[Link]

htm - Petion foreclosure

97:337. Form: Complaint for foreclosure of mechanic's lien,
breach of contract and account stated—By general contractor
against owner of real property—Renovation of single-family
dwelling – From [Link]

Sec. 53.158. PERIOD FOR BRINGING SUIT TO FORECLOSE LIEN. (a) Except as provided by Subsection (b), suit must be brought to
foreclose the lien within two years after the last day a claimant may file the lien affidavit under Section 53.052 or within one year
after completion, termination, or abandonment of the work under the original contract under which the lien is claimed, whichever
is later.

he 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].

Sec. 53.154. FORECLOSURE. A mechanic's lien may be foreclosed only on judgment of a

court of competent jurisdiction foreclosing the lien and ordering the sale of the
property subject to the lien.

Sec. 53.158. PERIOD FOR BRINGING SUIT TO FORECLOSE LIEN. (a) Except as
provided by Subsection (b), suit must be brought to foreclose the lien within
two years after the last day a claimant may file the lien affidavit under
Section 53.052 or within one year after completion, termination, or abandonment
of the work under the original contract under which the lien is claimed,
whichever is later.
(b) For a claim arising from a residential construction project, suit
must be brought to foreclose the lien within one year after the last day a
claimant may file a lien affidavit under Section 53.052 or within one year
after completion, termination, or abandonment of the work under the original
contract under which the lien is claimed, whichever is later.

PROPERTY CODE

TITLE 5. EXEMPT PROPERTY AND LIENS

SUBTITLE B. LIENS

CHAPTER 53. MECHANIC'S, CONTRACTOR'S, OR MATERIALMAN'S LIEN

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 53.001. DEFINITIONS. In this chapter:

(1) "Contract price" means the cost to the owner for any part of
construction or repair performed under an original contract.
(2) "Improvement" includes:
(A) abutting sidewalks and streets and utilities in or on those
sidewalks and streets;
(B) clearing, grubbing, draining, or fencing of land;
(C) wells, cisterns, tanks, reservoirs, or artificial lakes or
pools made for supplying or storing water;
(D) pumps, siphons, and windmills or other machinery or
apparatuses used for raising water for stock, domestic use, or irrigation; and
(E) planting orchard trees, grubbing out orchards and replacing
trees, and pruning of orchard trees.
(3) "Labor" means labor used in the direct prosecution of the work.
(4) "Material" means all or part of:
(A) the material, machinery, fixtures, or tools incorporated
into the work, consumed in the direct prosecution of the work, or ordered and
delivered for incorporation or consumption;
(B) rent at a reasonable rate and actual running repairs at a
reasonable cost for construction equipment used or reasonably required and
delivered for use in the direct prosecution of the work at the site of the
construction or repair; or
(C) power, water, fuel, and lubricants consumed or ordered and
delivered for consumption in the direct prosecution of the work.
(5) "Mechanic's lien" means the lien provided by this chapter.
 (6) "Original contract" means an agreement to which an owner is a
party either directly or by implication of law.
(7) "Original contractor" means a person contracting with an owner
either directly or through the owner's agent.
(8) "Residence" means a single-family house, duplex, triplex, or
quadruplex or a unit in a multiunit structure used for residential purposes
that is:
(A) owned by one or more adult persons; and
(B) used or intended to be used as a dwelling by one of the
owners.
(9) "Residential construction contract" means a contract between an
owner and a contractor in which the contractor agrees to construct or repair
the owner's residence, including improvements appurtenant to the residence.
(10) "Residential construction project" means a project for the
construction or repair of a new or existing residence, including improvements
appurtenant to the residence, as provided by a residential construction
contract.
(11) "Retainage" means an amount representing part of a contract
payment that is not required to be paid to the claimant within the month
following the month in which labor is performed, material is furnished, or
specially fabricated material is delivered. The term does not include
retainage under Subchapter E.
(12) "Specially fabricated material" means material fabricated for
use as a component of the construction or repair so as to be reasonably
unsuitable for use elsewhere.
(13) "Subcontractor" means a person who has furnished labor or
materials to fulfill an obligation to an original contractor or to a
subcontractor to perform all or part of the work required by an original
contract.
(14) "Work" means any part of construction or repair performed under
an original contract.
(15) "Completion" of an original contract means the actual
completion of the work, including any extras or change orders reasonably
required or contemplated under the original contract, other than warranty work
or replacement or repair of the work performed under the contract.

Acts 1983, 68th Leg., p. 3533, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1997, 75th Leg., ch. 526, Sec. 2, eff. Sept. 1, 1997; Acts 1999, 76th
Leg., ch. 889, Sec. 1, eff. Sept. 1, 1999.

Sec. 53.002. MORE THAN ONE ORIGINAL CONTRACTOR. On any work there may be
more than one original contractor for purposes of this chapter.
Acts 1983, 68th Leg., p. 3535, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 53.003. NOTICES. (a) This section applies to notices required by

Subchapters B through G and K.
(b) Any notice or other written communication may be delivered in person
to the party entitled to the notice or to that party's agent, regardless of the
manner prescribed by law.
(c) If notice is sent by registered or certified mail, deposit or mailing
of the notice in the United States mail in the form required constitutes
compliance with the notice requirement. This subsection does not apply if the
law requires receipt of the notice by the person to whom it is directed.
(d) If a written notice is received by the person entitled to receive it,
the method by which the notice was delivered is immaterial.

Acts 1983, 68th Leg., p. 3535, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1997, 75th Leg., ch. 526, Sec. 3, eff. Sept. 1, 1997.

SUBCHAPTER B. PERSONS ENTITLED TO LIEN; SUBJECT PROPERTY

Sec. 53.021. PERSONS ENTITLED TO LIEN. (a) A person has a lien if:
(1) the person labors, specially fabricates material, or furnishes
labor or materials for construction or repair in this state of:
(A) a house, building, or improvement;
(B) a levee or embankment to be erected for the reclamation of
overflow land along a river or creek; or
(C) a railroad; and
(2) the person labors, specially fabricates the material, or
furnishes the labor or materials under or by virtue of a contract with the
owner or the owner's agent, trustee, receiver, contractor, or subcontractor.
(b) A person who specially fabricates material has a lien even if the
material is not delivered.
(c) An architect, engineer, or surveyor who prepares a plan or plat under
or by virtue of a written contract with the owner or the owner's agent,
trustee, or receiver in connection with the actual or proposed design,
construction, or repair of improvements on real property or the location of the
boundaries of real property has a lien on the property.
(d) A person who provides labor, plant material, or other supplies for
the installation of landscaping for a house, building, or improvement,
including the construction of a retention pond, retaining wall, berm,
irrigation system, fountain, or other similar installation, under or by virtue
of a written contract with the owner or the owner's agent, contractor,
subcontractor, trustee, or receiver has a lien on the property.
(e) A person who performs labor as part of, or who furnishes labor or
materials for, the demolition of a structure on real property under or by
virtue of a written contract with the owner of the property or the owner's
agent, trustee, receiver, contractor, or subcontractor has a lien on the
property.

Acts 1983, 68th Leg., p. 3535, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 395, Sec. 1, eff. Sept. 1, 1989; Acts 1989, 71st
Leg., ch. 1138, Sec. 1, eff. Sept. 1, 1989; Acts 1991, 72nd Leg., ch. 16, Sec.
16.01, eff. Aug. 26, 1991; Acts 1995, 74th Leg., ch. 851, Sec. 1, 6, eff.
Sept. 1, 1995; Acts 1999, 76th Leg., ch. 896, Sec. 1, eff. Sept. 1, 1999;
Acts 2003, 78th Leg., ch. 410, Sec. 1, eff. Sept. 1, 2003.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 271 (H.B. 1456), Sec. 1, eff. January 1,
2012.

Sec. 53.022. PROPERTY TO WHICH LIEN EXTENDS. (a) The lien extends to
the house, building, fixtures, or improvements, the land reclaimed from
overflow, or the railroad and all of its properties, and to each lot of land
necessarily connected or reclaimed.
(b) The lien does not extend to abutting sidewalks, streets, and
utilities that are public property.
(c) A lien against land in a city, town, or village extends to each lot
on which the house, building, or improvement is situated or on which the labor
was performed.
(d) A lien against land not in a city, town, or village extends to not
more than 50 acres on which the house, building, or improvement is situated or
on which the labor was performed.

Acts 1983, 68th Leg., p. 3536, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 53.023. PAYMENT SECURED BY LIEN. The lien secures payment for:
(1) the labor done or material furnished for the construction or
repair;
(2) the specially fabricated material, even if the material has not
been delivered or incorporated into the construction or repair, less its fair
salvage value; or
(3) the preparation of a plan or plat by an architect, engineer, or
surveyor in accordance with Section 53.021(c).
Acts 1983, 68th Leg., p. 3536, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1995, 74th Leg., ch. 851, Sec. 2, eff. Sept. 1, 1995.

Sec. 53.024. LIMITATION ON SUBCONTRACTOR'S LIEN. The amount of a lien

claimed by a subcontractor may not exceed:
(1) an amount equal to the proportion of the total subcontract price
that the sum of the labor performed, materials furnished, materials specially
fabricated, reasonable overhead costs incurred, and proportionate profit margin
bears to the total subcontract price; minus
(2) the sum of previous payments received by the claimant on the
subcontract.

Acts 1983, 68th Leg., p. 3536, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 53.025. LIMITATION ON ORDINARY RETAINAGE LIEN. A lien for retainage

is valid only for the amount specified to be retained in the contract,
including any amendments to the contract, between the claimant and the original
contractor or between the claimant and a subcontractor.

Acts 1983, 68th Leg., p. 3537, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 2, eff. Sept. 1, 1989.

Sec. 53.026. SHAM CONTRACT. (a) A person who labors, specially

fabricates materials, or furnishes labor or materials under a direct
contractual relationship with another person is considered to be in direct
contractual relationship with the owner and has a lien as an original
contractor, if:
(1) the owner contracted with the other person for the construction
or repair of a house, building, or improvements and the owner can effectively
control that person through ownership of voting stock, interlocking
directorships, or otherwise;
(2) the owner contracted with the other person for the construction
or repair of a house, building, or improvements and that other person can
effectively control the owner through ownership of voting stock, interlocking
directorships, or otherwise; or
(3) the owner contracted with the other person for the construction
or repair of a house, building, or improvements and the contract was made
without good faith intention of the parties that the other person was to
perform the contract.
(b) In this section, "owner" does not include a person who has or claims
a security interest only.
Acts 1983, 68th Leg., p. 3537, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 3, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 4, eff. Sept. 1, 1997.

SUBCHAPTER C. PROCEDURE FOR PERFECTING LIEN

Sec. 53.051. NECESSARY PROCEDURES. To perfect the lien, a person must

comply with this subchapter.

Acts 1983, 68th Leg., p. 3538, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 53.052. FILING OF AFFIDAVIT. (a) Except as provided by Subsection

(b), the person claiming the lien must file an affidavit with the county clerk
of the county in which the property is located or into which the railroad
extends not later than the 15th day of the fourth calendar month after the day
on which the indebtedness accrues.
(b) A person claiming a lien arising from a residential construction
project must file an affidavit with the county clerk of the county in which the
property is located not later than the 15th day of the third calendar month
after the day on which the indebtedness accrues.
(c) The county clerk shall record the affidavit in records kept for that
purpose and shall index and cross-index the affidavit in the names of the
claimant, the original contractor, and the owner. Failure of the county clerk
to properly record or index a filed affidavit does not invalidate the lien.

Acts 1983, 68th Leg., p. 3538, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 4, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 5, eff. Sept. 1, 1997.

Sec. 53.053. ACCRUAL OF INDEBTEDNESS. (a) For purposes of Section

53.052, indebtedness accrues on a contract under which a plan or plat is
prepared, labor was performed, materials furnished, or specially fabricated
materials are to be furnished in accordance with this section.
(b) Indebtedness to an original contractor accrues:
(1) on the last day of the month in which a written declaration by
the original contractor or the owner is received by the other party to the
original contract stating that the original contract has been terminated; or
(2) on the last day of the month in which the original contract has
been completed, finally settled, or abandoned.
(c) Indebtedness to a subcontractor, or to any person not covered by
Subsection (b) or (d), who has furnished labor or material to an original
contractor or to another subcontractor accrues on the last day of the last
month in which the labor was performed or the material furnished.
(d) Indebtedness for specially fabricated material accrues:
(1) on the last day of the last month in which materials were
delivered;
(2) on the last day of the last month in which delivery of the last
of the material would normally have been required at the job site; or
(3) on the last day of the month of any material breach or
termination of the original contract by the owner or contractor or of the
subcontract under which the specially fabricated material was furnished.
(e) A claim for retainage accrues on the earliest of the last day of the
month in which all work called for by the contract between the owner and the
original contractor has been completed, finally settled, terminated, or
abandoned.

Acts 1983, 68th Leg., p. 3539, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 5, eff. Sept. 1, 1989; Acts 1995, 74th
Leg., ch. 851, Sec. 3, eff. Sept. 1, 1995.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 1, eff. September 1,
2011.

Sec. 53.054. CONTENTS OF AFFIDAVIT. (a) The affidavit must be signed by

the person claiming the lien or by another person on the claimant's behalf and
must contain substantially:
(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.
 (b) The claimant may attach to the affidavit a copy of any applicable
written agreement or contract and a copy of each notice sent to the owner.
(c) The affidavit is not required to set forth individual items of work
done or material furnished or specially fabricated. The affidavit may use any
abbreviations or symbols customary in the trade.

Acts 1983, 68th Leg., p. 3540, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 6, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 6, eff. Sept. 1, 1997.

Sec. 53.055. NOTICE OF FILED AFFIDAVIT. (a) A person who files an

affidavit must send a copy of the affidavit by registered or certified mail to
the owner or reputed owner at the owner's last known business or residence
address not later than the fifth day after the date the affidavit is filed with
the county clerk.
(b) If the person is not an original contractor, the person must also
send a copy of the affidavit to the original contractor at the original
contractor's last known business or residence address within the same period.

Acts 1983, 68th Leg., p. 3540, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 7, eff. Sept. 1, 1989; Acts 1993, 73rd
Leg., ch. 48, Sec. 7, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 526, Sec.
7, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 889, Sec. 2, eff. Sept. 1,
1999.

Sec. 53.056. DERIVATIVE CLAIMANT: NOTICE TO OWNER OR ORIGINAL

CONTRACTOR. (a) Except as provided by Subchapter K, a claimant other than an
original contractor must give the notice prescribed by this section for the
lien to be valid.
(b) If the lien claim arises from a debt incurred by a subcontractor, the
claimant must give to the original contractor written notice of the unpaid
balance. The claimant must give the notice not later than the 15th day of the
second month following each month in which all or part of the claimant's labor
was performed or material delivered. The claimant must give the same notice to
the owner or reputed owner and the original contractor not later than the 15th
day of the third month following each month in which all or part of the
claimant's labor was performed or material or specially fabricated material was
delivered.
(c) If the lien claim arises from a debt incurred by the original
contractor, the claimant must give notice to the owner or reputed owner, with a
copy to the original contractor, in accordance with Subsection (b).
 (d) To authorize the owner to withhold funds under Subchapter D, the
notice to the owner must state that 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 payments from the contractor for payment of
the claim; or
(2) the claim is otherwise paid or settled.
(e) The notice must be sent by registered or certified mail and must be
addressed to the owner or reputed owner or the original contractor, as
applicable, at his last known business or residence address.
(f) A copy of the statement or billing in the usual and customary form is
sufficient as notice under this section.

Acts 1983, 68th Leg., p. 3540, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 8, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 8, eff. Sept. 1, 1997.

Sec. 53.057. DERIVATIVE CLAIMANT: NOTICE FOR CONTRACTUAL RETAINAGE

CLAIM. (a) A claimant may give notice under this section instead of or in
addition to notice under Section 53.056 or 53.252 if the claimant is to labor,
furnish labor or materials, or specially fabricate materials, or has labored,
furnished labor or materials, or specially fabricated materials, under an
agreement with an original contractor or a subcontractor providing for
retainage.
(b) The claimant must give the owner or reputed owner notice of
contractual retainage not later than the earlier of:
(1) the 30th day after the date the claimant's agreement providing
for retainage is completed, terminated, or abandoned; or
(2) the 30th day after the date the original contract is terminated
or abandoned.
(b-1) If an agreement for contractual retainage is with a subcontractor,
the claimant must also give the notice of contractual retainage to the original
contractor within the period prescribed by Subsection (b).
(c) The notice must generally state the existence of a requirement for
retainage and contain:
(1) the name and address of the claimant; and
(2) if the agreement is with a subcontractor, the name and address
of the subcontractor.
(d) The notice must be sent to the last known business or residence
address of the owner or reputed owner or the original contractor, as
applicable.
 (e) If a claimant gives notice under this section and Section 53.055 or,
if the claim relates to a residential construction project, under this section
and Section 53.252, the claimant is not required to give any other notice as to
the retainage.
(f) A claimant has a lien on, and the owner is personally liable to the
claimant for, the retained funds under Subchapter E if the claimant:
(1) gives notice in accordance with this section and:
(A) complies with Subchapter E; or
(B) files an affidavit claiming a lien not later than the
earliest of:
(i) the date required for filing an affidavit under
Section 53.052;
(ii) the 40th day after the date stated in an affidavit of
completion as the date of completion of the work under the original contract,
if the owner sent the claimant notice of an affidavit of completion in the time
and manner required;
(iii) the 40th day after the date of termination or
abandonment of the original contract, if the owner sent the claimant a notice
of such termination or abandonment in the time and manner required; or
(iv) the 30th day after the date the owner sent to the
claimant to the claimant's address provided in the notice for contractual
retainage, as required under Subsection (c), a written notice of demand for the
claimant to file the affidavit claiming a lien; and
(2) gives the notice of the filed affidavit as required by Section
53.055.
(g) The written demand under Subsection (f)(1)(B)(iv):
(1) must contain the owner's name and address and a description,
legally sufficient for identification, of the real property on which the
improvement is located;
(2) must state that the claimant must file the lien affidavit not
later than the 30th day after the date the demand is sent; and
(3) is effective only for the amount of contractual retainage earned
by the claimant as of the day the demand was sent.

Acts 1983, 68th Leg., p. 3541, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 9, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 9, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 889, Sec.
3, eff. Sept. 1, 1999.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 2, eff. September 1,
2011.
 Sec. 53.058. DERIVATIVE CLAIMANT: NOTICE FOR SPECIALLY FABRICATED ITEMS.
(a) Except as provided by Subchapter K, a claimant who specially fabricates
material must give notice under this section for the lien to be valid.
(b) The claimant must give the owner or reputed owner notice not later
than the 15th day of the second month after the month in which the claimant
receives and accepts the order for the material. If the indebtedness is
incurred by a person other than the original contractor, the claimant must also
give notice within that time to the original contractor.
(c) The notice must contain:
(1) a statement that the order has been received and accepted; and
(2) the price of the order.
(d) The notice must be sent by registered or certified mail to the last
known business or residence address of the owner or the reputed owner or the
original contractor, as applicable.
(e) In addition to notice under this section, the claimant must give
notice under Section 53.056 if delivery has been made or if the normal delivery
time for the job has passed.
(f) The lien of a claimant who accepts an order but fails to give notice
under this section is valid as to delivered items if the claimant has given
notice under Section 53.056.
(g) If a retainage agreement consists in whole or part of an obligation
to furnish specially fabricated materials and the claimant has given notice
under Section 53.057, the claimant is not required to give notice under this
section.

Acts 1983, 68th Leg., p. 3542, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 10, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 10, eff. Sept. 1, 1997.

SUBCHAPTER D. FUNDS WITHHELD BY OWNER FOLLOWING NOTICE

Sec. 53.081. AUTHORITY TO WITHHOLD FUNDS FOR BENEFIT OF CLAIMANTS. (a)

If an owner receives notice under Section 53.056, 53.057, 53.058, 53.252, or
53.253, the owner may withhold from payments to the original contractor an
amount necessary to pay the claim for which he receives notice.
(b) If notice is sent in a form that substantially complies with Section
53.056 or 53.252, the owner may withhold the funds immediately on receipt of
the notice.
(c) If notice is sent under Section 53.057, the owner may withhold funds
immediately on receipt of a copy of the claimant's affidavit prepared in
accordance with Sections 53.052 through 53.055.
 (d) If notice is sent under Section 53.058, the owner may withhold funds
immediately on receipt of the notices sent under Subsection (e) of that
section. If notice is sent as provided by Section 53.253(b), the owner may
withhold funds immediately on receipt of the notice sent as required by Section
53.252.

Acts 1983, 68th Leg., p. 3543, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 12, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 11, eff. Sept. 1, 1997.

Sec. 53.082. TIME FOR WHICH FUNDS ARE WITHHELD. Unless payment is made
under Section 53.083 or the claim is otherwise settled, discharged, indemnified
against under Subchapter H or I, or determined to be invalid by a final
judgment of a court, the owner shall retain the funds withheld until:
(1) the time for filing the affidavit of mechanic's lien has passed;
or
(2) if a lien affidavit has been filed, until the lien claim has
been satisfied or released.

Acts 1983, 68th Leg., p. 3544, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 13, eff. Sept. 1, 1989.

Sec. 53.083. PAYMENT TO CLAIMANT ON DEMAND. (a) The claimant may make
written demand for payment of the claim to an owner authorized to withhold
funds under this subchapter. The demand must give notice to the owner that all
or part of the claim has accrued under Section 53.053 or is past due according
to the agreement between the parties.
(b) The claimant must send a copy of the demand to the original
contractor. The original contractor may give the owner written notice that the
contractor intends to dispute the claim. The original contractor must give the
notice not later than the 30th day after the day he receives the copy of the
demand. If the original contractor does not give the owner timely notice, he
is considered to have assented to the demand and the owner shall pay the claim.
(c) The claimant's demand may accompany the original notice of nonpayment
or of a past-due claim and may be stamped or written in legible form on the
face of the notice.
(d) Unless the lien has been secured, the demand may not be made after
expiration of the time within which the claimant may secure the lien for the
claim.

Acts 1983, 68th Leg., p. 3544, ch. 576, Sec. 1, eff. Jan. 1, 1984.
 Sec. 53.084. OWNER'S LIABILITY. (a) Except for the amount required to
be retained under Subchapter E, the owner is not liable for any amount paid to
the original contractor before the owner is authorized to withhold funds under
this subchapter.
(b) If the owner has received the notices required by Subchapter C or K,
if the lien has been secured, and if the claim has been reduced to final
judgment, the owner is liable and the owner's property is subject to a claim
for any money paid to the original contractor after the owner was authorized to
withhold funds under this subchapter. The owner is liable for that amount in
addition to any amount for which he is liable under Subchapter E.

Acts 1983, 68th Leg., p. 3545, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1997, 75th Leg., ch. 526, Sec. 12, eff. Sept. 1, 1997.

Sec. 53.085. AFFIDAVIT REQUIRED. (a) Any person who furnishes labor or
materials for the construction of improvements on real property shall, if
requested and as a condition of payment for such labor or materials, provide to
the requesting party, or the party's agent, an affidavit stating that the
person has paid each of the person's subcontractors, laborers, or materialmen
in full for all labor and materials provided to the person for the
construction. In the event, however, that the person has not paid each of the
person's subcontractors, laborers, or materialmen in full, the person shall
state in the affidavit the amount owed and the name and, if known, the address
and telephone number of each subcontractor, laborer, or materialman to whom the
payment is owed.
(b) The seller of any real property shall, upon request by the purchaser
or the purchaser's agent prior to closing of the purchase of the real property,
provide to the purchaser or the purchaser's agent, a written affidavit stating
that the seller has paid each of the seller's contractors, laborers, or
materialmen in full for all labor and materials provided to the seller through
the date specified in the affidavit for any construction of improvements on the
real property and that the seller is not indebted to any person, firm, or
corporation by reason of any such construction through the date specified in
the affidavit. In the event that the seller has not paid each of the seller's
contractors, laborers, or materialmen in full for labor and material provided
through the date specified in the affidavit, the seller shall state in the
affidavit the amount owed and the name and, if known, the address and telephone
number of each contractor, laborer, or materialman to whom the payment is owed.
(c) The affidavit may include:
(1) a waiver or release of lien rights or payment bond claims by the
affiant that is conditioned on the receipt of actual payment or collection of
funds when payment is made by check or draft, as provided by Subchapter L;
 (2) a warranty or representation that certain bills or classes of
bills will be paid by the affiant from funds paid in reliance on the affidavit;
and
(3) an indemnification by the affiant for any loss or expense
resulting from false or incorrect information in the affidavit.
(d) A person, including a seller, commits an offense if the person
intentionally, knowingly, or recklessly makes a false or misleading statement
in an affidavit under this section. An offense under this section is a
misdemeanor. A person adjudged guilty of an offense under this section shall
be punished by a fine not to exceed $4,000 or confinement in jail for a term
not to exceed one year or both a fine and confinement. A person may not
receive community supervision for the offense.
(e) A person signing an affidavit under this section is personally liable
for any loss or damage resulting from any false or incorrect information in the
affidavit.

Added by Acts 1987, 70th Leg., ch. 578, Sec. 1, eff. Aug. 31, 1987. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 14, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 13, eff. Sept. 1, 1997.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 271 (H.B. 1456), Sec. 2, eff. January 1,
2012.

SUBCHAPTER E. REQUIRED RETAINAGE FOR BENEFIT OF LIEN CLAIMANTS

Sec. 53.101. REQUIRED RETAINAGE. (a) During the progress of work under
an original contract for which a mechanic's lien may be claimed and for 30 days
after the work is completed, the owner shall retain:
(1) 10 percent of the contract price of the work to the owner; or
(2) 10 percent of the value of the work, measured by the proportion
that the work done bears to the work to be done, using the contract price or,
if there is no contract price, using the reasonable value of the completed
work.
(b) In this section, "owner" includes the owner's agent, trustee, or
receiver.

Acts 1983, 68th Leg., p. 3545, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 15, eff. Sept. 1, 1989.

Sec. 53.102. PAYMENT SECURED BY RETAINAGE. The retained funds secure the
payment of artisans and mechanics who perform labor or service and the payment
of other persons who furnish material, material and labor, or specially
fabricated material for any contractor, subcontractor, agent, or receiver in
the performance of the work.

Acts 1983, 68th Leg., p. 3545, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 53.103. LIEN ON RETAINED FUNDS. A claimant has a lien on the

retained funds if the claimant:
(1) sends the notices required by this chapter in the time and
manner required; and
(2) except as allowed by Section 53.057(f), files an affidavit
claiming a lien not later than the 30th day after the earliest of the date:
(A) the work is completed;
(B) the original contract is terminated; or
(C) the original contractor abandons performance under the
original contract.

Acts 1983, 68th Leg., p. 3545, ch. 576, Sec. 1, eff. Jan. 1, 1984.
Amended by:
Acts 2005, 79th Leg., Ch. 1003 (H.B. 629), Sec. 1, eff. September 1, 2005.
Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 3, eff. September 1,
2011.

Sec. 53.104. PREFERENCES. (a) Individual artisans and mechanics are

entitled to a preference to the retained funds and shall share proportionately
to the extent of their claims for wages and fringe benefits earned.
(b) After payment of artisans and mechanics who are entitled to a
preference under Subsection (a), other participating claimants share
proportionately in the balance of the retained funds.

Acts 1983, 68th Leg., p. 3546, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 16, eff. Sept. 1, 1989.

Sec. 53.105. OWNER'S LIABILITY FOR FAILURE TO RETAIN. (a) If the owner
fails or refuses to comply with this subchapter, the claimants complying with
Subchapter C or this subchapter have a lien, at least to the extent of the
amount that should have been retained from the original contract under which
they are claiming, against the house, building, structure, fixture, or
improvement and all of its properties and against the lot or lots of land
necessarily connected.
(b) The claimants share the lien proportionately in accordance with the
preference provided by Section 53.104.
Acts 1983, 68th Leg., p. 3546, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 2, Sec. 13.02, eff. Aug. 28, 1989; Acts 1989, 71st
Leg., ch. 1138, Sec. 17, eff. Sept. 1, 1989.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 4, eff. September 1,
2011.

Sec. 53.106. AFFIDAVIT OF COMPLETION. (a) An owner may file with the
county clerk of the county in which the property is located an affidavit of
completion. The affidavit must contain:
(1) the name and address of the owner;
(2) the name and address of the original contractor;
(3) a description, legally sufficient for identification, of the
real property on which the improvements are located;
(4) a description of the improvements furnished under the original
contract;
(5) a statement that the improvements under the original contract
have been completed and the date of completion; and
(6) a conspicuous statement that a claimant may not have a lien on
retained funds unless the claimant files an affidavit claiming a lien not later
than the 40th day after the date the work under the original contract is
completed.
(b) A copy of the affidavit must be sent by certified or registered mail
to the original contractor not later than the date the affidavit is filed and
to each claimant who sends a notice of lien liability to the owner under
Section 53.056, 53.057, 53.058, 53.252, or 53.253 not later than the date the
affidavit is filed or the 10th day after the date the owner receives the notice
of lien liability, whichever is later.
(c) A copy of the affidavit must also be sent to each person who
furnishes labor or materials for the property and who furnishes the owner with
a written request for the copy. The owner must furnish the copy to the person
not later than the date the affidavit is filed or the 10th day after the date
the request is received, whichever is later.
(d) Except as provided by this subsection, an affidavit filed under this
section on or before the 10th day after the date of completion of the
improvements is prima facie evidence of the date the work under the original
contract is completed for purposes of this subchapter and Section 53.057. If
the affidavit is filed after the 10th day after the date of completion, the
date of completion for purposes of this subchapter and Section 53.057 is the
date the affidavit is filed. This subsection does not apply to a person to
whom the affidavit was not sent as required by this section.
 (e) Repealed by Acts 1999, 76th Leg., ch. 889, Sec. 12, eff. Sept. 1,
1999.

Added by Acts 1989, 71st Leg., ch. 1138, Sec. 18, eff. Sept. 1, 1989. Amended
by Acts 1997, 75th Leg., ch. 526, Sec. 14, eff. Sept. 1, 1997; Acts 1999, 76th
Leg., ch. 889, Sec. 12, eff. Sept. 1, 1999.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 5, eff. September 1,
2011.

Sec. 53.107. NOTICE RELATING TO TERMINATION OF WORK OR ABANDONMENT OF

PERFORMANCE BY ORIGINAL CONTRACTOR OR OWNER. (a) Not later than the 10th day
after the date an original contract is terminated or the original contractor
abandons performance under the original contract, the owner shall give notice
to each subcontractor who, before the date of termination or abandonment, has:
(1) given notice to the owner as provided by Section 53.056, 53.057,
or 53.058; or
(2) sent to the owner by certified or registered mail a written
request for notice of termination or abandonment.
(b) The notice must contain:
(1) the name and address of the owner;
(2) the name and address of the original contractor;
(3) a description, legally sufficient for identification, of the
real property on which the improvements are located;
(4) a general description of the improvements agreed to be furnished
under the original contract;
(5) a statement that the original contract has been terminated or
that performance under the contract has been abandoned;
(6) the date of the termination or abandonment; and
(7) a conspicuous statement that a claimant may not have a lien on
the retained funds unless the claimant files an affidavit claiming a lien not
later than the 40th day after the date of the termination or abandonment.
(c) A notice sent in compliance with this section on or before the 10th
day after the date of termination or abandonment is prima facie evidence of the
date the original contract was terminated or work was abandoned for purposes of
this subchapter.
(d) If an owner is required to send a notice to a subcontractor under
this section and fails to send the notice, the subcontractor is not required to
comply with Section 53.057 to claim retainage and may claim a lien by filing a
lien affidavit as prescribed by Section 53.052.
(e) This section does not apply to a residential construction project.
Added by Acts 2005, 79th Leg., Ch. 1003 (H.B. 629), Sec. 2, eff. September 1,
2005.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 6, eff. September 1,
2011.

SUBCHAPTER F. PRIORITIES AND PREFERENCES

Sec. 53.121. PREFERENCE OVER OTHER CREDITORS. All subcontractors,

laborers, and materialmen who have a mechanic's lien have preference over other
creditors of the original contractor.

Acts 1983, 68th Leg., p. 3546, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 53.122. EQUALITY OF MECHANIC'S LIENS. (a) Except as provided by

Subchapter E and Section 53.124(e), perfected mechanic's liens are on equal
footing without reference to the date of filing the affidavit claiming the
lien.
(b) If the proceeds of a foreclosure sale of property are insufficient to
discharge all mechanic's liens against the property, the proceeds shall be paid
pro rata on the perfected mechanic's liens on which suit is brought.
(c) This chapter does not affect the contract between the owner and the
original contractor as to the amount, manner, or time of payment of the
contract price.

Acts 1983, 68th Leg., p. 3546, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1995, 74th Leg., ch. 851, Sec. 4, eff. Sept. 1, 1995.

Sec. 53.123. PRIORITY OF MECHANIC'S LIEN OVER OTHER LIENS. (a) Except
as provided by this section, a mechanic's lien attaches to the house, building,
improvements, or railroad property in preference to any prior lien,
encumbrance, or mortgage on the land on which it is located, and the person
enforcing the lien may have the house, building, improvement, or any piece of
the railroad property sold separately.
(b) The mechanic's lien does not affect any lien, encumbrance, or
mortgage on the land or improvement at the time of the inception of the
mechanic's lien, and the holder of the lien, encumbrance, or mortgage need not
be made a party to a suit to foreclose the mechanic's lien.

Acts 1983, 68th Leg., p. 3547, ch. 576, Sec. 1, eff. Jan. 1, 1984.
 Sec. 53.124. INCEPTION OF MECHANIC'S LIEN. (a) Except as provided by
Subsection (e), for purposes of Section 53.123, the time of inception of a
mechanic's lien is the commencement of construction of improvements or delivery
of materials to the land on which the improvements are to be located and on
which the materials are to be used.
(b) The construction or materials under Subsection (a) must be visible
from inspection of the land on which the improvements are being made.
(c) An owner and original contractor may jointly file an affidavit of
commencement with the county clerk of the county in which the land is located
not later than the 30th day after the date of actual commencement of
construction of the improvements or delivery of materials to the land. The
affidavit must contain:
(1) the name and address of the owner;
(2) the name and address of each original contractor, known at the
time to the owner, that is furnishing labor, service, or materials for the
construction of the improvements;
(3) a description, legally sufficient for identification, of the
property being improved;
(4) the date the work actually commenced; and
(5) a general description of the improvement.
(d) An affidavit filed in compliance with this section is prima facie
evidence of the date of the commencement of the improvement described in the
affidavit. The time of inception of a mechanic's lien arising from work
described in an affidavit of commencement is the date of commencement of the
work stated in the affidavit.
(e) The time of inception of a lien that is created under Section
53.021(c), (d), or (e) is the date of recording of an affidavit of lien under
Section 53.052. The priority of a lien claimed by a person entitled to a lien
under Section 53.021(c), (d), or (e) with respect to other mechanic's liens is
determined by the date of recording. A lien created under Section 53.021(c),
(d), or (e) is not valid or enforceable against a grantee or purchaser who
acquires an interest in the real property before the time of inception of the
lien.

Acts 1983, 68th Leg., p. 3547, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 19, eff. Sept. 1, 1989; Acts 1995, 74th
Leg., ch. 851, Sec. 5, eff. Sept. 1, 1995; Acts 1999, 76th Leg., ch. 896, Sec.
2, eff. Sept. 1, 1999; Acts 2003, 78th Leg., ch. 410, Sec. 2, eff. Sept. 1,
2003.

SUBCHAPTER G. RELEASE AND FORECLOSURE; ACTION ON CLAIM

 Sec. 53.151. ENFORCEMENT OF REMEDIES AGAINST MONEY DUE ORIGINAL
CONTRACTOR OR SUBCONTRACTOR. (a) A creditor of an original contractor may not
collect, enforce a security interest against, garnish, or levy execution on the
money due the original contractor or the contractor's surety from the owner,
and a creditor of a subcontractor may not collect, enforce a security interest
against, garnish, or levy execution on the money due the subcontractor, to the
prejudice of the subcontractors, mechanics, laborers, materialmen, or their
sureties.
(b) A surety issuing a payment bond or performance bond in connection
with the improvements has a priority claim over other creditors of its
principal to contract funds to the extent of any loss it suffers or incurs.
That priority does not excuse the surety from paying any obligations that it
may have under its payment bonds.

Acts 1983, 68th Leg., p. 3548, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 20, eff. Sept. 1, 1989.

Sec. 53.152. RELEASE OF CLAIM OR LIEN. (a) When a debt for labor or
materials is satisfied or paid by collected funds, the person who furnished the
labor or materials shall, not later than the 10th day after the date of receipt
of a written request, furnish to the requesting person a release of the
indebtedness and any lien claimed, to the extent of the indebtedness paid. An
owner, the original contractor, or any person making the payment may request
the release.
(b) A release of lien must be in a form that would permit it to be filed
of record.

Acts 1983, 68th Leg., p. 3548, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 21, eff. Sept. 1, 1989.

Sec. 53.153. DEFENSE OF ACTIONS. (a) If an affidavit claiming a

mechanic's lien is filed by a person other than the original contractor, the
original contractor shall defend at his own expense a suit brought on the
claim.
(b) If the suit results in judgment on the lien against the owner or the
owner's property, the owner is entitled to deduct the amount of the judgment
and costs from any amount due the original contractor. If the owner has
settled with the original contractor in full, the owner is entitled to recover
from the original contractor any amount paid for which the original contractor
was originally liable.

Acts 1983, 68th Leg., p. 3548, ch. 576, Sec. 1, eff. Jan. 1, 1984.
 Sec. 53.154. FORECLOSURE. A mechanic's lien may be foreclosed only on
judgment of a court of competent jurisdiction foreclosing the lien and ordering
the sale of the property subject to the lien.

Acts 1983, 68th Leg., p. 3549, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 53.155. TRANSFER OF PROPERTY SOLD. If the house, building,

improvement, or any piece of railroad property is sold separately, the officer
making the sale shall place the purchaser in possession. The purchaser is
entitled to a reasonable time after the date of purchase within which to remove
the purchased property.

Acts 1983, 68th Leg., p. 3549, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 53.156. COSTS AND ATTORNEY'S FEES. In any proceeding to foreclose a

lien or to enforce a claim against a bond issued under Subchapter H, I, or J or
in any proceeding to declare that any lien or claim is invalid or unenforceable
in whole or in part, the court shall award costs and reasonable attorney's fees
as are equitable and just. With respect to a lien or claim arising out of a
residential construction contract, the court is not required to order the
property owner to pay costs and attorney's fees under this section.

Added by Acts 1984, 68th Leg., 2nd C.S., ch. 18, Sec. 4(a), eff. Oct. 2, 1984.
Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 22, eff. Sept. 1, 1989.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 51 (S.B. 539), Sec. 1, eff. September 1,
2011.

Sec. 53.157. DISCHARGE OF LIEN. A mechanic's lien or affidavit claiming

a mechanic's lien filed under Section 53.052 may be discharged of record by:
(1) recording a lien release signed by the claimant under Section
53.152;
(2) failing to institute suit to foreclose the lien in the county in
which the property is located within the period prescribed by Section 53.158,
53.175, or 53.208;
(3) recording the original or certified copy of a final judgment or
decree of a court of competent jurisdiction providing for the discharge;
(4) filing the bond and notice in compliance with Subchapter H;
(5) filing the bond in compliance with Subchapter I; or
(6) recording a certified copy of the order removing the lien under
Section 53.160 and a certificate from the clerk of the court that states that
no bond or deposit as described by Section 53.161 was filed by the claimant
within 30 days after the date the order was entered.

Added by Acts 1989, 71st Leg., ch. 1138, Sec. 23, eff. Sept. 1, 1989. Amended
by Acts 1997, 75th Leg., ch. 526, Sec. 15, eff. Sept. 1, 1997.

Sec. 53.158. PERIOD FOR BRINGING SUIT TO FORECLOSE LIEN. (a) Except as
provided by Subsection (b), suit must be brought to foreclose the lien within
two years after the last day a claimant may file the lien affidavit under
Section 53.052 or within one year after completion, termination, or abandonment
of the work under the original contract under which the lien is claimed,
whichever is later.
(b) For a claim arising from a residential construction project, suit
must be brought to foreclose the lien within one year after the last day a
claimant may file a lien affidavit under Section 53.052 or within one year
after completion, termination, or abandonment of the work under the original
contract under which the lien is claimed, whichever is later.

Added by Acts 1989, 71st Leg., ch. 1138, Sec. 23, eff. Sept. 1, 1989. Amended
by Acts 1997, 75th Leg., ch. 526, Sec. 16, eff. Sept. 1, 1997; Acts 1999, 76th
Leg., ch. 889, Sec. 4, eff. Sept. 1, 1999.

Sec. 53.159. OBLIGATION TO FURNISH INFORMATION. (a) An owner, on

written request, shall furnish the following information within a reasonable
time, but not later than the 10th day after the date the request is received,
to any person furnishing labor or materials for the project:
(1) a description of the real property being improved legally
sufficient to identify it;
(2) whether there is a surety bond and if so, the name and last
known address of the surety and a copy of the bond;
(3) whether there are any prior recorded liens or security interests
on the real property being improved and if so, the name and address of the
person having the lien or security interest; and
(4) the date on which the original contract for the project was
executed.
(b) An original contractor, on written request by a person who furnished
work under the original contract, shall furnish to the person the following
information within a reasonable time, but not later than the 10th day after the
date the request is received:
(1) the name and last known address of the person to whom the
original contractor furnished labor or materials for the construction project;
 (2) whether the original contractor has furnished or has been
furnished a payment bond for any of the work on the construction project and if
so, the name and last known address of the surety and a copy of the bond; and
(3) the date on which the original contract for the project was
executed.
(c) A subcontractor, on written request by an owner of the property being
improved, the original contractor, a surety on a bond covering the original
contract, or any person furnishing work under the subcontract, shall furnish to
the person the following information within a reasonable time, but not later
than the 10th day after the date the request is received:
(1) the name and last known address of each person from whom the
subcontractor purchased labor or materials for the construction project, other
than those materials that were furnished to the project from the
subcontractor's inventory;
(2) the name and last known address of each person to whom the
subcontractor furnished labor or materials for the construction project; and
(3) whether the subcontractor has furnished or has been furnished a
payment bond for any of the work on the construction project and if so, the
name and last known address of the surety and a copy of the bond.
(d) Not later than the 30th day after the date a written request is
received from the owner, the contractor under whom a claim of lien or under
whom a bond is made, or a surety on a bond on which a claim is made, a claimant
for a lien or under a bond shall furnish to the requesting person a copy of any
applicable written agreement, purchase order, or contract and any billing,
statement, or payment request of the claimant reflecting the amount claimed and
the work performed by the claimant for which the claim is made. If requested,
the claimant shall provide the estimated amount due for each calendar month in
which the claimant has performed labor or furnished materials.
(e) If a person from whom information is requested does not have a direct
contractual relationship on the project with the person requesting the
information, the person from whom information is requested, other than a
claimant requested to furnish information under Subsection (d), may require
payment of the actual costs, not to exceed $25, in furnishing the requested
information.
(f) A person, other than a claimant requested to furnish information
under Subsection (d), who fails to furnish information as required by this
section is liable to the requesting person for that person's reasonable and
necessary costs incurred in procuring the requested information.
(g) Expired.

Added by Acts 1989, 71st Leg., ch. 1138, Sec. 23, eff. Sept. 1, 1989.
Amended by:
 Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 7, eff. September 1,
2011.

Sec. 53.160. SUMMARY MOTION TO REMOVE INVALID OR UNENFORCEABLE LIEN. (a)

In a suit brought to foreclose a lien or to declare a claim or lien invalid or
unenforceable, a party objecting to the validity or enforceability of the claim
or lien may file a motion to remove the claim or lien. The motion must be
verified and state the legal and factual basis for objecting to the validity or
enforceability of the claim or lien. The motion may be accompanied by
supporting affidavits.
(b) The grounds for objecting to the validity or enforceability of the
claim or lien for purposes of the motion are limited to the following:
(1) notice of claim was not furnished to the owner or original
contractor as required by Section 53.056, 53.057, 53.058, 53.252, or 53.253;
(2) an affidavit claiming a lien failed to comply with Section
53.054 or was not filed as required by Section 53.052;
(3) notice of the filed affidavit was not furnished to the owner or
original contractor as required by Section 53.055;
(4) the deadlines for perfecting a lien claim for retainage under
this chapter have expired and the owner complied with the requirements of
Section 53.101 and paid the retainage and all other funds owed to the original
contractor before:
(A) the claimant perfected the lien claim; and
(B) the owner received a notice of the claim as required by
this chapter;
(5) all funds subject to the notice of a claim to the owner and a
notice regarding the retainage have been deposited in the registry of the court
and the owner has no additional liability to the claimant;
(6) when the lien affidavit was filed on homestead property:
(A) no contract was executed or filed as required by Section
53.254;
(B) the affidavit claiming a lien failed to contain the notice
as required by Section 53.254; or
(C) the notice of the claim failed to include the statement
required by Section 53.254; and
(7) the claimant executed a valid and enforceable waiver or release
of the claim or lien claimed in the affidavit.
(c) The claimant is not required to file a response. The claimant and
any other party that has appeared in the proceeding must be notified by at
least 21 days before the date of the hearing on the motion. A motion may not
be heard before the 21st day after the date the claimant answers or appears in
the proceeding.
(d) At the hearing on the motion, the burden is on:
(1) the claimant to prove that the notice of claim and affidavit of
lien were furnished to the owner and original contractor as required by this
chapter; and
(2) the movant to establish that the lien should be removed for any
other ground authorized by this section.
(e) The court shall promptly determine a motion to remove a claim or lien
under this section. If the court determines that the movant is not entitled to
remove the lien, the court shall enter an order denying the motion. If the
court determines that the movant is entitled to remove the lien, the court
shall enter an order removing the lien claimed in the lien affidavit. A party
to the proceeding may not file an interlocutory appeal from the court's order.
(f) Any admissible evidence offered at the hearing may be admitted in the
trial of the case. The court's order under Subsection (e) is not admissible as
evidence in determining the validity and enforceability of the claim or lien.

Added by Acts 1997, 75th Leg., ch. 526, Sec. 17, eff. Sept. 1, 1997.
Amended by:
Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 8, eff. September 1,
2011.

Sec. 53.161. BOND REQUIREMENTS AFTER ORDER TO REMOVE. (a) In the order
removing a lien, the court shall set the amount of security that the claimant
may provide in order to stay the removal of the claim or lien. The sum must be
an amount that the court determines is a reasonable estimate of the costs and
attorney's fees the movant is likely to incur in the proceeding to determine
the validity or enforceability of the lien. The sum may not exceed the amount
of the lien claim.
(b) The court shall stay the order removing the lien if the claimant
files a bond or a deposit in lieu of a bond in the amount set in the order with
the clerk of the court not later than the 30th day after the date the order is
entered by the court unless, for good cause, the court orders a later date for
filing the bond or the deposit in lieu of a bond. If the court fails to set
the amount of the security required, the amount required is the amount of the
lien claim.
(c) The bond must be:
(1) executed by a corporate surety authorized to do business in this
state and licensed by this state to execute bonds as surety; and
 (2) conditioned on the claimant's payment of any final judgment
rendered against the claimant in the proceeding for attorney's fees and costs
to the movant under Section 53.156.
(d) In lieu of filing a bond, the claimant may deposit in the amount set
by the court for the surety bond:
(1) cash;
(2) a negotiable obligation of the federal government or a federal
agency; or
(3) a negotiable obligation of a financial institution chartered by
the federal or state government that is insured by the federal government or a
federal agency.
(e) A deposit made under Subsection (d) must be conditioned in the same
manner as a surety bond. Any interest accrued on the deposit amount is a part
of the deposit.
(f) If the claimant fails to file the bond or the deposit in lieu of the
bond in compliance with this section, the owner may file:
(1) a certified copy of the order; and
(2) a certificate from the clerk of the court stating that:
(A) no bond or deposit in lieu of the bond was filed within 30
days after the date the order was entered by the court; and
(B) no order staying the order to remove the lien was entered
by the court.
(g) The claim or lien is removed and extinguished as to a creditor or
subsequent purchaser for valuable consideration who obtains an interest in the
property after the certified copy of the order and certificate of the clerk of
the court are filed with the county clerk. The removal of the lien does not
constitute a release of the liability of the owner, if any, to the claimant.

Added by Acts 1997, 75th Leg., ch. 526, Sec. 17, eff. Sept. 1, 1997.

Sec. 53.162. REVIVAL OF REMOVED LIEN. (a) If an order removing the lien
is not stayed as provided by Section 53.161 and the claimant later obtains a
final judgment in the suit establishing the validity and ordering the
foreclosure of the lien, the claimant may file a certified copy of the final
judgment with the county clerk.
(b) The filed judgment revives the lien, and the claimant may foreclose
the lien.
(c) A lien revived under this section is void as to a creditor or
subsequent purchaser for valuable consideration who obtained an interest in the
property:
(1) after the order removing the lien and the certificate from the
clerk of the court was filed with the county clerk; and
 (2) before the final judgment reviving the lien was filed with the
county clerk.

Added by Acts 1997, 75th Leg., ch. 526, Sec. 17, eff. Sept. 1, 1997.

SUBCHAPTER H. BOND TO INDEMNIFY AGAINST LIEN

Sec. 53.171. BOND. (a) If a lien, other than a lien granted by the
owner in a written contract, is fixed or is attempted to be fixed by a recorded
instrument under this chapter, any person may file a bond to indemnify against
the lien.
(b) The bond shall be filed with the county clerk of the county in which
the property subject to the lien is located.
(c) A mechanic's lien claim against an owner's property is discharged
after:
(1) a bond that complies with Section 53.172 is filed;
(2) the notice of the bond is issued as provided by Section 53.173;
and
(3) the bond and notice are recorded as provided by Section 53.174.

Acts 1983, 68th Leg., p. 3549, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 24, 39(1), eff. Sept. 1, 1989; Acts 1997,
75th Leg., ch. 526, Sec. 18, eff. Sept. 1, 1997.

Sec. 53.172. BOND REQUIREMENTS. The bond must:

(1) describe the property on which the liens are claimed;
(2) refer to each lien claimed in a manner sufficient to identify
it;
(3) be in an amount that is double the amount of the liens referred
to in the bond unless the total amount claimed in the liens exceeds $40,000, in
which case the bond must be in an amount that is the greater of 1-1/2 times the
amount of the liens or the sum of $40,000 and the amount of the liens;
(4) be payable to the parties claiming the liens;
(5) be executed by:
(A) the party filing the bond as principal; and
(B) a corporate surety authorized and admitted to do business
under the law in this state and licensed by this state to execute the bond as
surety, subject to Section 1, Chapter 87, Acts of the 56th Legislature, Regular
Session, 1959 (Article 7.19-1, Vernon's Texas Insurance Code); and
(6) be conditioned substantially that the principal and sureties
will pay to the named obligees or to their assignees the amount that the named
obligees would have been entitled to recover if their claims had been proved to
be valid and enforceable liens on the property.

Acts 1983, 68th Leg., p. 3549, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 25, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 1132, Sec. 2, eff. Sept. 1, 1997.

Sec. 53.173. NOTICE OF BOND. (a) After the bond is filed, the county
clerk shall issue notice of the bond to all named obligees.
(b) A copy of the bond must be attached to the notice.
(c) The notice must be served on each obligee by mailing a copy of the
notice and the bond to the obligee by certified United States mail, return
receipt requested, addressed to the claimant at the address stated in the lien
affidavit for the obligee.
(d) If the claimant's lien affidavit does not state the claimant's
address, the notice is not required to be mailed to the claimant.

Acts 1983, 68th Leg., p. 3550, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 26, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 19, eff. Sept. 1, 1997.

Sec. 53.174. RECORDING OF BOND AND NOTICE. (a) The county clerk shall
record the bond, the notice, and a certificate of mailing in the real property
records.
(b) In acquiring an interest in or insuring title to real property, a
purchaser, insurer of title, or lender may rely on and is absolutely protected
by the record of the bond and the notice to the same extent as if the lien
claimant had filed a release of lien in the real property records.

Acts 1983, 68th Leg., p. 3550, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 27, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 20, eff. Sept. 1, 1997.

Sec. 53.175. ACTION ON BOND. (a) A party making or holding a lien claim
may not sue on the bond later than one year after the date on which the notice
is served or after the date on which the underlying lien claim becomes
unenforceable under Section 53.158.
(b) The bond is not exhausted by one action against it. Each named
obligee or assignee of an obligee may maintain a separate suit on the bond in
any court of jurisdiction in the county in which the real property is located.
Acts 1983, 68th Leg., p. 3550, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 28, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 21, eff. Sept. 1, 1997.

SUBCHAPTER I. BOND TO PAY LIENS OR CLAIMS

Sec. 53.201. BOND. (a) An original contractor who has a written

contract with the owner may furnish at any time a bond for the benefit of
claimants.
(b) If a valid bond is filed, a claimant may not file suit against the
owner or the owner's property and the owner is relieved of obligations under
Subchapter D or E.

Acts 1983, 68th Leg., p. 3551, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1997, 75th Leg., ch. 526, Sec. 22, eff. Sept. 1, 1997.

Sec. 53.202. BOND REQUIREMENTS. The bond must:

(1) be in a penal sum at least equal to the total of the original
contract amount;
(2) be in favor of the owner;
(3) have the written approval of the owner endorsed on it;
(4) be executed by:
(A) the original contractor as principal; and
(B) a corporate surety authorized and admitted to do business
in this state and licensed by this state to execute bonds as surety, subject to
Section 1, Chapter 87, Acts of the 56th Legislature, Regular Session, 1959
(Article 7.19-1, Vernon's Texas Insurance Code);
(5) be conditioned on prompt payment for all labor, subcontracts,
materials, specially fabricated materials, and normal and usual extras not
exceeding 15 percent of the contract price; and
(6) clearly and prominently display on the bond or on an attachment
to the bond:
(A) the name, mailing address, physical address, and telephone
number, including the area code, of the surety company to which any notice of
claim should be sent; or
(B) the toll-free telephone number maintained by the Texas
Department of Insurance under Subchapter B, Chapter 521, Insurance Code, and a
statement that the address of the surety company to which any notice of claim
should be sent may be obtained from the Texas Department of Insurance by
calling the toll-free telephone number.
Acts 1983, 68th Leg., p. 3551, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 29, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 1132, Sec. 2, eff. Sept. 1, 1997; Acts 2001, 77th Leg., ch. 380,
Sec. 5, eff. Sept. 1, 2001.
Amended by:
Acts 2005, 79th Leg., Ch. 728 (H.B. 2018), Sec. 11.158, eff. September 1,
2005.

Sec. 53.203. RECORDING OF BOND AND CONTRACT. (a) The bond and the
contract between the original contractor and the owner shall be filed with the
county clerk of the county in which is located all or part of the owner's
property on which the construction or repair is being performed or is to be
performed. A memorandum of the contract or a copy of the contract may be
substituted for the original.
(b) The plans, specifications, and general conditions of the contract are
not required to be filed.
(c) The county clerk shall record the bond and place the contract on file
in the clerk's office and shall index and cross-index both in the names of the
original contractor and the owner in records kept for that purpose.
(d) On request and payment of a reasonable fee, the county clerk shall
furnish a copy of the bond and contract to any person.
(e) In any court of this state or in the United States, a copy of the
bond and contract certified by the county clerk constitutes prima facie
evidence of the contents, execution, delivery, and filing of the originals.

Acts 1983, 68th Leg., p. 3551, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1987, 70th Leg., ch. 683, Sec. 1, eff. Aug. 31, 1987; Acts 1989, 71st
Leg., ch. 1138, Sec. 30, eff. Sept. 1, 1989.

Sec. 53.204. RELIANCE ON RECORD. A purchaser, lender, or other person

acquiring an interest in the owner's property or an insurer of title is
entitled to rely on the record of the bond and contract as constituting payment
of all claims and liens for labor, subcontracts, materials, or specially
fabricated materials incurred by the original contractor as if the purchaser,
lender, or other person acquiring an interest in the owner's property or an
insurer of title were the owner who approved, accepted, and endorsed the bond
and as if each person furnishing labor or materials for the work performed
under the original contract, other than the original contractor, had filed a
complete release and relinquishment of lien of record.

Acts 1983, 68th Leg., p. 3552, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 31, eff. Sept. 1, 1989.
 Sec. 53.205. ENFORCEABLE CLAIMS. (a) The bond protects all persons with
a claim that is:
(1) perfected in the manner prescribed for fixing a lien under
Subchapter C or, if the claim relates to a residential construction project,
under Subchapter K; or
(2) perfected in the manner prescribed by Section 53.206.
(b) A claim or the rights to a claim under the bond may be assigned.

Acts 1983, 68th Leg., p. 3552, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1999, 76th Leg., ch. 889, Sec. 5, eff. Sept. 1, 1999.

Sec. 53.206. PERFECTION OF CLAIM. (a) To perfect a claim against a bond

in a manner other than that prescribed by Subchapter C or K for fixing a
lien, a person must:
(1) give to the original contractor all applicable notices under the
appropriate subchapter; and
(2) give to the surety on the bond, instead of the owner, all
notices under the appropriate subchapter required to be given to the owner.
(b) To perfect a claim under this section, a person is not required to:
(1) give notice to the surety under Section 53.057, unless the
claimant has a direct contractual relationship with the original contractor and
the agreed retainage is in excess of 10 percent of the contract;
(2) give notice to the surety under Section 53.058(b) or, if the
claim relates to a residential construction project, under Section 53.253(c);
or
(3) file any affidavit with the county clerk.
(c) For the claim to be valid, a person must give notice in the time and
manner required by this section, but the content of the notices need only
provide fair notice of the amount and the nature of the claim asserted.
(d) A person satisfies the requirements of this section relating to
providing notice to the surety if the person mails the notice by certified or
registered mail to the surety:
(1) at the address stated on the bond or on an attachment to the
bond;
(2) at the address on file with the Texas Department of Insurance;
or
(3) at any other address allowed by law.

Acts 1983, 68th Leg., p. 3552, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 32, eff. Sept. 1, 1989; Acts 1999, 76th
Leg., ch. 889, Sec. 6, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 380, Sec.
6, eff. Sept. 1, 2001.

Sec. 53.207. OWNER'S NOTICE OF CLAIM TO SURETY. (a) If the owner

receives any of the notices or a lien is fixed under Subchapter C or K , the
owner shall mail to the surety on the bond a copy of all notices received.
(b) Failure 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 of this subchapter, nor does that failure impose any
liability on the owner.

Acts 1983, 68th Leg., p. 3553, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1999, 76th Leg., ch. 889, Sec. 7, eff. Sept. 1, 1999.

Sec. 53.208. ACTION ON BOND. (a) A claimant may sue the principal and
surety on the bond either jointly or severally, if his claim remains unpaid for
60 days after the claimant perfects the claim.
(b) The claimant may sue for the amount of the claim and court costs.
(c) The suit must be brought in the county in which the property being
improved is located.
(d) 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 his claim. If the
bond is not recorded at the time the lien is filed, the claimant must sue on
the bond within two years following perfection of his claim.

Acts 1983, 68th Leg., p. 3553, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 33, eff. Sept. 1, 1989.

Sec. 53.210. CLAIMS IN EXCESS OF BOND AMOUNT. If valid claims against

the bond exceed the penal sum of the bond, each claimant is entitled to a pro
rata share of the penal sum.

Acts 1983, 68th Leg., p. 3553, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 53.211. ATTEMPTED COMPLIANCE. (a) A bond shall be construed to

comply with this subchapter, and the rights and remedies on the bond are
enforceable in the same manner as on other bonds under this subchapter, if the
bond:
(1) is furnished and filed in attempted compliance with this
subchapter; or
(2) evidences by its terms intent to comply with this subchapter.
 (b) Any provision in any payment bond furnished or filed in attempted
compliance with this subchapter that expands or restricts the rights or
liabilities provided under this chapter shall be disregarded and the provisions
of this subchapter shall be read into that bond.

Acts 1983, 68th Leg., p. 3554, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 34, eff. Sept. 1, 1989.

SUBCHAPTER J. LIEN ON MONEY DUE PUBLIC WORKS CONTRACTOR

Sec. 53.231. LIEN. (a) A person who furnishes material or labor to a

contractor under a prime contract with a governmental entity other than a
municipality or a joint board created under Subchapter D, Chapter 22,
Transportation Code, that does not exceed $25,000 and that is for public
improvements in this state and who gives notice required by this subchapter has
a lien on the money, bonds, or warrants due the contractor for the
improvements.
(b) A person who furnishes material or labor to a contractor under a
prime contract with a municipality or a joint board created under Subchapter D,
Chapter 22, Transportation Code, that does not exceed $50,000 and that is for
public improvements in this state and who gives notice required by this
subchapter has a lien on the money, bonds, or warrants due the contractor for
the improvements.

Acts 1983, 68th Leg., p. 3554, ch. 576, Sec. 1, eff. Jan. 1, 1984.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 1304 (H.B. 2515), Sec. 2, eff. September
1, 2009.

Sec. 53.232. TO WHOM NOTICE GIVEN; MANNER. The lien claimant must send
written notice of his claim by registered or certified mail to:
(1) the officials of the state, county, town, or municipality whose
duty it is to pay the contractor; and
(2) the contractor at the contractor's last known business or
residence address.

Acts 1983, 68th Leg., p. 3554, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 53.233. CONTENTS OF NOTICE. (a) Whether based on written or oral

agreement, the notice must contain:
(1) the amount claimed;
 (2) the name of the party to whom the materials were delivered or
for whom the labor was performed;
(3) the dates and place of delivery or performance;
(4) a description reasonably sufficient to identify the materials
delivered or labor performed and the amount due;
(5) a description reasonably sufficient to identify the project for
which the material was delivered or the labor performed; and
(6) the claimant's business address.
(b) The notice must be accompanied by a statement under oath that the
amount claimed is just and correct and that all payments, lawful offsets, and
credits known to the affiant have been allowed.

Acts 1983, 68th Leg., p. 3554, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 35, eff. Sept. 1, 1989.

Sec. 53.234. TIME FOR NOTICE. The lien claimant must give notice not
later than the 15th day of the second month following the month in which the
labor was performed or the material furnished.

Acts 1983, 68th Leg., p. 3555, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 36, eff. Sept. 1, 1989.
Amended by:
Acts 2009, 81st Leg., R.S., Ch. 1304 (H.B. 2515), Sec. 3, eff. September
1, 2009.

Sec. 53.235. OFFICIAL TO RETAIN FUNDS. A public official who receives

the notice may not pay all of the money, bonds, or warrants due the contractor,
but shall retain enough to pay the claim for which notice is given.

Acts 1983, 68th Leg., p. 3555, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 53.236. BOND FOR RELEASE OF LIEN. (a) If a claim is filed

attempting to fix a lien under this subchapter, the contractor against whom the
claim is made may file a bond with the officials of the state, county, town, or
municipality whose duty it is to pay the money, bonds, or warrants to the
contractor.
(b) If the bond is approved by the proper official, its filing releases
and discharges all liens fixed or attempted to be fixed by the filing of a
claim, and the appropriate officials shall pay the money, bonds, or warrants to
the contractor or the contractor's assignee.

Acts 1983, 68th Leg., p. 3555, ch. 576, Sec. 1, eff. Jan. 1, 1984.
 Sec. 53.237. BOND REQUIREMENTS. The bond must be:
(1) in an amount double the amount of the claims filed;
(2) payable to the claimants;
(3) executed by:
(A) the party filing the bond as principal; and
(B) a corporate surety authorized, admitted to do business, and
licensed by the law of this state to execute the bond as surety; and
(4) conditioned that:
(A) the principal and surety will pay to the obligees named or
to their assignees the amount of the claims or the portions of the claims
proved to be liens under this subchapter; and
(B) the principal and surety will pay all court costs adjudged
against the principal in actions brought by a claimant on the bond.

Acts 1983, 68th Leg., p. 3555, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 37, eff. Sept. 1, 1989.

Sec. 53.238. NOTICE OF BOND. The official with whom the bond is filed
shall send an exact copy of the bond by registered mail or certified mail,
return receipt requested, to all claimants.

Acts 1983, 68th Leg., p. 3556, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 53.239. ACTION ON BOND. (a) A claimant must sue on the bond within
six months after the bond is filed.
(b) The bond is not exhausted by one action on it. Each obligee or his
assignee may maintain a separate suit on the bond in any court of jurisdiction.

Acts 1983, 68th Leg., p. 3556, ch. 576, Sec. 1, eff. Jan. 1, 1984.

SUBCHAPTER K. RESIDENTIAL CONSTRUCTION PROJECTS

Sec. 53.251. PROCEDURES FOR RESIDENTIAL CONSTRUCTION PROJECTS. (a) This

subchapter applies only to residential construction projects.
(b) A person must comply with this subchapter in addition to the other
applicable provisions of this chapter to perfect a lien that arises from a
claim resulting from a residential construction project.

Added by Acts 1997, 75th Leg., ch. 526, Sec. 23, eff. Sept. 1, 1997.

Sec. 53.252. DERIVATIVE CLAIMANT: NOTICE TO OWNER OR ORIGINAL

CONTRACTOR. (a) A claimant other than an original contractor must give the
notice prescribed by this section for the lien to be valid. If the property
that is the subject of the lien is a homestead, the notice must also comply
with Section 53.254.
(b) The claimant must give to the owner or reputed owner and the original
contractor written notice of the unpaid balance. The claimant must give the
notice not later than the 15th day of the second month following each month in
which all or part of the claimant's labor was performed or material or
specially fabricated material was delivered.
(c) To authorize the owner to withhold funds under Subchapter D, the
notice to the owner must state that 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 payments from the contractor for payment of
the claim; or
(2) the claim is otherwise paid or settled.
(d) The notice must be sent by registered or certified mail and must be
addressed to the owner or reputed owner and the original contractor, as
applicable, at the person's last known business or residence address.
(e) A copy of the statement or billing in the usual and customary form is
sufficient as notice under this section.

Added by Acts 1997, 75th Leg., ch. 526, Sec. 23, eff. Sept. 1, 1997.

Sec. 53.253. DERIVATIVE CLAIMANT: NOTICE FOR SPECIALLY FABRICATED ITEMS.

(a) If specially fabricated materials have not been delivered to the property
or incorporated in the residential construction project, the claimant who
specially fabricates material for incorporation in the residential construction
project must give notice under this section for the lien to be valid.
(b) Once the specially fabricated materials have been delivered, the
claimant must give notice under Section 53.252.
(c) The claimant must give the owner or reputed owner notice not later
than the 15th day of the second month after the month in which the claimant
receives and accepts the order for the material. If the indebtedness is
incurred by a person other than the original contractor, the claimant must also
give notice within that time to the original contractor.
(d) The notice must contain:
(1) a statement that the order has been received and accepted; and
(2) the price of the order.
(e) The notice must be sent by registered or certified mail to the last
known business or residence address of the owner or the reputed owner or the
original contractor, as applicable.
 (f) The lien of a claimant who accepts an order but fails to give notice
under this section is valid as to delivered items if the claimant has given
notice under Section 53.252.

Added by Acts 1997, 75th Leg., ch. 526, Sec. 23, eff. Sept. 1, 1997.

Sec. 53.254. HOMESTEAD. (a) To fix a lien on a homestead, the person

who is to furnish material or perform labor and the owner must execute a
written contract setting forth the terms of the agreement.
(b) The contract must be executed before the material is furnished or the
labor is performed.
(c) If the owner is married, the contract must be signed by both spouses.
(d) If the contract is made by an original contractor, the contract
inures to the benefit of all persons who labor or furnish material for the
original contractor.
(e) The contract must be filed with the county clerk of the county in
which the homestead is located. The county clerk shall record the contract in
records kept for that purpose.
(f) An affidavit for lien filed under this subchapter that relates to a
homestead must contain the following notice conspicuously printed, stamped, or
typed in a size equal to at least 10-point boldface or the computer equivalent,
at the top of the page:
"NOTICE: THIS IS NOT A LIEN. THIS IS ONLY AN AFFIDAVIT CLAIMING A LIEN."
(g) For the lien on a homestead to be valid, the notice required to be
given to the owner under Section 53.252 must include or have attached the
following statement:
"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."

Added by Acts 1997, 75th Leg., ch. 526, Sec. 23, eff. Sept. 1, 1997.

Sec. 53.255. DISCLOSURE STATEMENT REQUIRED FOR RESIDENTIAL CONSTRUCTION

CONTRACT. (a) Before a residential construction contract is executed by the
owner, the original contractor shall deliver to the owner a disclosure
statement described by this section.
(b) The disclosure statement must read substantially similar to the
following:
"KNOW YOUR RIGHTS AND RESPONSIBILITIES UNDER THE LAW. You are about to
enter into a transaction to build a new home or remodel existing residential
property. Texas law requires your contractor to provide you with this brief
overview of some of your rights, responsibilities, and risks in this
transaction.
"CONVEYANCE TO CONTRACTOR NOT REQUIRED. Your contractor may not require
you to convey your real property to your contractor as a condition to the
agreement for the construction of improvements on your property.
"KNOW YOUR CONTRACTOR. Before you enter into your agreement for the
construction of improvements to your real property, make sure that you have
investigated your contractor. Obtain and verify references from other people
who have used the contractor for the type and size of construction project on
your property.
"GET IT IN WRITING. Make sure that you have a written agreement with your
contractor that includes: (1) a description of the work the contractor is to
perform; (2) the required or estimated time for completion of the work; (3)
the cost of the work or how the cost will be determined; and (4) the procedure
and method of payment, including provisions for statutory retainage and
conditions for final payment. If your contractor made a promise, warranty, or
representation to you concerning the work the contractor is to perform, make
sure that promise, warranty, or representation is specified in the written
agreement. An oral promise that is not included in the written agreement may
not be enforceable under Texas law.
"READ BEFORE YOU SIGN. Do not sign any document before you have read and
understood it. NEVER SIGN A DOCUMENT THAT INCLUDES AN UNTRUE STATEMENT. Take
your time in reviewing documents. If you borrow money from a lender to pay for
the improvements, you are entitled to have the loan closing documents furnished
to you for review at least one business day before the closing. Do not waive
this requirement unless a bona fide emergency or another good cause exists, and
make sure you understand the documents before you sign them. If you fail to
comply with the terms of the documents, you could lose your property. You are
entitled to have your own attorney review any documents. If you have any
question about the meaning of a document, consult an attorney.
"GET A LIST OF SUBCONTRACTORS AND SUPPLIERS. Before construction
commences, your contractor is required to provide you with a list of the
subcontractors and suppliers the contractor intends to use on your project.
Your contractor is required to supply updated information on any subcontractors
and suppliers added after the list is provided. Your contractor is not
required to supply this information if you sign a written waiver of your rights
to receive this information.
"MONITOR THE WORK. Lenders and governmental authorities may inspect the
work in progress from time to time for their own purposes. These inspections
are not intended as quality control inspections. Quality control is a matter
for you and your contractor. To ensure that your home is being constructed in
accordance with your wishes and specifications, you should inspect the work
yourself or have your own independent inspector review the work in progress.
"MONITOR PAYMENTS. If you use a lender, your lender is required to provide
you with a periodic statement showing the money disbursed by the lender from
the proceeds of your loan. Each time your contractor requests payment from you
or your lender for work performed, your contractor is also required to furnish
you with a disbursement statement that lists the name and address of each
subcontractor or supplier that the contractor intends to pay from the requested
funds. Review these statements and make sure that the money is being properly
disbursed.
"CLAIMS BY SUBCONTRACTORS AND SUPPLIERS. Under Texas law, if a
subcontractor or supplier who furnishes labor or materials for the construction
of improvements on your property is not paid, you may become liable and your
property may be subject to a lien for the unpaid amount, even if you have not
contracted directly with the subcontractor or supplier. To avoid liability,
you should take the following actions:
(1) If you receive a written notice from a subcontractor or
supplier, you should withhold payment from your contractor for the amount of
the claim stated in the notice until the dispute between your contractor and
the subcontractor or supplier is resolved. If your lender is disbursing money
directly to your contractor, you should immediately provide a copy of the
notice to your lender and instruct the lender to withhold payment in the amount
of the claim stated in the notice. If you continue to pay the contractor after
receiving the written notice without withholding the amount of the claim, you
may be liable and your property may be subject to a lien for the amount you
failed to withhold.
(2) During construction and for 30 days after final completion,
termination, or abandonment of the contract by the contractor, you should
withhold or cause your lender to withhold 10 percent of the amount of payments
made for the work performed by your contractor. This is sometimes referred to
as "statutory retainage.' If you choose not to withhold the 10 percent for at
least 30 days after final completion, termination, or abandonment of the
contract by the contractor and if a valid claim is timely made by a claimant
and your contractor fails to pay the claim, you may be personally liable and
your property may be subject to a lien up to the amount that you failed to
withhold.
"If a claim is not paid within a certain time period, the claimant is
required to file a mechanic's lien affidavit in the real property records in
the county where the property is located. A mechanic's lien affidavit is not a
lien on your property, but the filing of the affidavit could result in a court
imposing a lien on your property if the claimant is successful in litigation to
enforce the lien claim.
"SOME CLAIMS MAY NOT BE VALID. When you receive a written notice of a
claim or when a mechanic's lien affidavit is filed on your property, you should
know your legal rights and responsibilities regarding the claim. Not all
claims are valid. A notice of a claim by a subcontractor or supplier is
required to be sent, and the mechanic's lien affidavit is required to be filed,
within strict time periods. The notice and the affidavit must contain certain
information. All claimants may not fully comply with the legal requirements to
collect on a claim. If you have paid the contractor in full before receiving a
notice of a claim and have fully complied with the law regarding statutory
retainage, you may not be liable for that claim. Accordingly, you should
consult your attorney when you receive a written notice of a claim to determine
the true extent of your liability or potential liability for that claim.
"OBTAIN A LIEN RELEASE AND A BILLS-PAID AFFIDAVIT. When you receive a
notice of claim, do not release withheld funds without obtaining a signed and
notarized release of lien and claim from the claimant. You can also reduce the
risk of having a claim filed by a subcontractor or supplier by requiring as a
condition of each payment made by you or your lender that your contractor
furnish you with an affidavit stating that all bills have been paid. Under
Texas law, on final completion of the work and before final payment, the
contractor is required to furnish you with an affidavit stating that all bills
have been paid. If the contractor discloses any unpaid bill in the affidavit,
you should withhold payment in the amount of the unpaid bill until you receive
a waiver of lien or release from that subcontractor or supplier.
"OBTAIN TITLE INSURANCE PROTECTION. You may be able to obtain a title
insurance policy to insure that the title to your property and the existing
improvements on your property are free from liens claimed by subcontractors and
suppliers. If your policy is issued before the improvements are completed and
covers the value of the improvements to be completed, you should obtain, on the
completion of the improvements and as a condition of your final payment, a
'completion of improvements' policy endorsement. This endorsement will protect
your property from liens claimed by subcontractors and suppliers that may arise
from the date the original title policy is issued to the date of the
endorsement."
(c) The failure of a contractor to comply with this section does not
invalidate a lien under this chapter, a contract lien, or a deed of trust.

Added by Acts 1997, 75th Leg., ch. 526, Sec. 23, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 889, Sec. 8, eff. Sept. 1, 1999.

Sec. 53.256. LIST OF SUBCONTRACTORS AND SUPPLIERS. (a) Except as

provided by Subsection (d), for the construction of improvements under a
residential construction contract, the original contractor shall:
(1) furnish to the owner before the commencement of construction a
written list that identifies by name, address, and telephone number each
subcontractor and supplier the contractor intends to use in the work to be
performed; and
(2) provide the owner with an updated list of subcontractors and
suppliers not later than the 15th day after the date a subcontractor or
supplier is added or deleted.
(b) The list must contain the following notice conspicuously printed,
stamped, or typed in a size equal to at least 10-point boldface or the computer
equivalent:
"NOTICE: THIS LIST OF SUBCONTRACTORS AND SUPPLIERS MAY NOT BE A FINAL
LISTING. UNLESS YOU SIGN A WAIVER OF YOUR RIGHT TO RECEIVE UPDATED INFORMATION,
THE CONTRACTOR IS REQUIRED BY LAW TO SUPPLY UPDATED INFORMATION, AS THE
INFORMATION BECOMES AVAILABLE, FOR EACH SUBCONTRACTOR OR SUPPLIER USED IN THE
WORK PERFORMED ON YOUR RESIDENCE."
(c) The failure of a contractor to comply with this section does not
invalidate a lien under this chapter, a contract lien, or a deed of trust.
(d) An owner may waive the right to receive the list of subcontractors
and suppliers or any updated information required by this section only as
provided by this subsection. The waiver must be in writing and may be included
in the residential construction contract. If the waiver is not included as a
provision of the residential construction contract, the separate waiver
statement must be signed by the owner. The waiver must be conspicuously
printed in at least 10-point bold-faced type and read substantially similar to
the following:
"WAIVER OF THE LIST OF SUBCONTRACTORS AND SUPPLIERS. AN OWNER IS NOT
REQUIRED TO WAIVE THE RIGHT GRANTED BY SECTION 53.256, PROPERTY CODE, TO
RECEIVE FROM THE CONTRACTOR AN ORIGINAL OR UPDATED LIST OF SUBCONTRACTORS AND
SUPPLIERS.
 "BY SIGNING THIS DOCUMENT, I AGREE TO WAIVE MY RIGHT TO RECEIVE FROM THE
CONTRACTOR AN ORIGINAL OR UPDATED LIST OF SUBCONTRACTORS AND SUPPLIERS.
"I UNDERSTAND AND ACKNOWLEDGE THAT, AFTER SIGNING THIS DOCUMENT, THIS
WAIVER MAY NOT BE CANCELED AT A LATER DATE.
"I HAVE VOLUNTARILY CONSENTED TO THIS WAIVER."

Added by Acts 1997, 75th Leg., ch. 526, Sec. 23, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 889, Sec. 9, eff. Sept. 1, 1999.

Sec. 53.257. PROVISIONS RELATED TO CLOSING OF LOAN FOR CONSTRUCTION OF

IMPROVEMENTS. (a) If the owner is obtaining third-party financing for the
construction of improvements under a residential construction contract, the
lender shall deliver to the owner all documentation relating to the closing of
the loan not later than one business day before the date of the closing. If a
bona fide emergency or another good cause exists and the lender obtains the
written consent of the owner, the lender may provide the documentation to the
owner or the lender may modify previously provided documentation on the date of
closing.
(b) The lender shall provide to the owner the disclosure statement
described by Section 53.255(b). The disclosure statement must be provided to
the owner before the date of closing. If a bona fide emergency or another good
cause exists and the lender obtains the written consent of the owner, the
lender may provide the disclosure statement at the closing. The lender shall
retain a signed and dated copy of the disclosure statement with the closing
documents.
(c) The failure of a lender to comply with this section does not
invalidate a lien under this chapter, a contract lien, or a deed of trust.

Added by Acts 1997, 75th Leg., ch. 526, Sec. 23, eff. Sept. 1, 1997.

Sec. 53.258. DISBURSEMENTS OF FUNDS. (a) At the time the original

contractor requests payment from the owner or the owner's lender for the
construction of improvements under a residential construction contract, the
original contractor shall provide to the owner a disbursement statement. The
statement may include any information agreed to by the owner and the original
contractor and must include at least the name and address of each person who
subcontracted directly with the original contractor and who the original
contractor intends to pay from the requested funds. The original contractor
shall provide the disbursement statement:
(1) in the manner agreed to in writing by the owner and original
contractor; or
 (2) if no agreement exists, by depositing the statement in the
United States mail, first class, postage paid, and properly addressed to the
owner or by hand delivering the statement to the owner before the original
contractor receives the requested funds.
(b) If the owner finances the construction of improvements through a
third party that advances loan proceeds directly to the original contractor,
the lender shall:
(1) obtain from the original contractor the signed disbursement
statement required by Subsection (a) that covers the funds for which the
original contractor is requesting payment; and
(2) provide to the owner a statement of funds disbursed by the
lender since the last statement was provided to the owner.
(c) The lender shall provide to the owner the lender's disbursement
statement and the disbursement statement the lender obtained from the
contractor before the lender disburses the funds to the original contractor.
The disbursement statements may be provided in any manner agreed to by the
lender and the owner.
(d) The lender is not responsible for the accuracy of the information
contained in the disbursement statement obtained from the original contractor.
(e) The failure of a lender or an original contractor to comply with this
section does not invalidate a lien under this chapter, a contract lien, or a
deed of trust.
(f) A person commits an offense if the person intentionally, knowingly,
or recklessly provides false or misleading information in a disbursement
statement required under this section. An offense under this section is a
misdemeanor. A person adjudged guilty of an offense under this section shall
be punished by a fine not to exceed $4,000 or confinement in jail for a term
not to exceed one year or both a fine and confinement. A person may not
receive community supervision for the offense.

Added by Acts 1997, 75th Leg., ch. 526, Sec. 23, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 889, Sec. 10, eff. Sept. 1, 1999.

Sec. 53.259. FINAL BILLS-PAID AFFIDAVIT REQUIRED. (a) As a condition of

final payment under a residential construction contract, the original
contractor shall, at the time the final payment is tendered, execute and
deliver to the owner, or the owner's agent, an affidavit stating that the
original contractor has paid each person in full for all labor and materials
used in the construction of improvements on the real property. If the original
contractor has not paid each person in full, the original contractor shall
state in the affidavit the amount owed and the name and, if known, the address
and telephone number of each person to whom a payment is owed.
 (b) The seller of any real property on which a structure of not more than
four units is constructed and that is intended as the principal place of
residence for the purchaser shall, at the closing of the purchase of the real
property, execute and deliver to the purchaser, or the purchaser's agent, an
affidavit stating that the seller has paid each person in full for all labor
and materials used in the construction of improvements on the real property and
that the seller is not indebted to any person by reason of any construction.
In the event that the seller has not paid each person in full, the seller shall
state in the affidavit the amount owed and the name and, if known, the address
and telephone number of each person to whom a payment is owed.
(c) A person commits an offense if the person intentionally, knowingly,
or recklessly makes a false or misleading statement in an affidavit under this
section. An offense under this section is a misdemeanor. A person adjudged
guilty of an offense under this section shall be punished by a fine not to
exceed $4,000 or confinement in jail for a term not to exceed one year or both
a fine and confinement. A person may not receive community supervision for the
offense.
(d) A person signing an affidavit under this section is personally liable
for any loss or damage resulting from any false or incorrect information in the
affidavit.

Added by Acts 1997, 75th Leg., ch. 526, Sec. 23, eff. Sept. 1, 1997.

Sec. 53.260. CONVEYANCE TO CONTRACTOR NOT REQUIRED. An original

contractor may not require an owner of real property to convey the real
property to the original contractor or an entity controlled by the original
contractor as a condition to the performance of the residential construction
contract for improvements to the real property.

Added by Acts 1997, 75th Leg., ch. 526, Sec. 23, eff. Sept. 1, 1997. Amended
by Acts 1999, 76th Leg., ch. 889, Sec. 11, eff. Sept. 1, 1999.

SUBCHAPTER L. WAIVER AND RELEASE OF LIEN OR PAYMENT BOND CLAIM

Sec. 53.281. WAIVER AND RELEASE OF LIEN OR PAYMENT BOND CLAIM. (a) Any
waiver and release of a lien or payment bond claim under this chapter is
unenforceable unless a waiver and release is executed and delivered in
accordance with this subchapter.
(b) A waiver and release is effective to release the owner, the owner's
property, the contractor, and the surety on a payment bond from claims and
liens only if:
 (1) the waiver and release substantially complies with one of the
forms prescribed by Section 53.284;
(2) the waiver and release is signed by the claimant or the
claimant's authorized agent and notarized; and
(3) in the case of a conditional release, evidence of payment to the
claimant exists.

Added by Acts 2011, 82nd Leg., R.S., Ch. 271 (H.B. 1456), Sec. 3, eff. January
1, 2012.

Sec. 53.282. CONDITIONS FOR WAIVER, RELEASE, OR IMPAIRMENT OF LIEN OR

PAYMENT BOND CLAIM. (a) A statement purporting to waive, release, or
otherwise adversely affect a lien or payment bond claim is not enforceable and
does not create an estoppel or impairment of a lien or payment bond claim
unless:
(1) the statement is in writing and substantially complies with a
form prescribed by Section 53.284;
(2) the claimant has actually received payment in good and
sufficient funds in full for the lien or payment bond claim; or
(3) the statement is:
(A) in a written original contract or subcontract for the
construction, remodel, or repair of a single-family house, townhouse, or duplex
or for land development related to a single-family house, townhouse, or duplex;
and
(B) made before labor or materials are provided under the
original contract or subcontract.
(b) The filing of a lien rendered unenforceable by a lien waiver under
Subsection (a)(3) does not violate Section 12.002, Civil Practice and Remedies
Code, unless:
(1) an owner or original contractor sends a written explanation of
the basis for nonpayment, evidence of the contractual waiver of lien rights,
and a notice of request for release of the lien to the claimant at the
claimant's address stated in the lien affidavit; and
(2) the lien claimant does not release the filed lien affidavit on
or before the 14th day after the date the owner or the original contractor
sends the items required by Subdivision (1).
(c) Subsection (a)(3) does not apply to a person who supplies only
material, and not labor, for the construction, remodel, or repair of a single-
family house, townhouse, or duplex or for land development related to a single-
family house, townhouse, or duplex.
Added by Acts 2011, 82nd Leg., R.S., Ch. 271 (H.B. 1456), Sec. 3, eff. January
1, 2012.

Sec. 53.283. UNCONDITIONAL WAIVER AND RELEASE: PAYMENT REQUIRED. A

person may not require a claimant or potential claimant to execute an
unconditional waiver and release for a progress payment or final payment amount
unless the claimant or potential claimant received payment in that amount in
good and sufficient funds.

Added by Acts 2011, 82nd Leg., R.S., Ch. 271 (H.B. 1456), Sec. 3, eff. January
1, 2012.

Sec. 53.284. FORMS FOR WAIVER AND RELEASE OF LIEN OR PAYMENT BOND CLAIM.
(a) A waiver and release given by a claimant or potential claimant is
unenforceable unless it substantially complies with the applicable form
described by Subsections (b)-(e).
(b) If a claimant or potential claimant is required to execute a waiver
and release in exchange for or to induce the payment of a progress payment and
is not paid in exchange for the waiver and release or if a single payee check
or joint payee check is given in exchange for the waiver and release, the
waiver and release must read:
"CONDITIONAL WAIVER AND RELEASE ON PROGRESS PAYMENT

"Project ___________________
"Job No. ___________________
"On receipt by the signer of this document of a check from
________________ (maker of check) in the sum of $__________ payable to
_____________________ (payee or payees of check) and when the check has been
properly endorsed and has been paid by the bank on which it is drawn, this
document becomes effective to release any mechanic's lien right, any right
arising from a payment bond that complies with a state or federal statute, any
common law payment bond right, any claim for payment, and any rights under any
similar ordinance, rule, or statute related to claim or payment rights for
persons in the signer's position that the signer has on the property of
________________ (owner) located at ______________________ (location) to the
following extent: ______________________ (job description).
"This release covers a progress payment for all labor, services,
equipment, or materials furnished to the property or to __________________
(person with whom signer contracted) as indicated in the attached statement(s)
or progress payment request(s), except for unpaid retention, pending
modifications and changes, or other items furnished.
 "Before any recipient of this document relies on this document, the
recipient should verify evidence of payment to the signer.
"The signer warrants that the signer has already paid or will use the
funds received from this progress payment to promptly pay in full all of the
signer's laborers, subcontractors, materialmen, and suppliers for all work,
materials, equipment, or services provided for or to the above referenced
project in regard to the attached statement(s) or progress payment request(s).
"Date ____________________________
"_________________________________ (Company name)
"By ______________________________ (Signature)
"_________________________________ (Title)"
(c) If a claimant or potential claimant is required to execute an
unconditional waiver and release to prove the receipt of good and sufficient
funds for a progress payment and the claimant or potential claimant asserts in
the waiver and release that the claimant or potential claimant has been paid
the progress payment, the waiver and release must:
(1) contain a notice at the top of the document, printed in bold
type at least as large as the largest type used in the document, but not
smaller than 10-point type, that reads:
"NOTICE:

"This document waives rights unconditionally and states that you have been
paid for giving up those rights. It is prohibited for a person to require you
to sign this document if you have not been paid the payment amount set forth
below. If you have not been paid, use a conditional release form."; and
(2) below the notice, read:
"UNCONDITIONAL WAIVER AND RELEASE ON PROGRESS PAYMENT

"Project ___________________
"Job No. ___________________
"The signer of this document has been paid and has received a progress
payment in the sum of $___________ for all labor, services, equipment, or
materials furnished to the property or to _____________________ (person with
whom signer contracted) on the property of _______________________ (owner)
located at ______________________ (location) to the following extent:
______________________ (job description). The signer therefore waives and
releases any mechanic's lien right, any right arising from a payment bond that
complies with a state or federal statute, any common law payment bond right,
any claim for payment, and any rights under any similar ordinance, rule, or
statute related to claim or payment rights for persons in the signer's position
that the signer has on the above referenced project to the following extent:
 "This release covers a progress payment for all labor, services,
equipment, or materials furnished to the property or to __________________
(person with whom signer contracted) as indicated in the attached statement(s)
or progress payment request(s), except for unpaid retention, pending
modifications and changes, or other items furnished.
"The signer warrants that the signer has already paid or will use the
funds received from this progress payment to promptly pay in full all of the
signer's laborers, subcontractors, materialmen, and suppliers for all work,
materials, equipment, or services provided for or to the above referenced
project in regard to the attached statement(s) or progress payment request(s).
"Date ____________________________
"_________________________________ (Company name)
"By ______________________________ (Signature)
"_________________________________ (Title)"
(d) If a claimant or potential claimant is required to execute a waiver
and release in exchange for or to induce the payment of a final payment and is
not paid in good and sufficient funds in exchange for the waiver and release or
if a single payee check or joint payee check is given in exchange for the
waiver and release, the waiver and release must read:
"CONDITIONAL WAIVER AND RELEASE ON FINAL PAYMENT

"Project ___________________
"Job No. ___________________
"On receipt by the signer of this document of a check from
________________ (maker of check) in the sum of $____________ payable to
_____________________ (payee or payees of check) and when the check has been
properly endorsed and has been paid by the bank on which it is drawn, this
document becomes effective to release any mechanic's lien right, any right
arising from a payment bond that complies with a state or federal statute, any
common law payment bond right, any claim for payment, and any rights under any
similar ordinance, rule, or statute related to claim or payment rights for
persons in the signer's position that the signer has on the property of
_____________________ (owner) located at ______________________ (location) to
the following extent: ______________________ (job description).
"This release covers the final payment to the signer for all labor,
services, equipment, or materials furnished to the property or to
__________________ (person with whom signer contracted).
"Before any recipient of this document relies on this document, the
recipient should verify evidence of payment to the signer.
"The signer warrants that the signer has already paid or will use the
funds received from this final payment to promptly pay in full all of the
signer's laborers, subcontractors, materialmen, and suppliers for all work,
materials, equipment, or services provided for or to the above referenced
project up to the date of this waiver and release.
"Date ____________________________
"_________________________________ (Company name)
"By ______________________________ (Signature)
"_________________________________ (Title)"
(e) If a claimant or potential claimant is required to execute an
unconditional waiver and release to prove the receipt of good and sufficient
funds for a final payment and the claimant or potential claimant asserts in the
waiver and release that the claimant or potential claimant has been paid the
final payment, the waiver and release must:
(1) contain a notice at the top of the document, printed in bold
type at least as large as the largest type used in the document, but not
smaller than 10-point type, that reads:
"NOTICE:

"This document waives rights unconditionally and states that you have been
paid for giving up those rights. It is prohibited for a person to require you
to sign this document if you have not been paid the payment amount set forth
below. If you have not been paid, use a conditional release form."; and
(2) below the notice, read:
"UNCONDITIONAL WAIVER AND RELEASE ON FINAL PAYMENT

"Project ___________________
"Job No. ___________________
"The signer of this document has been paid in full for all labor,
services, equipment, or materials furnished to the property or to
___________________ (person with whom signer contracted) on the property of
______________________ (owner) located at ______________________ (location) to
the following extent: ______________________ (job description). The signer
therefore waives and releases any mechanic's lien right, any right arising from
a payment bond that complies with a state or federal statute, any common law
payment bond right, any claim for payment, and any rights under any similar
ordinance, rule, or statute related to claim or payment rights for persons in
the signer's position.
"The signer warrants that the signer has already paid or will use the
funds received from this final payment to promptly pay in full all of the
signer's laborers, subcontractors, materialmen, and suppliers for all work,
materials, equipment, or services provided for or to the above referenced
project up to the date of this waiver and release.
"Date ____________________________
"_________________________________ (Company name)
 "By ______________________________ (Signature)
"_________________________________ (Title)"

Added by Acts 2011, 82nd Leg., R.S., Ch. 271 (H.B. 1456), Sec. 3, eff. January
1, 2012.

Sec. 53.286. PUBLIC POLICY. Notwithstanding any other law and except as
provided by Section 53.282, any contract, agreement, or understanding
purporting to waive the right to file or enforce any lien or claim created
under this chapter is void as against public policy.

Added by Acts 2011, 82nd Leg., R.S., Ch. 271 (H.B. 1456), Sec. 3, eff. January
1, 2012.

Sec. 53.287. CERTAIN AGREEMENTS EXEMPT. This subchapter does not apply
to a written agreement to subordinate, release, waive, or satisfy all or part
of a lien or bond claim in:
(1) an accord and satisfaction of an identified dispute;
(2) an agreement concerning an action pending in any court or
arbitration proceeding; or
(3) an agreement that is executed after an affidavit claiming the
lien has been filed or the bond claim has been made.

Added by Acts 2011, 82nd Leg., R.S., Ch. 271 (H.B. 1456), Sec. 3, eff. January
1, 2012.

SUBCHAPTER C. PROCEDURE FOR PERFECTING LIEN

Sec. 53.051. NECESSARY PROCEDURES. To perfect the lien, a person must

comply with this subchapter.

Acts 1983, 68th Leg., p. 3538, ch. 576, Sec. 1, eff. Jan. 1, 1984.

Sec. 53.052. FILING OF AFFIDAVIT. (a) Except as provided by Subsection

(b), the person claiming the lien must file an affidavit with the county clerk
of the county in which the property is located or into which the railroad
extends not later than the 15th day of the fourth calendar month after the day
on which the indebtedness accrues.
(b) A person claiming a lien arising from a residential construction
project must file an affidavit with the county clerk of the county in which the
property is located not later than the 15th day of the third calendar month
after the day on which the indebtedness accrues.
(c) The county clerk shall record the affidavit in records kept for that
purpose and shall index and cross-index the affidavit in the names of the
claimant, the original contractor, and the owner. Failure of the county clerk
to properly record or index a filed affidavit does not invalidate the lien.

Acts 1983, 68th Leg., p. 3538, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 4, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 5, eff. Sept. 1, 1997.

Sec. 53.053. ACCRUAL OF INDEBTEDNESS. (a) For purposes of Section

53.052, indebtedness accrues on a contract under which a plan or plat is
prepared, labor was performed, materials furnished, or specially fabricated
materials are to be furnished in accordance with this section.
(b) Indebtedness to an original contractor accrues:
(1) on the last day of the month in which a written declaration by
the original contractor or the owner is received by the other party to the
original contract stating that the original contract has been terminated; or
(2) on the last day of the month in which the original contract has
been completed, finally settled, or abandoned.
(c) Indebtedness to a subcontractor, or to any person not covered by
Subsection (b) or (d), who has furnished labor or material to an original
contractor or to another subcontractor accrues on the last day of the last
month in which the labor was performed or the material furnished.
(d) Indebtedness for specially fabricated material accrues:
(1) on the last day of the last month in which materials were
delivered;
(2) on the last day of the last month in which delivery of the last
of the material would normally have been required at the job site; or
(3) on the last day of the month of any material breach or
termination of the original contract by the owner or contractor or of the
subcontract under which the specially fabricated material was furnished.
(e) A claim for retainage accrues on the earliest of the last day of the
month in which all work called for by the contract between the owner and the
original contractor has been completed, finally settled, terminated, or
abandoned.

Acts 1983, 68th Leg., p. 3539, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 5, eff. Sept. 1, 1989; Acts 1995, 74th
Leg., ch. 851, Sec. 3, eff. Sept. 1, 1995.
Amended by:
 Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 1, eff. September 1,
2011.

Sec. 53.054. CONTENTS OF AFFIDAVIT. (a) The affidavit must be signed by

the person claiming the lien or by another person on the claimant's behalf and
must contain substantially:
(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.
(b) The claimant may attach to the affidavit a copy of any applicable
written agreement or contract and a copy of each notice sent to the owner.
(c) The affidavit is not required to set forth individual items of work
done or material furnished or specially fabricated. The affidavit may use any
abbreviations or symbols customary in the trade.

Acts 1983, 68th Leg., p. 3540, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 6, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 6, eff. Sept. 1, 1997.

Sec. 53.055. NOTICE OF FILED AFFIDAVIT. (a) A person who files an

affidavit must send a copy of the affidavit by registered or certified mail to
the owner or reputed owner at the owner's last known business or residence
address not later than the fifth day after the date the affidavit is filed with
the county clerk.
(b) If the person is not an original contractor, the person must also
send a copy of the affidavit to the original contractor at the original
contractor's last known business or residence address within the same period.
Acts 1983, 68th Leg., p. 3540, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 7, eff. Sept. 1, 1989; Acts 1993, 73rd
Leg., ch. 48, Sec. 7, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 526, Sec.
7, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 889, Sec. 2, eff. Sept. 1,
1999.

Sec. 53.056. DERIVATIVE CLAIMANT: NOTICE TO OWNER OR ORIGINAL

CONTRACTOR. (a) Except as provided by Subchapter K, a claimant other than an
original contractor must give the notice prescribed by this section for the
lien to be valid.
(b) If the lien claim arises from a debt incurred by a subcontractor, the
claimant must give to the original contractor written notice of the unpaid
balance. The claimant must give the notice not later than the 15th day of the
second month following each month in which all or part of the claimant's labor
was performed or material delivered. The claimant must give the same notice to
the owner or reputed owner and the original contractor not later than the 15th
day of the third month following each month in which all or part of the
claimant's labor was performed or material or specially fabricated material was
delivered.
(c) If the lien claim arises from a debt incurred by the original
contractor, the claimant must give notice to the owner or reputed owner, with a
copy to the original contractor, in accordance with Subsection (b).
(d) To authorize the owner to withhold funds under Subchapter D, the
notice to the owner must state that 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 payments from the contractor for payment of
the claim; or
(2) the claim is otherwise paid or settled.
(e) The notice must be sent by registered or certified mail and must be
addressed to the owner or reputed owner or the original contractor, as
applicable, at his last known business or residence address.
(f) A copy of the statement or billing in the usual and customary form is
sufficient as notice under this section.

Acts 1983, 68th Leg., p. 3540, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 8, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 8, eff. Sept. 1, 1997.

Sec. 53.057. DERIVATIVE CLAIMANT: NOTICE FOR CONTRACTUAL RETAINAGE

CLAIM. (a) A claimant may give notice under this section instead of or in
addition to notice under Section 53.056 or 53.252 if the claimant is to labor,
furnish labor or materials, or specially fabricate materials, or has labored,
furnished labor or materials, or specially fabricated materials, under an
agreement with an original contractor or a subcontractor providing for
retainage.
(b) The claimant must give the owner or reputed owner notice of
contractual retainage not later than the earlier of:
(1) the 30th day after the date the claimant's agreement providing
for retainage is completed, terminated, or abandoned; or
(2) the 30th day after the date the original contract is terminated
or abandoned.
(b-1) If an agreement for contractual retainage is with a subcontractor,
the claimant must also give the notice of contractual retainage to the original
contractor within the period prescribed by Subsection (b).
(c) The notice must generally state the existence of a requirement for
retainage and contain:
(1) the name and address of the claimant; and
(2) if the agreement is with a subcontractor, the name and address
of the subcontractor.
(d) The notice must be sent to the last known business or residence
address of the owner or reputed owner or the original contractor, as
applicable.
(e) If a claimant gives notice under this section and Section 53.055 or,
if the claim relates to a residential construction project, under this section
and Section 53.252, the claimant is not required to give any other notice as to
the retainage.
(f) A claimant has a lien on, and the owner is personally liable to the
claimant for, the retained funds under Subchapter E if the claimant:
(1) gives notice in accordance with this section and:
(A) complies with Subchapter E; or
(B) files an affidavit claiming a lien not later than the
earliest of:
(i) the date required for filing an affidavit under
Section 53.052;
(ii) the 40th day after the date stated in an affidavit of
completion as the date of completion of the work under the original contract,
if the owner sent the claimant notice of an affidavit of completion in the time
and manner required;
(iii) the 40th day after the date of termination or
abandonment of the original contract, if the owner sent the claimant a notice
of such termination or abandonment in the time and manner required; or
 (iv) the 30th day after the date the owner sent to the
claimant to the claimant's address provided in the notice for contractual
retainage, as required under Subsection (c), a written notice of demand for the
claimant to file the affidavit claiming a lien; and
(2) gives the notice of the filed affidavit as required by Section
53.055.
(g) The written demand under Subsection (f)(1)(B)(iv):
(1) must contain the owner's name and address and a description,
legally sufficient for identification, of the real property on which the
improvement is located;
(2) must state that the claimant must file the lien affidavit not
later than the 30th day after the date the demand is sent; and
(3) is effective only for the amount of contractual retainage earned
by the claimant as of the day the demand was sent.

Acts 1983, 68th Leg., p. 3541, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by
Acts 1989, 71st Leg., ch. 1138, Sec. 9, eff. Sept. 1, 1989; Acts 1997, 75th
Leg., ch. 526, Sec. 9, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 889, Sec.
3, eff. Sept. 1, 1999.