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What is the need for an Affidavit of Completion from owner in TX if we have to file lien on unpaid balances within 4 months of it due?

TexasMechanics Lien Retainage

as a GC, do we even have to care of an owner files an Affidavit of Completion? To lien, we have to file by the 15th day of the 4th month following unpaid draw, so January unpaid, means we file lien by May 15 and so on. Fund trapping notice (retention) is to be filed following completion, so we would file after we are done providing to the site correct?

1 reply

Apr 3, 2018

This is a really good question - especially considering Texas' retainage laws can be all over the place. Typically, a claim against retainage must be filed by the 14th day after the 4th month in which a claimant last furnished labor and materials but also within 30 days of the completion, termination, or abandonment of the project. However, when an Affidavit of Completion has been filed, the time for filing is altered. Upon filing an Affidavit of Completion, a claim must be filed by the 40th day after the date stated in an Affidavit of Completion as the date of completion of the work under the original contract (if the owner sent the claimant notice of an affidavit of completion in the time and manner required). Ultimately, this difference may have little or no effect on an individual claimant - the new deadline to file a claim for retainage after an Affidavit of Completion doesn't appear to be any more rigorous than the original deadline to file, and might actually provide a claimant more time to file. However, it provides a firm deadline that is clearly communicated to all parties. Without an Affidavit of Completion, there may be room for argument as to when a project has actually concluded. This idea can be found across lien laws nationwide - while mechanics lien rights are a powerful right conferred upon construction workers across the country, strict deadlines and notice requirements help limit an owner's liability. Otherwise, owners and general contractors could face seemingly endless liability or mechanics liens popping up out of seemingly nowhere (though, admittedly, that does still seem to happen from time to time).

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