As we regularly discuss on the blog, Texas lien laws are some of the most burdensome in the country. For this reason, there has been a lot of chatter about revising them over the last few months. This includes speculation about potential changes to Texas lien law, news that construction groups lobbying for revisions, and finally some proposed changes. Unfortunately for those doing construction in The Lone Star State, Texas lien law made it through this legislative session untouched.
Texas Lien Law Legislation Falls Short
While no changes came from the recent push to modernize Texas lien law, there is a silver lining- well, at least those who put forth the bill think so. As Rep. Joe Deshotel & Sen. Chuy Hinojosa declared, “Prior to the session, we believed we would be successful if we simply got a hearing. By getting it out of committee, Chairman Oliveira signaled that he is serious about reform!”
Two of the biggest, and perhaps most helpful, changes would have been the overhaul of the notice system and the institution of a Texas lien website.
Construction Citizen has the inside scoop on how construction groups fared this Legislative session. Check out this article for their in-depth analysis.
One welcome change that would have occurred under this legislation was the elimination of monthly notices. Under current Texas lien law, contractors and subs must navigate a maze of two and three month notice requirements. Failure to do so extinguishes lien rights. While the proposed notice system would have instituted some new notice requirements, the effect would still have been a relief for those sending notices.
For the full scoop on what could have been, here’s our full post: Proposed Changes to Texas Lien Law: Notices.
Across the country, more and more states are beginning to utilize online registries and mechanics lien websites. Just recently Pennsylvania instituted its online construction notice directory and Indiana adopted legislation welcoming technology into its construction payment system. Under the proposed Texas lien website, contractors and subs could have made it easier to obtain information on all parties working on a project and allowed parties to post their notices directly to to the site. In order to file a lien, though, parties would still have to use the current method.
The detailed analysis of the lien website can be found here: Proposed Changes to Texas Lien Law: The Lien Website and Filing a Lien.
People say you shouldn’t cry over spilled milk. Considering this milk barely made it out of the fridge (the committee in this awkward metaphor), it’s hard to muster strong feelings one way or the other. Passing new legislation is a tough process which takes a great deal of time and effort. Everyone knew this new legislation would be a long shot going into the legislative session, but it is still encouraging that legislators attempted to address the mess that is Texas lien law.
For the current state of Texas lien law, head over to our Texas Construction Payment Resources.