Please check the following FAQ's below to find the answers to common questions
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Preliminary Notice FAQ
A Texas monthly notice is a letter sent by a contractor or supplier to the property owner for every month of work on a project. A Texas monthly notice is required to be sent in order to secure the right to lien.
If you are not a general contractor, yes, and you have to send a monthly notice for every month that you work on a project.
A general contractor, meanwhile, is usually not required to send this notice. With residential projects, however, a general contractor is required to give the owner of the property a disclosure contract before contract signing. Unless waived by the owner, it is also required of the general contractor to submit a list of all subcontractors and suppliers involved in the project.
To be able to file a mechanics lien on a homestead, a general contractor should execute a written contract laying out the terms before labor or materials are provided. It should be signed by both spouses if the owner is married and then filed with the county clerk.
All Texas notices should be sent by registered or certified mail.
To protect lien rights regarding a homestead, a contract for improvement must be filed with the county clerk in the county where the homestead is situated before labor or materials are supplied.
The notices required and when to send them depend on the tier of a participant and the type of project.
- Residential projects
Subcontractors, laborers, and suppliers must send a 2nd Month Notice to the property owner and prime contractor by the 15th of the 2nd month following each month in which work was done but not paid. This means that for every month that work was done but unpaid, a notice must be sent.
A Retainage Notice is required of first-tier subcontractors and other parties. It must be mailed within 30 days after the claimant’s agreement providing for retainage is completed, terminated or abandoned, or within 30 days after the contract is terminated or abandoned, whichever is later.
A Specially Fabricated Materials Notice is also required of first-tier subcontractors and other parties. It should be given no later than the 15th day of the second month following the month when the claimant received and accepted the order of materials.
- Non-residential projects
First-tier subcontractors must send a 2nd Month Notice to the owner and prime contractor by the 15th of the 2nd month following each month in which work was done but not paid. As with residential projects, a notice must be sent for each month that work was done but unpaid.
Lower-tier parties must send a 2nd Month Notice to the prime contractor and a 3rd Month Notice to the property owner and prime contractor by the 15th of the 2nd month and the 3rd month following each month in which work was done but not paid.
A Texas preliminary notice should be sent to the property owner or the general contractor, or both.
Failure to send the monthy notices can invalidate a Texas mechanics lien.
Intent To File FAQ
A Texas notice of intent to lien is sent before the filing of a mechanics lien becomes necessary. Although only a number of states require that this notice be sent, many construction participants send a notice of intent to lien as an uncostly way to have payments for invoices settled.
The preliminary notices, in a way, act like a notice of intent to lien in Texas.
Refer to the timing of sending Texas preliminary notices since they act like a notice of intent to lien.
Texas does not require a notice of intent to lien.
Since Texas does not require a notice of intent to lien notice, not sending one will not invalidate your lien. But make sure to send your preliminary notices in order to preserve your lien rights.
Mechanics Lien FAQ
A Texas mechanics lien is an effective tool that helps make sure you will be paid for the construction materials and/or labor you supplied. It is a legal claim that guarantees payment for contractors.
This means that if you file a valid mechanics lien on a project you worked on in Texas and weren’t paid for your work, you have the right to enforce the lien through a lawsuit. This enforcement action can either prompt the client to settle or force the sale of the property. The proceeds of the sale will be used to settle your unpaid bill.
With a Texas mechanics lien, you have an interest in the improved property. When a mechanics lien is filed on the property you worked on, the property becomes collateral for uncollected payments.
The Texas property code specifies 3 types¹ of parties that can file a mechanics lien:
- Parties that furnish labor or materials
- Parties that specially fabricate materials
- Design professionals
The first category includes general contractors, subcontractors and material suppliers.
For those who fabricate materials, it is not a requirement that materials be delivered to or used in a project in filing a mechanics lien. The only requirement is for the required notices to be sent.
Parties who have a direct contractual relationship with a property owner are protected by a Constitutional Lien. Parties under this category are not required to send any notices to file a lien.
In filing a Texas mechanics lien, submit a lien affidavit to the county clerk where the property is located.²
Step 1: Ready the lien form and fill it out with all of the required information, which you can find below. A notary must acknowledge the signature of a party. Remember that notarizing the document is required in filing it.
Step 2: File the original notarized copy of the form with the clerk’s office in the county where the property is situated.
- The notarized form may be sent to the clerk’s office via mail or FedEx, or you can deliver it in person for recording. In some Texas counties, you may e-record the document.
- If you are e-recording the lien form, the fees for filing and processing will be assessed before recording. On the recording platform, just select “Lien” and upload your lien and other required attachments.
- If you choose to send the lien via mail or FedEx or walking in with it, include the proper fees in your filing.
Call the county recorder to know the amount you have to pay. If you don’t pay the right amount of fees, your lien can be rejected.
The fees are usually determined by the amount set for the first page plus the sum of the smaller amounts set for the succeeding pages. This means that the more pages you include in your filing, the higher the fee will be.
In some counties in Texas, you can minimize up to four documents and print them on just one page. This way, you can reduce your filing expenses.
Step 3: Ask for a stamped copy of your recorded lien.
- Include a self-addressed stamped envelope in your filing, along with the filing fee, in order to receive a copy of your recorded lien for you own records.
Step 4: As required by Texas law, serve your Claim of Lien on the owner of the property either before filing the lien or not later than the 5th business day after the recording of the lien. Your lien can get invalidated if you fail to do so.
- A Texas mechanics lien must be filed by the 15th day of the 4th month after the month when the claimant last provided labor or materials. If the 15th day of the month falls on a Sunday, it must be filed sooner.
- If the project is residential,³ a mechanics lien should be filed by the 15th day of the 3rd month after the month when labor or materials were last provided.
- To also protect a claimant’s claim against retainage, the mechanics lien must be filed within 30 days after project completion. However, this can be changed to any of the following:
a. The 40th day after the date of work completion as stated in a properly and timely sent affidavit of completion
b. The 40th day after the termination of the original contract as stated in a properly and timely sent notice of termination
c. The 30th day after sent a written notice of demand for the claimant to an affidavit claiming a lien; the notice must be sent by the owner to the claimant at the address stated in a notice for contractual retainage
A mechanics lien in Texas is effective during the period within which action is required to enforce it.⁴
For non-residential projects, a claimant has 2 years to enforce the lien from the last available day to file it or 1 year from work completion, whichever is later.
For residential projects, a claimant has 1 year to enforce the lien from the last available day to file it or 1 year from work completion, whichever is later.
The following pieces of information must appear on a Texas mechanics lien form:
- A sworn statement specifying the claim, where it is clearly stated that the work described therein by the claimant was indeed performed and that the amount stated has not been paid
- The work or materials furnished
- The name, address, and contact information of the property owner
- The name, address and contact information of the person who employed the claimant
- A description of the property “legally sufficient” to identify it
- The date dates on which notices were sent
- The name, address, and contact information of the claimant
No. Texas has no license requirements when it comes to filing a mechanics lien.
Texas has legislatively designed lien waiver forms which parties are required to use.⁵ Noncompliance will result in an invalid mechanics lien.
Furthermore, Texas prohibits contractors and suppliers from waiving their right to lien in contract.
In Texas, when payment has been settled, the claimant must file a lien release within 10 days of satisfaction upon request of the paying party. The lien release should be filed in the county recorder office where the mechanics lien was filed.
Pay if paid clauses are enforceable in Texas provided there exists an express and unequivocal agreement to this effect. Pay when paid clauses are enforceable in terms of the time and manner of payment but not the payment itself.