A "Brief" Guide to Texas Lien Law
INTRODUCTION TO TEXAS LIEN LAW
Texas lien law with respect to private, non-residential projects is governed by Chapter 53 of the Texas Property Code. Lawyers and contractors alike agree that Texas lien law is among the most complicated in the nation. In fact, it is so complicated that many contractors lose their lien rights and do not even know it. However, it is not something that is impossible to deal with. While nothing takes the place of expert guidance, this short overview attempts to help you understand the most basic and important aspects of Texas Lien law and offers some form guides for the various notices and liens. To aid in understanding this process, we have divided the process into four primary steps:
(1) Gathering Information, (2) Early Notices, (3) Notices of Unpaid Account, and (4) Filing the Lien.
Before getting into the nuts and bolts of the process, there are few things to note:
First, and most importantly, the deadlines noted herein are mandatory and strictly enforced by courts when deciding whether to enforce a lien. If you miss a deadline, your lien will not be valid and your right to payment will be unnecessarily limited.
Second, the Texas Property Code uses some uncommon terminology. Where possible, we have avoided the use of these terms to simplify the material. However, one recurring term you will see is “original contractor.” In most cases, this term is synonymous with a general contractor. All it means is a contractor with a direct contract with the owner. If you have one, you are an original contractor. If you do not, you are a subcontractor under the Texas Property Code. This distinction becomes important when determining which people to send the forms herein.
As with deadlines, if you do not send each required form to the appropriate party, your lien will not be valid. Although these people are identified in the explanatory notes to each form, one simple rule can alleviate any uncertainty. When in doubt, send each form to everyone above you in the contracting chain.
Last, all of the forms herein should be sent via certified mail, return receipt requested. The purpose of this is two-fold. First, in most instances it is required by the Texas Property Code. Second, in all cases it the most fail-safe mechanism for later proving that the intended recipient received what was sent. Each form also notes delivery via first class mail. Although not required, we recommend doing so to protect against the recipient’s refusing to accept a certified mailing.