Sending a Texas Second Month Notice in Non-Residential Projects: Requirements and Best Practices | Handle

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Sending a Texas Second Month Notice in Non-Residential Projects: Requirements and Best Practices

Sending a Texas Second Month Notice in Non-Residential Projects: Requirements and Best Practices

January 6, 2021

Texas’s rules on preliminary notices for construction projects can be confusing. Sometimes you will need to serve multiple preliminary notices for a given month, while in some cases serving one notice should be enough. It is very important for you to know which Texas preliminary notice requirements apply in your situation.

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Send a Texas Second Month Notice in Minutes

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This guide discusses the Texas Second Month Notice for non-residential projects. It answers basic questions about the deadlines and requirements associated with the document and details some best practices that you may want to keep in mind.

What is a Second Month Notice in Texas?

The Second Month Notice is a preliminary notice that is due in the second month following each month in which there is unpaid work. This preliminary notice is a recurring or monthly notice, which means that you may need to serve this notice multiple times during the course of a project.

Who must serve a Second Month Notice for non-residential projects in Texas?

The Second Month Notice for non-residential projects must be served by parties who have no direct contract with the general contractor. This means that sub-tier contractors for non-residential projects must serve this preliminary notice. Sub-tier contractors include sub-subcontractors, material suppliers to subcontractors, and all other parties in the lower end of the contracting chain.

Note on the 2nd Month Notice for non-residential projects in Texas

Note that the same construction participants must also serve a Third Month Notice for non-residential projects. If you are required to serve a Second Month Notice for non-residential projects, you must also serve a Third Month Notice.

When do you serve a Texas Second Month Notice for non-residential projects?

The Second Month Notice for non-residential projects must be served no later than the 15th day of the second month after each month in which there is unpaid work. Note that payment does not have to be due by the time you serve this notice. As with all preliminary notices in Texas, you should serve them as long as you performed work in a given month and you have not received your payment yet.

Also note that if the 15th day of the second month falls on a holiday or a weekend, you should serve the Second Month Notice at an earlier date.

Furthermore, since you are also required to serve a Third Month Notice for non-residential projects, you are allowed to serve both the Second Month Notice and the Third Month Notice at the same time. Note, however, that one document will not suffice. Even if you serve both notices at the same time, you must still mail two separate documents.

When do you serve a Texas 2nd Month Notice for non-residential projects

What happens if you fail to serve a Texas Second Month Notice for non-residential projects?

Serving a Second Month Notice for non-residential projects is critical to protecting your lien rights. If required, you must serve this preliminary notice on time; otherwise, you lose your lien rights. This means that you will not be allowed to record or enforce a valid Texas mechanics lien as a way to recover your payment from your client.

How to serve a Texas Second Month Notice for non-residential projects

How to serve a Texas 2nd Month Notice for residential projects

1. Prepare the Texas Second Month Notice form

Texas laws do not prescribe a specific preliminary notice format for your Second Month Notice. However, you may include the following bits of information in the form:

  • Your name and address
  • The name and address of the property owner
  • The name and address of the general contractor
  • The name and address of the party who hired you (if different from the GC)
  • A description of the property location
  • A description of the services that you performed
  • The amount that is currently unpaid; include the total as well as a breakdown per month

The details above provide enough context as to the services that you have performed, as well as the amount that is still unpaid. Remember that the payment does not have be due in order for you serve a preliminary notice in Texas. If there is unpaid work in a given month, you must prepare and serve a Second Month Notice for that month.

2. Serve the Texas Second Month Notice

How must you serve the Texas Second Month Notice for non-residential projects?

The Second Month Notice must be served through registered or certified mail. If you serve your preliminary notice via USPS, the current rate for certified mailing is at $3.50.

On whom must you serve the Texas Second Month Notice for non-residential projects?

The Second Month Notice for non-residential projects must be served on the general contractor. You do not need to serve it on the property owner since you do not have a direct contract with both the owner and the GC. The idea is to give the GC a chance to settle the payment dispute before the issue gets brought up to the property owner.

Note, however, that the Third Month Notice for non-residential projects must be served on both the owner and the general contractor. If you are serving your Second and Third Month Notices at the same time, the general contractor must expect two copies of the same notice.

When must you serve the Texas Second Month Notice?

The Texas Second Month Notice of non-residential projects must be served on the 15th day of the second month following every month in which there is unpaid work. If the deadline falls on a holiday or a weekend, the Second Month Notice must be served earlier.

You must keep in mind that this Second Month Notice must be served recurringly as long as there is a new month in which you have unpaid work. Even if there is no payment dispute or if the payment is not yet due, the Second Month Notice must be served as long as you have unpaid invoices. This is to ensure that you preserve your lien rights in case payment issues come up at a later date.

Send a 2nd month notice now

Also note that a Second Month Notice is considered served on the day that it is mailed. Keep this in mind when planning when to serve your Texas preliminary notices.

Best practices for serving a Texas Second Month Notice for non-residential projects

1. Remember to serve a Second Month Notice for every month in which there is unpaid work

As long as you have unpaid invoices for a given month, you should serve a Second Month Notice for that month. This is regardless of whether there is an ongoing payment issue or not, or if the payment is not yet due until months later. It is best practice to serve a Second Month Notice for every month to ensure that your lien rights are properly preserved.

2. Remember that the Second Month and Third Month Notices are two separate documents

Parties working on non-residential projects who have no direct contract with the general contractor are required to serve both the Second Month Notice and the Third Month Notice. Since both documents contain practically the same details, you might be tempted to serve just one document on the general contractor.

Do not ever do this! These two preliminary notices may be served at the same time, but they must be served as two separate documents to fulfill your Texas preliminary notice requirements.

3. Remember to file a mechanics lien if payment issues arise

You should record a mechanics lien in Texas if your client does not release your payment. Filing a mechanics lien will afford you stronger leverage during payment negotiations and can limit a property’s market value. You should be able to exercise your lien rights so long as you adhere to the preliminary notice requirements applicable to you.

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