Texas lien law presents a landscape that may be tougher than the state itself. In fact, a while back we ranked Texas’ lien laws as the toughest in the nation. Our feelings haven’t changed. The Texas notice requirements are a mess. However, that might not be the case for much longer. Back in August, we had a post about how changes to Texas lien law may be on the horizon which outlined specific proposed changes recommended by Texas construction attorneys. It appears that we may be drawing closer to that horizon. Recently, construction organizations made their voices heard as the Texas legislature continues their 85th Texas Legislative Session.
Potential Changes to Texas Lien Law
Last week, members from the American Subcontractors Association and the Texas Construction Association participated in their bi-annual Walk on the Capitol event in Austin to voice their opinions on issues in the Texas construction law. Participants used the opportunity to meet with Texas legislators and educate them on the issues faced by the industry. Among the top priorities was to illuminate the burdens created by Texas lien law and convince legislators to take action.
For more on the Walk on the Capitol, check out this post by Construction Citizen.
According to the Texas Construction Association: “Texas’ lien laws are considered by many to be the most burdensome and complex in the country and it is extremely difficult to navigate through those laws.”
The Associated Builders and Contractors of Texas spoke similarly: “The goal is to simplify the preservation of lien rights and eliminate complicated tripwires without upsetting the balance in the current scheme.” The association continued, “The goal of modernization is not to encourage liens, but to avoid the need to file liens by ensuring that contractors and suppliers are paid.”
Priority no. 1 for overhauling Texas lien law should be to simplify the notice requirements. One of the changes that has been considered by the industry is the utilization of a simplified Notice of Furnishing document provided at the outset of a project to replace the current Texas mechanics lien and notice requirements that present complex rules. This would be a welcome change for subcontractors finding themselves overrun with paperwork.
Other proposed changes to Texas lien law include creating a lien agent system and changes to the mechanics lien affidavit. The proposed changes can be found here.
If the purpose of lien laws is to protect the interest of unpaid parties, the current Texas system has failed to support that goal. Luckily, it appears that Texas construction groups are making their voices heard, and new legislation could come sooner than later.
For more on the current state of Texas lien law, check out our Texas Construction Payment Resources.