Changes to Texas Construction Lien Law

House Bill 2237 made numerous changes to Texas mechanic’s and materialman’s lien laws in Chapter 53 of the Texas Property Code. These revisions apply to prime contracts entered on or after January 1, 2022.

Below are some of the more substantive changes made by HB 2237.

Updated Form and Process for Lien Notices

Chapter 53 of the Texas Property Code now provides a standard form that claimants must use to provide notice of intent to lien. The standard form must include the “type of labor or materials provided” by the claimant. Gone are the days of claimants double- and triple-checking a list of requirements related to filing a lien notice. In addition, notices may be sent by certified return receipt requested, registered mail, or private delivery like FedEx or UPS.

Further, HB 2237 does away with the distinction of lower tier subcontractors regarding time to send such notices. Now all subcontractors must send notice of a claim to the owner and general contractor by the 15th day of the third month after each month for which labor or materials were provided. This change does away with the second-month notice that was required of lower-tier subcontractors. Similarly, providers of specially fabricated materials no longer have to notify owners of a claim by the 15th day of the second month after supplying the materials.

Under the revised Chapter 53 of the Texas Property Code, a claimant must notice a claim for unpaid retainage by the earlier of the (i) 30th day after the completion, termination or abandonment of the claimant’s contract, or (ii) 30th day after the prime contract is completed, terminated or abandoned. Again, this notice must substantially comply with the new standard form of notice.

Other Notable Changes

In addition, architects and engineers have lien rights regardless of any direct contractual relationship with the owner. Prior to HB 2237, design professionals had lien rights only if they were in contract with the owner. Similarly, surveyors, consultants, and landscapers may now assert a lien claim against an owner regardless of whether they have a contract with the owner.

Further, HB 2237 automatically extends a deadline falling on a weekend or holiday to the next day that is not a weekend or holiday. Practically speaking, as the construction industry adapts to these changes, it would be sensible to comply with deadlines before the weekend or holiday to avoid unnecessary complications.

Subcontractors are on a shorter time frame to file a lien. HB 2237 now requires a subcontractor to file a retainage lien claim within three months after completion of the project, rather than four months. The lien affidavit must be filed by the 15th day of the third month after the month the prime contract was completed, terminated or abandoned.

Unlike subcontractors, the general contractor is not required to send a notice of claim prior to filing a lien affidavit. However, after a claimant files a lien affidavit, proper parties must be notified by the claimant. The general contractor must notify the owner within five days of filing the lien affidavit, while subcontractors must notify both the owner and general contractor within five days of filing.

Finally, the revised Chapter 53 of the Texas Property Code does away with the notarization requirement for lien waivers. However, going up the chain of construction contracts, it may still be prudent to require notarized lien waivers in an effort to prevent fraud.

Confusing? We can help you with that.

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We offer the foregoing to you not as legal advice (please consult with your own attorney regarding your specific facts) but as an overview.  If you desire to know more about how issues like this can affect your business, please contact Ron Holmes at 469.916.7700 ext. 105 or via email.