How to establish a Texas notice process

The Best Practice for you is to start each month by reviewing all open and unpaid invoices.

Step 1: Focus on your open invoices that have balances due from particular month(s)

Look at this chart and see which monthly notice(s) could be due this month, and then determine whether you have any unpaid invoices that would trigger your monthly notice.

Month Work Performed In
2nd-Month Notice Due
3rd-Month Notice Due
October 2019
Friday, 12/13
Wednesday, 1/15/20
November 2019
Wednesday, 1/15/20
Friday, 2/14/20
December 2019
Friday, 2/14/20
Friday, 3/13/20 
January 2020
Friday, 3/13/20
Wednesday, 4/15/20
February 2020
Wednesday, 4/15/20
Friday, 5/15/20
March 2020
Friday, 5/15/20
Monday, 6/15/20
April 2020
Monday, 6/15/20
Wednesday, 7/15/20
May 2020 Wednesday, 7/15/20 Friday. 8/14/20
June 2020 Friday. 8/14/20 Tuesday, 9/15/20
July 2020  Tuesday, 9/15/20 Thursday, 10/15/20
August 2020 Thursday, 10/15/20 Friday, 11/13/20

For example, pretend the current month is January. Looking at the table above, you’ll notice the 2nd Month Notice is due for jobs unpaid from November, and the 3rd month Notice is due for jobs unpaid from October. Therefore, if you have any open invoices from October or November, you need to send your monthly notices in January.

Step 2: Sort your jobs by project type

The type of project (residential, commercial, and state/county) will determine whether you need to send a 2 month notice or a 3 month notice.

Step 3: Sort your jobs by project tier

In addition to project type, your tier on the project also plays a role in determining whether you have 2 and/or 3 month notices due.

Group the jobs into buckets based on who your customer was. Figure out when you were hired directly by owner, when you were contracted directly with the GC, and when you were hired by a subcontractor or another second tier party (someone besides owner or GC).

Step 4: Collect the right information to list on your notices

For as many crazy rules that Texas has in their mechanic’s lien and notice scheme, it’s surprising how little guidance there is about the notice forms and documents itself. Texas Property Code §53-056(b) is as detailed as we get, and it simply says: “…must give…written notice of the unpaid balance…”

When it comes to the contents of your Texas Monthly Notice forms, therefore, there is a lot of flexibility.  Nevertheless, it’s a good idea and a best practice to clearly communicate about the debt, the project, and the laws being used in your Texas Monthly Notice. You don’t want to be in a situation where you’re wondering (or fighting about) whether the notice was sufficient or not.

It is best practice to include the following information on your notice:

  1. Your name & address:  You need to identify yourself so that the receiving party knows who is owed the money, and who has the right to file a mechanics lien if unpaid;
  2. Owner & GC Info:  Name & Address of the project’s (i) Property Owner; and (ii) General contractor;
  3. Who Hired You: Provide the name and address of the party that hired you. This may be the same as the general contractor, or not;
  4. Project Location:  Identify the property and job location. Be as detailed and specific as possible. What if there are multiple APNs or multiple properties?  See answer here;
  5. Description of the Improvement:  Describe the work that is being done on the property. For example, if you’re building a school gym, you would say, “School gym;”
  6. Total Outstanding Balance on the Job:  Provide – in dollars – how much money is unpaid for work or materials you’ve already provided to the job;
  7. Month Work Was Performed but Still Not Paid: For all the work that has not yet been paid for, list out the month or months when that work was provided to the job.
  8. Outstanding Balance for Particular Month:  Provide – in dollars – how much money is unpaid for work or materials you provided to the job site in the particular month for which you are sending the notice.