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When is notice required in TX for 1st tier sub

We are trying to set up our TX monthly notice procedures at our company. The Levelset Learning Center resource indicates that for commercial (non-residential) projects for a 1st tier sub contracting with a GC, only a 3 month notice is required and there is no 2 month notice required. I looked at Tex Prop Code 53.056 and it appears from my quick review that both a 2 month and 3 month notice are required of subs at any level. Can you send me the authority for the 1st tier sub on commercial projects needing only a 3 month notice, and not a 2 month notice? Thank you.

1 reply

Feb 3, 2020

Texas monthly notices (and other Texas notices, like notices of specially fabricated materials, and retainage notices) can be complex. As you note, the general "monthly notices" (or fund-trapping notices) for derivative claimants are set forth by § 53-056. That section, in different sub-sections describes the differing notice requirements for 1st-tier subs and subs of lower tiers. § 53-056(c) sets forth the required notices for a first-tier sub. Note the language "If the lien claim arises from a debt incurred by the original contractor, the claimant must give notice to the owner or reputed owner, with a copy to the original contractor, in accordance with Subsection (b)." [emphasis added]. The portion of subsection (b) requiring notice to the owner with a copy to the original contractor is the section requiring notice "not later than the 15th day of the third month." Contrast this with § 53-056(b), which beings "If the lien claim arises from a debt incurred by a subcontractor . . ." [emphasis added] and requires both the 2nd month notice (to the GC) and the 3rd month notice (to the owner and GC).

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