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When does retainage accrue in Texas?


I'm acting as a sub in Texas. 1. When does retainage accrue? 2. Can I file a lien on retainage before it accrues? 3. How does timing come into play in regards to filing a lien on retainage? Is it based on the last day we provided labor or materials or when retainage accrues?

1 reply

Jan 22, 2018
1. Under § 53-053 of the Texas Property Code, a claim for contractual retainage accrues on the earliest of the last day of the month in which all work called for by the contract between the owner and the original contractor has been completed, finally settled, terminated, or abandoned. 2. Filing a lien on retainage must abide by the requirements laid out in Answer 3 – if one of these deadlines is met prior to the accrual of retainage, presumably, a claim of lien on retainage could be made before it technically "accrues." 3. The deadline for claiming a lien on contractual retainage is a bit of a moving target. Pursuant to § 53-103 of the Texas Property Code, the lien for retainage must be filed by the earliest of: (a) the 30th day after work is completed; (b) the 30th day after the original contract is terminated; or (c) the 30th day after the original contractor abandons performance under the original contract. However, the deadlines created at Section 53.057(f) will still apply - so, presumably, if one of those dates comes up first, it'd shorten the timeframe to lien. § 53-057(f) states that the lien must be filed at the earliest of: (i) the date required for filing an affidavit under Section 53.052 (which is the 15th day of the 4th month after the day on which the indebtedness accrues; shortened to the 15th day of the 3rd month for a residential project); (ii) the 40th day after the completion date that is stated in an Affidavit of Completion (if the owner sent the claimant notice of the Affidavit of Completion as required); (iii) the 40th day after the date of termination or abandonment (if the owner sent Notice of Termination or Abandonment as required); or (iv) the 30th day after the date the owner sends a claimant a written Notice of Demand for the claimant to file the affidavit claiming a lien.
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