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Should this be residential or commercial?

This project was done for the housing devlopment. The developer was listed as the owner. Because it had a street address when that home was sold it was marked as possible residential. We are now being told we have no lien rights because the last notice sent should have been residential not commercial even though the work was not just for the house it was for the entire development. This raises concern for the multitude of jobs we have for new housing development. At what point if any should this have been listed as residential? Should new housing developments be listed as residential or commercial?

2 replies

Sep 21, 2020

Under Texas Property Code §53.001, a "residence" is defined as a "single-family house, duplex, or quadruples or a unit in a multiunit structure used for residential purposes that is (a) owned by one or more adult persons; and (b) used or intended to be used as a dwelling by one of the owners." And the residential notice rules won't apply unless the property in question falls under this definition. Obviously, things get a little more complicated when the property changes hands mid-project. But, a general rule of thumb is that the classification of the property, for mechanics lien purposes, should be set at the time of contracting. To sum up. If the job is for someone other than the owner who resides or intends to reside at the property in the future then it should be classified as commercial. It shouldn't automatically convert to a residential property mid-project. So for developments, the sale of a unit or property mid-job, shouldn't affect or alter the notice requirements that you've already been following. That being said, since you are aware that the property was sold, it may be wise to err on the side of caution and follow the residential lien filing deadline (i.e. 3rd month as opposed to 4th month) just do avoid any unnecessary disputes or challenges. Also, it's extremely common for an owner to dispute lien rights, even if their arguments aren't quite sound. For more on that see: What to do if your lien is challenged?

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Nov 14, 2022

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