How to handle Texas monthly notices if you invoice months before you ship?
As a material supplier, we often invoice months before we ship materials. For example, I have 3 unpaid invoices dated from January, but I didn’t ship materials until May. I know some people calculate monthly notice deadlines from invoice dates, but I don’t believe that is legally acceptable in my situation. Can you provide further info on the state statute and what is legally acceptable?
Also, am I required to send a copy of my unpaid invoice with my Texas notices? Where in the statute does it mandate this?
1703 Answered Questions
Legal Associate Levelset
Do Texas monthly notices need to include a copy of an invoice?
Under § 53-056 of the Texas Property Code, "A copy of the statement or billing in the usual and customary form is sufficient as notice" for the notice required. Meaning, when a Texas claimant is required to send notice, they can send a copy of the unpaid statement or billing to serve as the notice. Granted, it's typically more helpful to send something more substantial and indicative of a larger payment issue. But, when sending a monthly notice, if a copy of the statement or billing that's unpaid is also included, it might serve as extra reinforcement that the monthly notice will be sufficient. That being said, it isn't specifically required by statute.
Timing of notices
The timing for Texas monthly notices depends on a number of factors, including project type. I'll try and break them down succinctly below, but Levelset has a great resource for when notices are required, which you can find here.
For residential jobs, under § 53.252 of the Texas Property Code, everyone who was hired by someone other than the property owner must provide a monthly notice by the 15th day of the 2nd month following the month that work was performed and unpaid. These notices must be sent to both the owner and the general contractor.
For non-residential projects, when notice must be sent will depend on the tier of the subcontractor or supplier.
When hired by the GC, under § 53-056(c) of the Texas Property Code, claimants must send notice by the 15th day of the 3rd month following the month when work went unpaid. That notice must be sent to both the owner and the GC.
For those hired by someone other than the owner or the GC, a 2nd month notice must be sent to the GC and a 3rd month notice must be sent to both the owner and the GC, pursuant to § 53-056(b).
Calculating time for Texas notices
It can be hard to calculate the timeframes described above. Often, invoices provide a strong marker for when notices might be required. After all, most businesses operate with monthly invoicing, and notice is required on a monthly basis. So, one notice is sent for all of the unpaid work in the given month - which will generally be indicated on the invoice for that month. But, ultimately, Texas monthly notices are based on months when work is performed but not paid for. So, for suppliers, the "work" being furnished is materials being delivered to the job site. While it may be hard to determine whether or not materials were paid for by a shipping date alone, at least for the calculations of when a notice would need to be sent, a shipping date might suffice. Though, it'd be important to find a way to designate whether that work is actually paid for (and, thereby, whether a notice must be sent).
I think these resources might also be helpful when evaluating Texas monthly notice requirements:
(1)About Texas Preliminary & Monthly Notices
(2) A Simple Explanation of Construction Notices To Help You Protect Lien Rights
(3) In Texas Construction, One Notice is Not Enough