Understanding Texas Mechanics Liens
Download a free infographic detailing the changes here: Texas 2022 Lien Law Changes Overview
Texas’ mechanics lien laws provide substantial protection for contractors and suppliers. However, there are many requirements that must be followed in order for a construction participant to qualify for, secure, perfect, and enforce lien rights. This page provides frequently asked questions about Texas’ mechanics lien laws and rules, the lien statutes, and a breakdown of the lien and notice details for contractors and suppliers in Texas.
You may want to consult our Step-by-Step Guide on How to File a Texas Mechanics Lien.
Mechanics lien rights in Texas
The Texas property code outlines three primary categories of parties who are able to file a mechanics lien:
- Parties who furnish labor and/or material
- Specialty material fabricators
- Design professionals
General contractors, subcontractors, and material suppliers all have lien rights under the first category. Texas law doesn’t distinguish between subcontractors and suppliers for the purpose of lien and notice requirements.
Parties who specially fabricate materials for certain projects have lien rights in Texas, as well. The lien rights mirror those of any other supplier except for the fact that, if the materials are not suitable for use in another project, the fabricator may claim a lien even if the materials are not delivered to or incorporated into the improvement.
Finally, design professionals are also entitled to Texas mechanics lien rights.
Protecting your lien rights in Texas
In Texas, construction participants who contract directly with the property owner generally do not need to send notice to retain the ability to file an effective mechanics lien. However, everybody else on the project may have to send multiple monthly notices in order to keep their mechanics lien options open.
Unlike many states, Texas doesn’t have a single preliminary notice that must be sent at the start of the project to retain lien rights. Instead, Texas requires parties to send notices for each and every month that they provided labor or materials (but haven’t been paid for them).
So a subcontractor or supplier on a long project who is subject to slow payment (or is not being paid at all) will likely need to send multiple notices. And, these monthly notices are in addition to other notices (like notices for retainage or notices for specially fabricated materials). For more on these notices see:
- Texas Notice of Contractual Retainage: Collecting Retained Funds
- Texas Notice of Specially Fabricated Materials: All You Need to Know
*2022 Note: A Notice of Specially Fabricated Materials is no longer be required for projects that began on or after 1/1/22.
Further, 2nd tier subcontractors and suppliers (parties who contract with someone other the GC/prime contractor) may be required to send multiple notices for each month in which they didn’t receive payment for labor or materials.
Texas monthly notice deadlines
These monthly notices are always due no later than the 15th day of the month either 2 or 3 months after the unpaid for labor or materials were furnished. The amount of potentially required notices can be confusing.
Download the 2022 Texas Monthly Notice Calendar
This calendar takes the guesswork out of calculating the deadline for your Texas monthly notices. We update it annually.Download the calendar
Deadline to file in Texas: On the 15th day…
Texas law makes lien deadlines extremely confusing. The 15th of every month is a deadline for someone. But your deadline is based on the type of project you are working on. It’s calculated from the month that you provided labor or materials for which you weren’t paid.
Download the 2022 Texas Lien Deadline Calendar
This calendar takes the guesswork out of calculating the deadline for your Texas lien claims. We update it annually.Download the calendar
Generally speaking, Texas requires parties to file a mechanics lien by the 15th day of the 4th month after the month in which the lien claimant last furnished labor or material to the project.
In order to also protect the lien claimant’s claim against the retainage at the same time, they should file the lien within 30 days after the completion of the overall project (not their own date of last furnishing).
Residential projects have a shorter deadline
However, if the project is residential in nature, the lien filing deadline is the 15th day of the 3rd month following the month in which the lien claimant last furnished labor and/or materials to the project.
Deadline to file a claim for retainage
Claims against retainage must be filed by the 15th day of the 4th month following the month in which the lien claimant last furnished labor or material to the project AND not later than 30 days after the entire project is completed, abandoned, or terminated. (For parties on a residential project, the deadline is reduced to the 3rd month.)
However, this deadline can be changed if the property owner takes specific action; such as:
- If the owner sends a notice of an affidavit of completion: The claimant must file by the 40th day after the date stated in the affidavit of completion as the date of completion of the work under the original contract.
- If the owner sends a notice of termination or abandonment: The claimant must file by the 40th day after the date of termination or abandonment of the original contract.
- If the owner sends a demand that the claimant file the lien affidavit: The claimant must file by the 30th day after the date the owner sent the claimant to the claimant’s address provided in the notice for contractual retainage.
Texas mechanics lien form
The lien form in Texas is known as an Affidavit of Lien. There are two different forms, depending on a party’s role on the project.
- A party who has a contract directly with the property owner must use the Affidavit of Lien by Original Contractor form.
- Parties who contracted with someone other than the property owner, such as subcontractors and suppliers (referred to as “Derivative Claimants”) must use the Affidavit of Lien by Tiered Contractor or Supplier form.
Filing a mechanics lien in Texas
There are three general steps to file a mechanics lien in Texas:
- Fill out the appropriate Affidavit of Lien form
- Deliver your lien form to the county recorder office
- Serve your lien on the property owner
Read the comprehensive guide: How to file a mechanics lien in Texas.
The Texas Constitutional Lien: Another option for original contractors
It’s nearly always a requirement for claimants to record a mechanic lien. However, Texas provides original contractors with a “constitutional” mechanics lien that is effective without the need for filing. However, any contractor’s ultimate goal in recording a lien is to get paid. Since recording a lien provides notice of the claim to third parties (like potential buyers or financiers of the property), recording the lien is a best practice in all situations.
The constitutional lien is not completely automatic, though. To the extent that work is performed on a homestead property, there are still specific actions that contractors must take and requirements they must meet.
The contractual requirements outlined above do not go away just because the lien being claimed is constitutional rather than statutory. There is no specific requirement to file a lien affidavit in order to claim a constitutional lien against homestead property. However, the Texas Constitution itself sets forth specific requirements that must be met in order to get around the general protection of homestead property from forced sale.
Lien foreclosure/enforcement in Texas
A Texas lien isn’t effective forever, mechanics liens do expire. Unlike many states, liens filed in Texas have a pretty long shelf life. In Texas, the general rule is that the deadline to foreclose on the lien claim is one year from the last date the claimant could have filed a lien.
*2022 Note: The deadline to foreclose claims on projects under the pre-2022 changes, is the later of:
• 2 years(1 year for residential projects) from the last day a mechanics lien can be filed for commercial projects or;
• 1 year from completion of the work.
Foreclosing on a mechanics lien isn’t always worth it. It’s a full-blown lawsuit, with all of the expense and headache that comes with it. If a lien claimant is having trouble collecting their payment after filing a lien, sending a Notice of Intent to Foreclose can be an effective way to get the owner to pay. They want to avoid the cost and time involved in a court proceeding just as much as anyone.
Releasing Texas mechanics liens
In Texas, a lien claimant must release their claim if:
- They receive payment for the claim, and
- The owner requests a release
The process is fairly straightforward, it’s a simple document referencing the filed affidavit of lien that is filed in the same office where the claim was filed. However, even when it is not a requirement, filing a lien release is just good business practice.
Be Careful on Texas Homesteads: Liens Have Strict Requirements
While Texas mechanics lien law protects construction businesses broadly, Texas also provides strong protection for the state’s homeowners.
Texas has offered strict protections to a person’s “homestead” throughout history, both with respect to mechanics liens and with respect to other debts and judgments. The general rule in Texas is that a property upon which the owner resides is his/her homestead. (Although for people who split time between two or more properties, only one property may be a homestead.) In any event, however, it is best practice for contractors in Texas to treat all owner-occupied residential property as a homestead for mechanics lien purposes.
When a construction project occurs on a homestead property, there are specific requirements that must be met in order for any project participant to qualify for mechanics lien protection.
Qualifying for a mechanics lien on a homestead
In order to file Texas mechanics liens on a homestead, the GC/prime/original contractor and the owner must execute a written contract setting forth the terms of their agreement. However, merely having a written contract is not enough by itself.
There are multiple requirements the contract must meet and actions the contractor must take:
- The contract must be executed before any labor or material is furnished
- If the owner is married, the contract must be signed by both spouses
- The contract must be filed with the county clerk of the county in which the homestead is located
The contract be signed by both spouses (if the owner is married) even if the property is only in the name of only one spouse. If the property owner is married and the contract is not signed by both parties, no mechanics lien is allowed to be filed against the property. This puts the potential lien claimant in a position where he must explicitly ask or otherwise determine if the property owner with whom he is contracting is married in order to meet the duty imposed by Texas lien law.
Subcontractors & suppliers are at the GC’s mercy
What all of this means for sub-tier parties on homestead construction projects, though, is that their mechanics lien rights are entirely dependent upon the actions of the GC (or prime/original contractor) before the project even begins.