Chapter 21 

Involuntary Mechanic’s Lien Documents

§ 21.1Texas Constitutional Lien

§ 21.1:1Generally

This chapter discusses primarily statutory mechanic’s liens and provides related forms based on Tex. Prop. Code ch. 53. The Texas Constitution provides a separate constitutional lien in addition to the statutory mechanic’s lien provided in the Texas Property Code. Tex. Const. art. XVI, § 37.

The constitutional lien requires no special notice to owners. It is considered self-enacting and arises solely from the claimant’s performance of the work. Two important features of constitu­tional liens should be noted: first, they arise only in favor of “original contractors” (persons with contracts directly with the owner of the property interest improved), and second, bona fide pur­chasers or lienholders without notice of the con­stitutional lien claim do not take subject to it.

Even though the constitutional lien is considered self-enacting, as a practical matter the claimant must take some action to put the world on notice of the lien claim before an intervening sale or other encumbrance of the property. Such notice might be given either by filing an affidavit claiming the lien in the real property records in the county in which the property is located or by filing suit and lis pendens notice. See Tex. Prop. Code § 12.007.

The forms presented in this chapter are for docu­menting statutory rather than constitutional lien claims. Forms 21-4 and 21-16, however, could be adapted for use in filing notice of a constitu­tional claim. For the constitutional lien affidavit, a phrase may be included in paragraph 8. of the form specifically referring to the constitutional lien, Tex. Const. art. XVI, § 37. Paragraph 6. can also be changed to reflect the fact that the claimant is the original contractor (for example, “Claimant is also the original contractor on the above-referenced project”). No special form of notice is required; the claimant is merely placing constructive notice of the constitutional lien claim in the real property records by filing the affidavit. Of course, as a practical matter, the claimant should send a copy of the filed affida­vit or lis pendens to the owner.

Informational Note on 2021 Texas House Bill 2237:      On January 1, 2022, Texas House Bill 2237 took effect, making a series of changes to the law governing involuntary mechanic’s lien documents. Specifically, House Bill 2237 repealed several sections of the Property Code, expanded defined terms, consolidated notice requirements, replaced statutory retainage with statutory reservation, and promulgated new notice and disclosure forms.

House Bill 2237 provides that it exists concur­rently with prior law based on the date an origi­nal contract is entered into. Section 37 of House Bill 2237 provides, “The changes in law made by this Act apply only to an original contract entered into on or after the effective date of this Act. An original contract entered into before the effective date of this Act is governed by the law as it existed immediately before the effective date of this Act, and that law is continued in effect for that purpose.” As a result, this com­mentary covers the law as it applied before Sep­tember 1, 2011; from September 1, 2011, to December 31, 2021; and on or after January 1, 2022. Where necessary, this chapter distin­guishes between requirements based on effec­tive dates.

Attorneys are cautioned to carefully determine which version of the statute applies to a particu­lar transaction.

§ 21.1:2Homestead Considerations

Necessity for Written Contract to Improve Homestead:      No involuntary mechanic’s lien may attach to homestead property unless the homestead owner and the contractor sign a qual­ifying written contract for the improvements. This requirement applies to both constitutional and statutory mechanic’s liens. The qualifying written contract for the improvements must sat­isfy certain constitutional and statutory require­ments. Tex. Const. art. XVI, § 50(a)(5); Tex. Prop. Code §§ 41.001, 53.254; Cavazos v. Munoz, 305 B.R. 661 (S.D. Tex. 2004). The required elements of a qualifying contract to improve the homestead are discussed in section 20.1:2 in this manual.

While the underlying written contract for the improvements is a prerequisite to the existence of an involuntary mechanic’s lien against the homestead, it is not the source of the lien. Rather, the lien arises from the performance of work by the claimant and (in the case of a statu­tory lien) the satisfaction of certain requirements necessary to perfect the lien.

Subcontractors do not have to sign the written contract to improve the homestead. Its lien qual­ifying effects vicariously inure to the benefit of all subcontractors and materialmen who furnish labor or materials through the original contrac­tor. Tex. Prop. Code § 53.254(d).

Required Admonitions for Statutory Mechanic’s Liens against Homestead:      As a general rule, a statutory mechanic’s lien against the homestead may be perfected in the same manner prescribed for all such liens. However, in addition to the general requirements of chap­ter 53 of the Property Code, there are special admonitions required to be given by the lien claimant to the homestead owner that are unique to involuntary mechanic’s liens against the homestead. For a discussion of these special admonitions refer to section 21.5:1 below.

§ 21.2General Considerations for Statutory Liens

Texas courts consistently have followed two interpretive principles in evaluating the validity of involuntary mechanic’s lien claims. First, the mechanic’s lien statutes are to be liberally inter­preted for the purposes intended, to provide lien claimants security for their labor and materials furnished on construction of improvements on real property. First National Bank v. Whirlpool Corp., 517 S.W.2d 262 (Tex. 1974). Second, however, the time deadlines for sending required notices and filing the mechanic’s lien affidavit are critical. Missing the notice deadline or mechanic’s lien filing deadline is fatal to the mechanic’s lien in almost every instance. See First National Bank v. Sledge, 653 S.W.2d 283 (Tex. 1983).

Residential Construction:      If a construction project is on residential property, the claimant must comply with the provisions of Tex. Prop. Code ch. 53, subch. K, in addition to the other statutory requirements. The portions of subchap­ter K that relate to involuntary liens are dis­cussed or cited in the following sections of these practice notes. Residential projects are defined for purposes of the mechanic’s lien statute as construction or repair of a single-family house, duplex, triplex, quadruplex, or unit in a multi-unit structure used for residential purposes that is owned by one or more adult persons and is used or intended to be used as a dwelling by one or more of its owners. Tex. Prop. Code § 53.001(8), (9), (10). For original contracts entered into on or after January 1, 2022, the definition of residence also includes condomini­ums and cooperatives. See Tex. Prop. Code § 53.001(8).

§ 21.3Construction Project Participants

To understand the rights and time deadlines for notice according to the statute, the attorney must first understand how the claimant fits into the chain of parties on the project: owner, original contractor, subcontractor, and supplier. Notice requirements fall into three basic categories based on the definitions of participants on a con­struction project.

§ 21.3:1Original Contractor

An original contractor is a person or entity con­tracting with the owner of the interest in the real estate being improved—either directly or through an agent for the owner. An original con­tractor creates a statutory lien against the prop­erty by filing a lien affidavit with the county clerk of the county in which the property is located and sending a copy of the affidavit to the owner of the property. Original contractors have no notice requirements other than sending a copy of the affidavit claiming the mechanic’s lien to the owner. See Tex. Prop. Code § 53.052. As discussed in section 21.1 above, original contractors also have a constitutional lien.

§ 21.3:2First-Tier Subcontractors and Suppliers

First-tier subcontractors or suppliers have a sub­contract, purchase order, or other agreement directly with the original contractor. In addition to filing a lien affidavit, they must provide notice of unpaid claims to the owner to create mechanic’s lien rights. This notice authorizes the owner to withhold payment from the con­tractor to pay the claims. A copy of the notice of unpaid claims must be sent by certified mail to the original contractor. Tex. Prop. Code §§ 53.056, 53.081, 53.252. For original con­tracts entered into on or after January 1, 2022, a copy of the notice may be given in person to the party entitled to the notice or to that party’s agent, by certified mail, or by any other form of traceable, private delivery or mailing service that can confirm proof of receipt. Tex. Prop. Code § 53.003. This statutory procedure is referred to as the trapping of funds.

§ 21.3:3Second-Tier and Lower-Tier Subcontractors and Suppliers

Second-tier and lower-tier subcontractors or suppliers have subcontracts or agreements with a first-tier, second-tier, or lower-tier subcontrac­tor. In other words, they have no contract with the original contractor. Therefore, they are required to give notice to the original contractor in addition to sending the same notice described in section 21.3:2 above to the owner as a prereq­uisite to perfecting a valid mechanic’s lien. Tex. Prop. Code §§ 53.056, 53.252(b).

For original contracts entered into on or after January 1, 2022, second- and lower-tier contrac­tors are only required to send one notice to both the owner or reputed owner and the original contractor. Tex. Prop. Code § 53.056.

The mechanic’s lien rights to trapped funds and retainage or reserved funds are the same for sec­ond-tier and lower-tier subcontractors as for first-tier subcontractors and suppliers. In this chapter all second- and lower-tier subcontractor and supplier claimants will be referred to as “second-tier” claimants.

§ 21.4Owner Liability for Mechanic’s Lien Claims

§ 21.4:1Original Contractors

Owners are liable for the amount of the mechanic’s lien perfected by original contrac­tors. Disputes may exist about the underlying merits of claims for the amount of indebtedness owed to the original contractor. However, own­ers are liable to pay the face amount of original contractor perfected mechanic’s lien claims, if the amount is owed.

§ 21.4:2Derivative Claimants: First- and Second-Tier Claims, Statutory Retainage, Statutory Reservation, and Fund Trapping

Informational Note:      Before the implementa­tion of Texas House Bill 2237, the term “retain­age” referred to an owner’s obligation to withhold 10 percent of the contract price or value of the work from payments to the contrac­tor to avoid liability for the settlement of unpaid claims. House Bill 2237 changed that term to “reservation,” leaving only provisions that address contractual retainage. Because both terms exist concurrently depending upon when a contract was entered into, this chapter makes references to or distinctions between them throughout.

The owner’s liability to both first- and second-tier subcontractor or supplier lien claimants is the sum of two amounts described in Tex. Prop. Code § 53.084. First, an owner is liable for the mandatory 10 percent reservation or 10 percent statutory retainage that owners are required to withhold from the original contractor on every nonbonded construction job. Tex. Prop. Code §§ 53.101–.103; Page v. Structural Wood Com­ponents, 102 S.W.3d 720, 722 (Tex. 2003). In addition, an owner is liable for “fund trapping,” which means “trapping” or withholding remain­ing contract funds otherwise owed to the origi­nal contractor once the owner receives a mechanic’s lien notice letter (Tex. Prop. Code § 53.056) containing language telling the owner to withhold payment from the contractor for the claim amount or, for original contracts entered into on or after January 1, 2022, if the notice provided pursuant to section 53.056 does not claim unpaid retainage, a section 53.057 notice. If an owner receives a lien notice letter contain­ing the required fund-trap warning but fails to withhold payment from the contractor, the owner is personally liable and his property sub­ject to a lien for such amounts paid out in spite of receipt of such notice. This fund trapping lia­bility is in addition to the owner’s liability for the 10 percent reservation or 10 percent statu­tory retainage.

Aiken v. State, 36 S.W.3d 131 (Tex. App.—Austin 2000, no pet.), provides a good example of owner liability for fund trapping and retain­age. Aiken involved criminal prosecution of a contractor on a residential construction project. The contractor was accused of taking a bank loan advance for the construction and misapply­ing the funds by not using them to pay project bills due on the job. This is ordinarily a violation of chapter 162 of the Texas Property Code (the Texas Construction Trust Funds Act). However, in this case, the prosecution chose to pursue a conviction under Texas Penal Code section 32.45, misapplication of fiduciary property. One of the elements of this offense is to prove that the defendant dealt with property of the victim in a manner that involves substantial risk of loss to the owners. In this case, because the owners had withheld 10 percent retainage, the court determined that the owners suffered no substan­tial risk of loss. Their liability was limited to the 10 percent retainage since no funds had been trapped by lien claimants, as described above. The case provides a good example of how owner liability is calculated.

To summarize, owners have to withhold or “trap” funds they otherwise owe the contractor on receipt of a proper lien notice letter. In addi­tion, owners must withhold 10 percent reserva­tion or 10 percent retainage from the original contractor throughout the duration of the proj­ect. If owners fail to trap funds or retain the 10 percent reservation or 10 percent retainage throughout the course of the job, they are never­theless liable for such amounts they should have withheld.

§ 21.5Instructions for Completing Forms

§ 21.5:1Affidavit Claiming Lien

Original contractors and first- and second-tier subcontractors and suppliers create a statutory mechanic’s lien against property by filing a lien affidavit with the county clerk of the county in which the property is located and sending a copy of the affidavit to the owner of the property.

It is best to have the affidavit claiming mechanic’s and materialman’s lien, form 21-4 in this chapter, executed by a claimant with knowl­edge of the amount due on the account, the work performed, and the particular project involved. The mechanic’s lien affidavit is invalid unless it contains a jurat. Sugarland Business Center, Ltd. v. Norman, 624 S.W.2d 639, 641 (Tex. App.—Houston [14th Dist.] 1981, no writ). See forms 21-4 and 21-16 in this chapter.

Paragraph 4. of forms 21-4 and 21-16 must state the type of labor performed and materials fur­nished.

The legal description of the property, sufficient to distinguish it from other tracts in the area, is required in paragraph 7. of forms 21-4 and 21-16. The lien applies to the original tract at the time construction commenced. Subsequent con­veyances of parts of the property, even if con­veyed before the filing of the lien affidavit, are still subject to the lien. See Valdez v. Diamond Shamrock Refining & Marketing Co., 842 S.W.2d 273 (Tex. 1992).

The notice at the top of both forms states “Notice: This is not a lien. This is only an affidavit claiming a lien.” This notice is required to assert a mechanic’s lien against homestead property and must appear at the top of the page in a minimum of ten-point bold-faced type or equivalent. Tex. Prop. Code § 53.254(f).

Also, for first- and second-tier claimants (other than original contractors), the lien affidavit must contain a statement as to each month in which material was delivered or work performed (para­graph 4.) and a description of the date and method of giving required notice to the owner (paragraph 10.). Tex. Prop. Code § 53.054(a)(3), (a)(8).

A copy of the lien affidavit must be sent to the original contractor and the owner within five days of filing the affidavit. Tex. Prop. Code § 53.055. Forms 21-5 and 21-17 in this chapter are cover letters for this purpose. Failure to send the lien affidavit within the time prescribed has been held fatal to the validity of the lien. Cabin­tree, Inc. v. Schneider, 728 S.W.2d 395 (Tex. App.—Houston [1st Dist.] 1986, writ ref’d); but see Arias v. Brookstone, L.P., 265 S.W.3d 459 (Tex. App.—Houston [1st Dist.] 2007, pet. denied) (declining to follow dicta from Cabin­tree that notice must be given after the lien affi­davit has been filed).

§ 21.5:2Notice to Original Contractor by Second-Tier Claimant

Form 21-1 in this chapter must be sent to the original contractor and is self-explanatory. For original contracts entered into before January 1, 2022, this notice must be sent by certified mail. For original contracts entered into on or after January 1, 2022, this notice may be given in per­son to the party entitled to the notice or to that party’s agent, by certified mail, or by any other form of traceable, private delivery or mailing service that can confirm proof of receipt. Tex. Prop. Code § 53.003. Copies of statements or billings should be attached. For original con­tracts entered into on or after January 1, 2022, a claimant may also provide a notice of unpaid labor or materials invoice that is past due. This optional notice is not required for the lien to be valid. Tex. Prop. Code § 53.056(a–4).

§ 21.5:3Notice of Unpaid Claim to Owner and Original Contractor

All derivative claimants, first-tier and second-tier, must send a written notice of unpaid claim to the owner and original contractor. Form 21-2 in this chapter is meant to satisfy this notice requirement for original contracts entered into before January 1, 2022. It contains language prescribed by Tex. Prop. Code §§ 53.056(d), 53.252(c), advising the owner that a failure to withhold payment from the contractor may result in the owner becoming personally liable and the property subjected to a lien. This lan­guage is required to trap funds on the project pursuant to Tex. Prop. Code § 53.081(b). Form 21-18 in this chapter is meant to satisfy this notice requirement for original contracts entered into on or after January 1, 2022, pursuant to the revised Tex. Prop. Code § 53.056.

Form 21-2 in this chapter includes a reference to the Texas Construction Trust Fund Act, Tex. Prop. Code §§ 162.001–.033. This statute states that all recipients of payment under a construc­tion contract in Texas (including an owner who receives construction loan funds secured by a deed of trust on real property and the contractor who receives a construction draw) become trust­ees of the funds and must see to it that the funds received are used to pay actual expenses directly related to the job. Tex. Prop. Code §§ 162.002, 162.031(b). Diversion of funds to other jobs or expenses not directly related to the project on which the funds were received is a violation of the statute and, in some circumstances, is a crime. Tex. Prop. Code §§ 162.031(a), 162.032.

§ 21.5:4Notice of Unpaid Claim—Homestead Property

Form 21-3 in this chapter is a statutory disclo­sure and warning that must be included verbatim in any notice of unpaid claim given on home­stead property against which a contractor, sub­contractor, supplier, or other claimant wishes to assert a mechanic’s lien. Tex. Prop. Code § 53.254(g). Form 21-19 in this chapter meets this disclosure requirement for original contracts entered into on or after January 1, 2022.

§ 21.5:5Special Notices

Specially Fabricated Materials:      The notice regarding specially fabricated materials, form 21-6 in this chapter, is to be sent by the fifteenth day of the second month after the claimant receives and accepts an order for a specially fab­ricated material. Tex. Prop. Code §§ 53.058, 53.253.

This notice must be sent by certified mail, return receipt requested, to the owner or reputed owner and also to the original contractor, unless the claimant’s subcontract is with the original con­tractor. Tex. Prop. Code §§ 53.058(b), (d), 53.253(c), (e).

Sending this notice allows the claimant to later perfect a mechanic’s lien by filing an affidavit at the applicable time, even if the claimant has not yet delivered the specially fabricated materials. Tex. Prop. Code §§ 53.058, 53.253. Taking advantage of this procedure has the potential of allowing the lien claimant to retain specially fabricated materials while still asserting a mechanic’s lien claim.

Different or additional notices may be required if the specially fabricated materials have (or should have) already been delivered. See Tex. Prop. Code §§ 53.058(e), 53.253(b).

For original contracts entered into on or after January 1, 2022, sections 53.058 and 53.253 are repealed and the notice for specially fabricated materials is included in Tex. Prop. Code § 53.056. Form 21-18 in this chapter provides the notice.

Contractual Retainage:      Contractual retain­age is the right expressed in a subcontract or other agreement to withhold, from progress pay­ments otherwise due, a percentage of money due a first- or second-tier claimant pending comple­tion of the work, final payment released on the project, or other later date. Retainage provisions in Texas Property Code chapter 53 were amended by the 2011 and 2021 legislatures. For projects on which the original contract was exe­cuted before September 1, 2011, form 21-7, notice of agreement providing for retainage, must be sent by the claimant by registered or certified mail to the last known business or resi­dence address of the owner, reputed owner, or original contractor to later perfect a lien claim for retainage on the project, if the claimant has entered into an agreement that provides for retainage. Tex. Prop. Code § 53.057. Form 21-8 is the notice of retainage agreement applicable to projects for which the original contract was executed on or after September 1, 2011. Tex. Prop. Code § 53.057(c). Form 21-8 need not be sent by registered or certified mail.

For original contracts entered into on or after January 1, 2022, form 21-20 is a promulgated notice that must be provided for a lien for unpaid retainage to be valid. Tex. Prop. Code § 53.057. The claimant must send the notice of claim for unpaid retainage to the owner or reputed owner and the original contractor within thirty days after the earlier of (1) the date the claimant’s contract is completed, terminated, or abandoned or (2) the date the original contract is terminated or abandoned. Tex. Prop. Code § 53.057(a–1). This notice may be given in per­son to the party entitled to the notice or to that party’s agent, by certified mail, or by any other form of traceable, private delivery or mailing service that can confirm proof of receipt. Tex. Prop. Code § 53.003.

§ 21.5:6Requests for Information

Tex. Prop. Code § 53.159 provides that the vari­ous participants in the construction project (owner, contractor, subcontractor, and supplier) may request information of each other. Forms 21-9 through 21-12 in this chapter are letters that indicate the information that may be requested. Failure to provide information requested in accordance with the statute triggers liability for the reasonable and necessary costs of obtaining the information elsewhere. Tex. Prop. Code § 53.159(f). Also, a subcontractor who does not timely receive the notice of the date of execution of the original contract for the project is not required to file a mechanic’s lien by the early retainage deadlines, but instead may file by the later dates specified by Tex. Prop. Code § 53.052. See the discussion in section 21.8:2 below.

§ 21.5:7Release Required of Claimant

Once a claim is paid or otherwise satisfied, a mechanic’s lien claimant must furnish a release in recordable form to the person paying the claim. The release of mechanic’s and material­man’s lien, form 21-13 in this chapter, must be furnished by the claimant within ten days of receipt of a written request. See Tex. Prop. Code § 53.152.

If the claim is only partially paid, a partial release of lien, form 21-14, may be used to pre­serve the lien securing the balance owed.

§ 21.6Time Limits for Contractual Retainage Claims

For original contracts entered into before Janu­ary 1, 2022, a first- or second-tier claimant has two alternative methods for sending lien notices covering the claimant’s contractual retainage claim. The claimant may send the notices, which are due each month, by the deadlines provided by Texas Property Code sections 53.056 or 53.252. (See section 21.7 below.) Alternatively, the claimant may send a simplified, one-time notice for contractual retainage agreement, given according to Tex. Prop. Code § 53.057. See forms 21-7 and 21-8 in this chapter. The claimant who gives the retainage notice by the Tex. Prop. Code § 53.057 deadline does not have to give other retainage notices, except notice of the filing of the mechanic’s lien affida­vit. Tex. Prop. Code § 53.057(e).

For original contracts entered into on or after January 1, 2022, in order for a lien for labor or materials to be valid, all claimants must give the notice prescribed by Tex. Prop. Code § 53.056. See Form 21-18 in this chapter. If the section 53.056 notice does not contain a claim for unpaid retainage, in order to secure a valid lien for contractual retainage, all claimants must give the notice prescribed by Tex. Prop. Code § 53.057. Form 21-20 provides this section 53.057 notice.

Note, however, that a claim consisting in part of retainage and in part of other billings on a job must comply not only with the retainage notice deadlines but also with the other applicable notice time limits as set out in section 21.7 below. Tex. Prop. Code §§ 53.056, 53.257.

The following deadlines are for contractual retainage notices. These apply to both residen­tial and nonresidential projects. Because the retainage provisions in Texas Property Code chapter 53 were amended by the 2011 Texas leg­islature, two sets of deadlines are provided, the application of which depends on the date of exe­cution of the original contract between the origi­nal contractor and owner. Although the timing requirements remain the same for original con­tracts entered into on or after January 1, 2022, as those for contracts executed on or after Septem­ber 1, 2011, those requirements were moved from Tex. Prop. Code § 53.057(b)–(d), which were repealed by House Bill 2237, to Tex. Prop. Code § 53.057(a–1).

Original Contract Executed before Septem­ber 1, 2011:      Notice to the original contractor and to the owner by second-tier and lower-tier claimants (subcontractors or suppliers with no contract with the original contractor) must be given not later than the fifteenth day of the sec­ond month following the first month of delivery or work. Tex. Prop. Code § 53.057(b).

Notice to the owner by first-tier claimants (sub­contractors or suppliers with contracts directly with the original contractor) must also be given not later than the fifteenth day of the second month following the first month of delivery or work. Tex. Prop. Code § 53.057(b).

Original Contract Executed on or after Sep­tember 1, 2011:      Notice to the original con­tractor and to the owner by second-tier and lower-tier claimants (subcontractors or suppliers with no contract with the original contractor) must be given by the earlier of—

1.the thirtieth day after the claimant’s agreement (i.e., the subcontract work or delivery of material) is completed, terminated, or abandoned; or

2.the thirtieth day after the date the owner’s or original contractor’s agree­ment is terminated or abandoned.

Tex. Prop. Code § 53.057(b–1).

Notice to the owner by first-tier claimants (sub­contractors or suppliers with subcontracts or other agreements directly with the original con­tractor) must also be given by the earlier of the deadlines stated above for second-tier claimants. Tex. Prop. Code § 53.057(b)–(d).

§ 21.7Time Limits for Notices of Claims Other than for Contractual Retainage

§ 21.7:1Nonresidential Projects

First- and Second-Tier Claimants—Owner and Original Contractor Notice:      For origi­nal contracts entered into before January 1, 2022, notice to the original contractor by sec­ond-tier and lower-tier claimants must be given not later than the fifteenth day of the second month following each month of delivery or work. Tex. Prop. Code § 53.056(b). See the table at section 21.9:1 below.

Notice to the owner and to the original contrac­tor of all derivative claims must also be given not later than the fifteenth day of the third month following each month of delivery or work. Tex. Prop. Code § 53.056(b). See the table at section 21.9:1 below.

For original contracts entered into on or after January 1, 2022, notice must be sent to the owner and to the original contractor no later than the fifteenth day of the third month after the month during which (1) the labor or materials were provided or (2) the undelivered specially fabricated materials would normally have been delivered. Tex. Prop. Code § 53.056(a–1).

§ 21.7:2Residential Projects

First- and Second-Tier Claimants—Owner and Original Contractor Notice:      For origi­nal contracts entered into before January 1, 2022, notice to the owner and to the original contractor of all derivative claims must be given not later than the fifteenth day of the second month following each month of delivery or work. Tex. Prop. Code § 53.252. See the table at section 21.9:2 below.

For original contracts entered into on or after January 1, 2022, notice must be sent to the owner and to the original contractor no later than the fifteenth day of the second month after the month during which (1) the labor or materi­als were provided or (2) the undelivered spe­cially fabricated materials would normally have been delivered. Tex. Prop. Code § 53.056(a–1).

§ 21.8Deadlines for Filing Lien Affidavit

For construction projects where the original contract was entered into before January 1, 2022, in addition to sending the notices by the times described above, the claimant must file a lien affidavit in the real property records of the county in which the property is located. Tex. Prop. Code § 53.052. For construction projects where the original contract was entered into on or after January 1, 2022, an original contractor or any other claimant must file the lien affidavit with the county clerk where the property is located, removing the technical requirement that the lien affidavit be specifically filed in the real property records. Failure of the county clerk to properly index or file the lien affidavit does not affect the validity of the affidavit.

The deadline for filing the lien affidavit depends on several factors, all of them dependent upon the date the original contract was entered into as set forth in statutory amendments made effec­tive on September 1, 2011, and January 1, 2022. Attorneys reviewing lien affidavit deadlines should proceed with caution when determining the timelines for filing lien affidavits.

§ 21.8:1Accrual of Indebtedness

For original contracts entered into before Janu­ary 1, 2022, one of the factors for determining the deadline to file a lien affidavit is the date the claimant’s indebtedness accrues.

A claimant’s “indebtedness accrues” by the ear­liest of the following:

1.For original contractors, the earlier of (a) the last day of the month of receipt by the owner or contractor of a written declaration by the other party that the original contract has been terminated or (b) the last day of the month in which the project was completed or abandoned. Tex. Prop. Code § 53.053(b).

2.For a first- or second-tier claimant, the last day of the last month in which that claimant’s labor was performed or material furnished. Tex. Prop. Code § 53.053(c).

3.For a claimant furnishing specially fabricated material, the last day of the last month in which (a) the material was furnished; (b) the material would have been furnished; or (c) the owner, contractor, or subcontractor breached or terminated the contract or subcon­tract with the claimant. Tex. Prop. Code § 53.053(d).

4.For claims for unpaid contractual retainage, the earliest of the last day of the month in which the whole project is completed, finally settled, termi­nated, or abandoned. Tex. Prop. Code § 53.053(e).

For construction projects where the original contract is entered into on or after January 1, 2022, the accrual of indebtedness requirement does not apply.

§ 21.8:2Original Contractor Lien Affidavit Filing Deadlines

For construction projects where the original contract was entered into before January 1, 2022, the original contractor lien affidavit filing deadline for residential projects is the fifteenth day of the third calendar month after the “indebtedness accrues.” Tex. Prop. Code § 53.052. For nonresidential projects, the dead­line is the fifteenth day of the fourth calendar month after the “indebtedness accrues.” Tex. Prop. Code § 53.052.

For construction projects where the original contract was entered into on or after January 1, 2022, the original contractor lien affidavit filing deadline for residential projects is the fifteenth day of the third month after the month in which the original contractor’s work was completed, terminated, or abandoned. Tex. Prop. Code § 53.052(a)(2). For nonresidential projects, the deadline is the fifteenth day of the fourth month after the month in which the original contrac­tor’s work was completed, terminated, or aban­doned. Tex. Prop. Code § 53.052(a)(1).

§ 21.8:3First- and Second-Tier Claimant Lien Affidavit Filing Deadlines

To obtain an enforceable lien claim and also claim a share of the owner’s required 10 percent statutory retainage or reservation, first- and sec­ond-tier subcontractor and supplier lien claim­ants must file their lien affidavits by the earlier of the deadlines indicated in sections 21.8:4 through 21.8:6 below. Because the retainage or reservation provisions affecting first- and sec­ond-tier claimants were amended by the 2011 and 2021 Texas legislatures, three sets of dead­lines are provided, application of which depends on the date of execution of the original contract between the original contractor and owner.

§ 21.8:4Original Contract Executed before September 1, 2011

First- and second-tier subcontractor and supplier lien claimants’ lien affidavit filing deadlines are determined as follows:

1.For residential projects, by the fif­teenth day of the third calendar month after the “indebtedness accrues.” Tex. Prop. Code § 53.052. See the table at section 21.9:2 below.

2.For nonresidential projects, by the fif­teenth day of the fourth calendar month after the “indebtedness accrues.” Tex. Prop. Code § 53.052. See the table at section 21.9:1 below.

However, if the deadline provided for in Tex. Prop. Code § 53.103 occurs earlier than the deadlines above, the claimant must file by the earlier date to share in the owner’s 10 percent statutory retainage. See Tex. Prop. Code § 53.103. This thirty-day deadline applies to both residential and nonresidential projects.

Note that for determining “final completion,” warranty work does not count to extend time limits.

§ 21.8:5Original Contract Executed from September 1, 2011, to December 31, 2021

A claimant may rely on the deadlines described in section 21.8:4 above, based on the pre-2011 version of the statute. Alternatively, a claimant may choose instead to file by the earliest of the following four deadlines for projects in which the original contract was executed on or after September 1, 2011:

1.The normal lien-filing date provided by Tex. Prop. Code § 53.052, which is (a) the fifteenth day of the fourth month following the last month of work or delivery by the claimant for nonresidential projects or (b) the fif­teenth day of the third month follow­ing the last month of work or delivery by the claimant for residential proj­ects. (See the tables at sections 21.9:1 and 21.9:2 below.)

2.The fortieth day after the date stated in the affidavit of completion for the original contract, if the owner sent the claimant notice of the affidavit. This affidavit of completion is provided for in Tex. Prop. Code § 53.106, which allows, but does not require, the owner to file such an affidavit stating the date of final completion for the project. See form 18-7 in this manual. Notice of filing and a copy of the affidavit must be sent to claimants making a written request for them or to claimants who have sent out owner lien notices. However, regardless of whether a claimant makes a request for such an affidavit or sends a lien notice, if the affidavit is not sent to a claimant, then the forty-day deadline provided in this section does not apply to that claim­ant. The affidavit is prima facie evi­dence of the actual final completion date for the project if it is sent to claimants as required.

3.For nonresidential projects only, the fortieth day after the date of termina­tion or abandonment of the original contract if notice of termination or abandonment was sent by the owner to the claimant as required by Tex. Prop. Code § 53.107. The notice of termina­tion or abandonment is required to be sent to each claimant who requests notice in writing or who sends the owner a lien notice. However, regard­less of whether a claimant makes a request for a notice of termination or abandonment or sends a lien notice, if that notice is not sent to a claimant, then the forty-day deadline provided in this section does not apply. See form 21-15. This deadline option is not applicable to residential projects. Tex. Prop. Code § 53.107(e).

4.The thirtieth day after the day the owner sends written notice to the claimant demanding that the claimant file its mechanic’s lien affidavit. The notice must contain a legal description of the project property, the owner’s name and address, and it must specify that the lien affidavit must be filed within thirty days of when the notice was sent. Tex. Prop. Code § 53.057(g).

Interestingly, this fourth alternative provides that the notice is effective only for the amount of contractual retainage earned by the claimant as of the day this owner notice was sent. Therefore, Tex. Prop. Code § 53.057(g) indicates that claimants who fail to file within thirty days of the owner demand may have only their contrac­tual retainage impacted.

§ 21.8:6Original Contract Entered Into on or after January 1, 2022

A claimant other than an original contractor claiming the lien must file an affidavit with the clerk of the county where the improvements are located—

1.for residential construction projects, not later than the fifteenth day of the third month after the later of (a) the month the claimant last provided labor or materials or (b) the month the claimant would normally have been required to deliver the last of specially fabricated materials that have not been actually delivered (Tex. Prop. Code § 53.052(c));

2.for a lien for retainage, not later than the fifteenth day of the third month after the month in which the original contract under which the claimant per­formed was completed, terminated, or abandoned (Tex. Prop. Code § 53.052(d)); or

3.for other liens, not later than the fif­teenth day of the fourth month after the later of (a) the month the claimant last provided labor or materials or (b) the month the claimant would nor­mally have been required to deliver the last of specially fabricated materi­als that have not been actually deliv­ered (Tex. Prop. Code § 53.052(b)).

§ 21.8:7Owner Notice of Termination or Abandonment by Contractor—Nonresidential Projects   

For nonresidential projects only, a notice of ter­mination or abandonment is required of the owners. The notice must be sent not later than the tenth day after the date the original contract is terminated or the original contractor abandons performance under the original contract. Tex. Prop. Code § 53.107.

The owner must send this notice to every claim­ant who has either provided the owner with notice of a lien claim or of a claim for unpaid retainage or sent a request to the owner for notice of termination or abandonment. Tex. Prop. Code §§ 53.103, 53.107(a). A notice of termination or abandonment by owner is included as forms 21-15 and 21-21 in this chap­ter.

If the owner fails to give the notice of termina­tion or abandonment, the claimant is not required to comply with section 53.057 to claim retainage and will not be subject to the early retainage filing deadlines of Tex. Prop. Code § 53.103 as described in sections 21.8:4 or 21.8:5(3) above. Tex. Prop. Code §§ 53.103, 53.107(d).

§ 21.8:8Owner’s Liability for Failure to Withhold 10 Percent Retainage or Reservation

For original contracts entered into before Janu­ary 1, 2022, if the owner fails to withhold statu­tory retainage, the claimants are entitled to perfect their claims by notice and affidavit by the longer deadlines described in sections 21.8:4 and 21.8:5(1) above (the fifteenth day of the third month (residential) or the fifteenth day of the fourth month (nonresidential) following the last month of work/delivery).

For original contracts entered into on or after January 1, 2022, claimants that comply with Texas Property Code chapter 53, subchapter C, have a lien against the improvements and all of its properties and against the lot or lots of land necessarily connected, at least to the extent of the amount that should have been reserved (or contractually retained) from the original con­tract. The claimants will share the lien propor­tionately in accordance with the preference for individual artisans and mechanics to the extent of their claims for wages and fringe benefits earned provided by section 53.104. Tex. Prop. Code § 53.105.

§ 21.9Timetables Outlining Deadlines

Caution:      Texas House Bill 2237 was signed by the governor on June 15, 2021, and became effective on January 1, 2022, changing the dates by which certain notices must be given and how they can be delivered. These changes apply only to an original contract entered into on or after January 1, 2022. Original contracts entered into before January 1, 2022, are governed by the law as it existed immediately before House Bill 2237 was enacted. Refer to the appropriate tables in sections 21.9:1 and 21.9:2 below based on the date of the activity.

For original contracts entered into before Janu­ary 1, 2022, if the retainage deadline provided for in Tex. Prop. Code § 53.103 is earlier than the lien affidavit deadlines provided for by Texas Property Code sections 53.052(d), 53.056, 53.057, and 53.252, the affidavit must be filed by the earlier deadline.

§ 21.9:1Nonresidential Projects (Tex. Prop. Code § 53.056)

Note: These deadlines are based on the last calendar month in which the claimant furnished labor or delivered material.

* Determine the affidavit filing date by finding the last month in which the claimant furnished labor or delivered material in the “Month of activity” column. The affidavit must be filed by the thirtieth day after completion of the entire project, if earlier than the date specified by this column.

Note: For original contractors, determine the affidavit filing date by finding the last month in which the original contractor’s work was completed, terminated, or abandoned in the “Month of activity” column. For all other claimants, determine the affidavit filing date by finding, in the “Month of activity” column, the later of (1) the last month the claimant provided labor or materials or (2) the month the claimant would normally be required to deliver the last of specially fabricated materials that have not been actually delivered. Be aware that section 53.103(2) imposes a thirty-day deadline to file the affidavit after the work ends by contract completion, contract termination, or contract abandonment.

§ 21.9:2Residential Projects (, )

Note: These deadlines are based on the last calendar month in which the claimant furnished labor or delivered material.

* Determine the affidavit filing date by finding the last month in which the claimant furnished labor or delivered material in the “Month of activity” column. The affidavit must be filed by the thirtieth day after completion of the entire project, if earlier than the date specified by this column.

Note: House Bill 2237 repealed Tex. Prop. Code § 53.252, leaving this table with the lien affidavit deadlines for residential projects. For original contractors, determine the affidavit filing date by finding the last month in which the original contractor’s work was completed, terminated, or abandoned in the “Month of activity” col­umn. For all other claimants, determine the affidavit filing date by finding, in the “Month of activity” column, the later of (1) the last month the claimant provided labor or materials or (2) the month the claimant would nor­mally be required to deliver the last of specially fabricated materials that have not been actually delivered. Be aware that section 53.103(2) imposes a thirty-day deadline to file the affidavit after the work ends by contract completion, contract termination, or contract abandonment.

§ 21.10Texas Prompt Payment Statute

Chapter 28 of the Texas Property Code provides that for private work, as contrasted with public works projects, the owner has thirty-five days from the date of receipt from a contractor of a written request for payment to pay the invoiced amount—less retainage required by law—for work properly performed or materials specially fabricated or suitably stored. Tex. Prop. Code § 28.002(a). Once the contractor receives pay­ment, he must pay his subcontractors or suppli­ers their proportionate share of the draw not more than seven days later. Tex. Prop. Code § 28.002(b). A subcontractor who receives pay­ment must in turn pay his subcontractors or sup­pliers their proportionate share not later than seven days thereafter. Tex. Prop. Code § 28.002(c). Unpaid bills earn interest at the rate of 1.5 percent per month. Interest stops accruing on the date of receipt of payment, the date pay­ment is mailed, or the date a judgment is ren­dered in a suit filed under this statute, whichever occurs first. Tex. Prop. Code § 28.004. Recov­ery of attorney’s fees in a suit to collect the interest is also allowed. Any attempt to waive this section is void. Tex. Prop. Code §§ 28.005–.006.

If a good-faith dispute exists concerning the amount owed on a residential job (construction of a single-family residence, duplex, triplex, or quadruplex), the owner, contractor, or subcon­tractor disputing the payment may withhold no more than 110 percent of the difference between the amounts claimed due. Tex. Prop. Code § 28.003(a).

If a good-faith dispute exists on projects not involving construction of a single-family resi­dence, duplex, triplex, or quadruplex, no more than 100 percent of the amount in dispute may be withheld. Tex. Prop. Code § 28.003(b).

If the construction lender’s late release of funds is the reason for the delay in payment, the owner is protected because the payment required of the owner pursuant to Tex. Prop. Code § 28.002(a) changes from the thirty-fifth day after the date the owner receives the payment request to the fifth day after the date the owner receives loan proceeds, if a construction loan exists and the owner has timely and properly requested dis­bursement but the lender failed to disburse in time to meet the thirty-five-day deadline. Tex. Prop. Code § 28.008.

Right to Suspend Work:      Section 28.009 of the Texas Property Code provides a statutory right of the contractor or subcontractor to sus­pend work on private commercial projects if he has not been paid in accordance with this statute. Subpart (e) of section 28.009 provides that this part does not apply to a contract for the con­struction of improvements to a detached single-family residence, duplex, triplex, or quadruplex. Tex. Prop. Code § 28.009(e).

Work cannot be suspended until the tenth day after the claimant gives written notice to the owner or contractor, as applicable, stating that payment has not been received and stating the intent of the contractor or subcontractor to sus­pend performance. If a construction loan exists, the lender must also be given this notice of intent to suspend work. The claimant is not required to perform further work until the amount due is paid, plus costs of demobilization and remobilization. The claimant is not respon­sible for damages due to suspension of work if the claimant was not notified in writing before suspension either that payment has been made or that a good-faith dispute about payment exists. However, a notice of good-faith dispute must include a list of specific reasons for non­payment. If one of the reasons for nonpayment is alleged defective or incomplete work, the claimant must be given a reasonable opportunity to cure the listed items or offer a deduction of a reasonable amount to compensate for the listed items that cannot be promptly cured. Tex. Prop. Code § 28.009.

§ 21.11Additional Resources

Beyer, Gerry W. Real Property. 2nd ed. West’s Texas Forms 13–15. St. Paul, MN: West, 2001. Supplement 2016.

Flores, J. Paulo. “Mechanic’s Liens—How to Deal with Invalid Liens.” In Residential Real Estate Construction Law Course, 2007. Austin: State Bar of Texas, 2007.

St. Claire, Frank A., and William V. Dorsaneo III. Texas Real Estate Guide. New York: Matthew Bender & Co., 2001.

Walthall, Thomas J., Jr. “Mechanic’s Lien ‘Removables’: Representing the Contrac­tor in Default Situations.” In Advanced Real Estate Law Course, 2009. Austin: State Bar of Texas, 2009.