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Lien or bond claim?

TexasBond ClaimsMechanics LienPayment BondRight to Lien

I am a material supplier on a commercial project in Texas, but I know there is a payment bond on the job. Do I file the lien claim AND a private bond claim? Or just the bond claim?

1 reply

Apr 9, 2020
In Texas, a GC can secure a payment bond on a private project to protect the property owner from having to deal with mechanics lien claims. Specifically, section 53.201(b) states that "If a valid bond is filed, a claimant may not file suit against the owner or the owners property and the owner is relieved of obligations under Subchapter D or E."  Notably, that doesn't state that mechanics lien claims, themselves, aren't blocked - it says that lawsuits are blocked (remember: lien claims aren't lawsuits). So, a lien claimant could still get their lien filed - but they wouldn't be able to enforce that lien. As for whether to make a lien claim or a bond claim - the answer may be "both." Filing a Texas mechanics lien claim will serve as the payment bond claim. But, the claimant could alternatively proceed strictly against the bond.

Making a claim on a payment bond on a Texas private project

There are 2 ways to perfect a claim against a payment bond that's been posted on a Texas private project, according to section 53.205. First, the claimant can follow the ordinary steps for filing a TX mechanics lien. Meaning, a claimant can simply follow the ordinary steps for filing a Texas lien by sending the required notices, following their project's lien deadlines, and filing their lien, like normal. But, the lawsuit would be brought against the bond rather than a traditional enforcement action. Because most TX construction businesses are already familiar with the mechanics lien process, compliance this may be easier. Alternatively, a claimant can use the process laid out by section 53.206 of the Texas Property Code. Under that section, the GC must receive their ordinary notices. But, all notices that'd normally go to the owner should be sent to the surety. Those notices, themselves, would act as the bond claim - and nothing would need to be filed with the county recorder. Finally, as far as enforcement goes - if the bond was recorded before the claim for payment (like at the start of the job), then the claimant will have 1 year to enforce their claim.

Texas private payment bonds will only be effective if filed

Finally, note that a payment bond on a Texas private project will only be effective to block lien enforcements against an owner if the bond is filed with the county clerk - much like the lien would have been. So, by checking the property record, it should be relatively easy to verify whether one is present on your job. In addition to everything above, I think these resources will be useful: - How to File Your Texas Mechanics Lien – A Step by Step Guide to Get You Paid - Texas Mechanics Lien Guide and FAQs - Payment Bonds on Private Construction Projects
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