpful votes

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Texas Property Code, Chapter 53 (Private Property Mechanic's Liens) - Original Contractors

Those contractors who contract directly with an owner are termed "original contractors." Original contractors have both a Property Code lien and a Texas Constitution lien. An original contractor is not required to provide notice of non-payment to the owner. The original contractor must file its lien affidavit by the 15th day of the 4th month after the project was completed, abandoned or the original contract was terminated. The form of the lien affidavit may be found at The Construction Report web site: http://www.theconstructionreport.org The original contractor must provide by certified mail to the owner notice of lien filing within 5 days of submission of the lien to the county clerk for filing. There is no statutory deadline for the filing of an original contractor's Constitutional lien, although filing puts third parties on notice, and needs to beat the passing of the 4 year statute of limitations for debt.

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Texas Property Code, Chapter 53 - Subcontractors and Suppliers to the Original Contractor

A subcontractor or supplier to an original contractor only has two sources of funds that it may collect from the owner: trapped funds and retainage. Trapped funds are those original contract funds that the owner has not yet paid to the original contractor at the time that the owner receives a funds trapping notice from the claimant. The form of the funds trapping notice may be found at The Construction Report web site: http://www.theconstructionreport.org Texas law requires that the owner retain 10% of the original contract amount in retainage until 30 days after the project is fully completed. If the owner has paid out 90% of the original contract funds to the original contractor before receiving a funds trapping notice, the owner has no liability for such payments. Likewise, if the owner waits 30 days after project completion to pay out the retainage, the owner has no liability to lien claimants. The owner's property is security for payment, and is not independently liable.

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Texas Property Code - Chapter 53 - Specially Fabricated Materials

To perfect a claim for specially fabricated items, the claimant must send a notice to the owner (and to the original contractor if dealing with a subcontractor or another supplier) not later than the 15th day of the second month following the month in which the order was received and accepted (the form of this notice may be found at The Construction Report web site: http://www.theconstructionreport.org ) and when material is delivered, give the funds trapping notice described above.

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Texas Property Code - Chapter 53 - Enforcement of Mechanic's Lien

To enforce a mechanic's lien claim, you must file suit within two years after the date of filing your affidavit claiming lien or within one year after completion of the prime/original contract, whichever is later. These time limits are strict. For a claim against a payment bond, the time limit is one year after the date of the bond claim. For more detail, see The Construction Report web site: http://www.theconstructionreport.org )

Additional Resources

The Construction Report web site (http://www.theconstructionreport.org) contains the full text of Texas mechanic's and materialman's lien statutes, notice forms, deadline charts, the current and back issues of The Construction Report newsletter, and maybe best of all, lawyer jokes.

The Construction Report

Quilling, Selander, Cummiskey & Lownds, P.C.

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