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Does the Texas Retainage Statute apply to residential construction and renovation projects?


Im debating this issue with my father and I do not see how this apply to residential projects when all the language appears to be for public and commercial projects.

1 reply

Aug 28, 2017
Texas does have exceptionally complicated and intricate laws related to construction payment, retainage, liens, notices, and the like. And, it can easily provide grounds for debate. In this particular case, though, I come down on what appears to be your father's side - in that Texas retainage rules do apply to residential projects. I'll provide some more information below.

§ 53-057 of the Texas property code sets forth notice and other requirements for derivative claimants (not direct contractors) making a claim against contractual retainage. Note that it specifies that: "A claimant may give notice under this section instead of or in addition to notice under Section 53.056 or 53.252 if the claimant is to labor, furnish labor or materials, or specially fabricate materials, or has labored, furnished labor or materials, or specially fabricated materials, under an agreement with an original contractor or a subcontractor providing for retainage." (emphasis added) And section 53.252 is a notice provision specifically related and limited to residential construction projects.

Further, section 53.101 "Required Retainage" holds that retainage shall be held "During the progress of work under an original contract for which a mechanic’s lien may be claimed. . ." Mechanics liens are allowed on residential projects. So, since there is nothing specifically limiting the application of the section, and the notice provisions specifically mention residential notice requirements, it appears that TX retainage rules apply. Further, other sections of the code (related to some aspect of retainage) do specifically disclaim applicability to residential projects, see Sec. 53-107(e); so, if the legislature wanted retainage to not apply to residential projects, that specific disclaimer would appear in the general retainage sections, and the specific reference to residential notice requirements would not appear.

Sorry it looks like your father is right on this one - but I hope this information is helpful.
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