Texas Preliminary Notice Guide and FAQs

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Texas Preliminary Notice FAQs

About Texas Monthly Notices

Texas Notice Rules
At A Glance


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lien waiver forms required
Notices Are Required Monthly for Most Parties

If you’re a subcontractor, sub-sub, material supplier, equipment lessor, or anybody that did not contract directly with the property owner or general contractor, then you have to send monthly recurring notices in order to protect your right to file a lien.


N/A
GCs Are not required to send Notice

Texas contractors who contract directly with the owner do not need to send Preliminary Notice.


Each
MONTH
Subcontractors Must Send Notice Monthly

For residential projects, notice is required to be sent to the owner and prime contractor by the 15th day of the 2nd month following the month that work was performed and unpaid. (Notice must be sent for each month work was performed and unpaid.)

On non-residential projects, first-tier subcontractors must send notice by the 15th day of the 3rd month following each month work was performed and unpaid.

Subcontractors who contracted with a party other than the direct contractor on non-residential projects must send a notice by both the 15th day of the 2nd month, and the 15th day of the 3rd month following each month in which work was performed and unpaid.


Each
MONTH
Suppliers Must Send Notice Monthy

For residential projects, notice is required to be sent to the owner and prime contractor by the 15th day of the 2nd month following the month that work was performed and unpaid. (Notice must be sent for each month work was performed and unpaid.)

For non-residential projects, first-tier suppliers (those who contract with the prime/direct contractor) must send notice by the 15th day of the 3rd month following each month work was performed and unpaid. And suppliers who contracted with a party other than the direct contractor must send a notice by both the 15th day of the 2nd month, and the 15th day of the 3rd month following each month in which work was performed and unpaid.


icon-can't waive lien rights
You Cannot Send Notices Late

Texas does not allow late notices. Failure to deliver monthly notices when required (even if just one day late) precludes the ability to file a valid mechanics lien for the amount due for the labor or material furnished in the month(s) associated with the improper notice(s). And, failure to provide a notice of specially fabricated materials means that a claimant may only file a lien claim for materials that were actually delivered and incorporated into the project


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Send to GC and Owner.

2nd month notices on residential projects, and 3rd month notices on all other projects must be sent to the owner and the GC. 2nd month notices on non-residential projects and notices of specially fabricated materials must be sent to the owner.

Notices Are Required

Public jobs (i.e. city, state, government) in Texas require preliminary notices in order to retain the right to make a bond claim.


X
No Notice Required from GCs

On public jobs, any claims for non-payment are made against the general contractor's bond. Since GCs will not make a claim against their own bond for non-payment, they do not have bond claim rights, and have no preliminary notice requirement.


Each
MONTH
Subs Must Send Notice Monthly

First-tier subcontractors must send notice by the 15th day of the 3rd month following each month work was performed and unpaid.

Subcontractors who contracted with a party other than the direct contractor must send a notice by both the 15th day of the 2nd month, and the 15th day of the 3rd month following each month in which work was performed and unpaid.


Each
MONTH
Suppliers Must Send Notice Monthy

First-tier suppliers (those who contract with the prime/direct contractor) must send notice by the 15th day of the 3rd month following each month work was performed and unpaid.

Suppliers who contracted with a party other than the direct contractor must send a notice by both the 15th day of the 2nd month, and the 15th day of the 3rd month following each month in which work was performed and unpaid.


icon-can't waive lien rights
You Cannot Send Notices Late

Texas does not allow late notices. Failure to deliver monthly notices when required (even if just one day late) precludes the ability to file a valid bond claim for the amount due for the labor or material furnished in the month(s) associated with the improper notice(s). And, failure to provide a notice of specially fabricated materials means that a claimant may only file a claim for materials that were actually delivered and incorporated into the project


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Send to GC & Surety

In Texas, the 2nd month notice must be sent to the GC; and the 3rd month notice must be sent to the GC and the Surety.

    Texas notice requirements are some of the most complex and difficult preliminary notice rules to be found.  Need help preparing & sending your Texas Monthly Notices?  Check out this Step-by-Step Guide to Preparing & Sending Texas Monthly Notices.

    Not only is there a notice that may be required at the start of work, there can also be (multiple) notices due after each and every month in which labor is performed or materials furnished. This can easily result in a complex mess of paperwork that is difficult to manage, especially on long projects or projects with long payment cycles. For private projects that are not on residential property, the notice requirements are as follows:

    Part of the complexity of the Texas notice scheme is that only a few notices have specific names. While a “notice of specially fabricated material” is pretty straightforward, the recurring notice that is generally required by Texas law can be called a 2-month notice or 3-month notice (depending on which deadline applies), a “fund-trapping notice”, a preliminary notice, or something else. For the information contained on this page, we’ll use the term “monthly notice.”

    While a direct contractor (a party who contracts directly with the property owner) is not required to send a preliminary notice in Texas, if you’re a subcontractor, sub-sub, material supplier, equipment lessor, or anybody that did not contract directly with the property owner, then you have to send monthly recurring notices in order to protect your right to file a lien. The rules and requirements related to Texas notices can change depending on project type, the project tier of the party sending the notice, and the work provided by the noticing party.

    If contracted to provide specially fabricated material to the project, defined by Texas law as: “material fabricated for use as a component of the construction or repair so as to be reasonably unsuitable for use elsewhere.” A notice of specially fabricated material must be provided, in addition to any other monthly notice that may be required, in order to retain lien rights. The notice of specially fabricated material must be sent by the 15th day of the second month following the month in which the claimant received the order for the material.

    Texas notices are unique, not only in scheme, but in deadline. The deadline for every Texas notice other than a notice for contractual retainage claim, is the 15th of the month. And, since Texas monthly notices contain language that is a bit aggressive, and which falls somewhere between a general preliminary notice and a notice of intent to lien, many Texas construction participants don’t want to send the notices unless and until absolutely necessary. This can make the 15th of the month an extremely stressful and busy day for companies performing work in Texas.

    Texas’s monthly notice requirement is generally set forth by § 53-056, and requires a monthly notice to be sent by the 15th day of the second month after each month in which the claimant performed labor or furnished materials for which s/he remains unpaid. And, if the claimant was a sub-sub or supplier to a sub, there is an additional requirement to send a copy of the notice by the 15th day of the third month after furnishing, as well.

    The penalties for not providing the required notices in Texas can be severe. Failure to deliver monthly notices when required (even if just one day late) precludes the ability to file a valid mechanics lien for the amount due for the labor or material furnished in the month(s) associated with the improper notice(s). And, failure to provide a notice of specially fabricated materials means that a claimant may only file a lien for materials that were actually delivered and incorporated into the project (provided other notice requirements are met).

    Texas Notice Frequently Asked Questions

    If you're sending notices in Texas, it's important to get all the details right. The rules are complex and many notices can be required for every project. If you're receiving prelims, it's important to know what you're looking at and know what to do to followup. Since Texas notices are subject to a lot of complex rules and requirements, this can all be difficult. Not to mention that the process is tedious for everyone involved. These are some frequently asked questions about the process.

    Notice FAQs on Private Projects

    Do I Need to Send a Texas Preliminary Notice?

    Yes, except for some circumstances.  The notice requirements in Texas are an absolute mess.

    An article that can help you is this: Guide to Preparing & Sending Texas Monthly Notices.

    The general contractor is generally not required to give any preliminary notice. However, on residential projects, the general contractor must give the owner a disclosure statement before signing the contract, and a written list of all the subs and suppliers intended to be used (updated periodically) unless the owner has specifically waived this requirement in writing (the waiver may be part of the original contract). Further, in order to obtain a lien on a homestead, the general contractor must execute and file with the county clerk a written contract setting forth the terms of the contract prior to the furnishing of labor and/or materials signed by both spouses if the owner is married.

    Subcontractors/suppliers are required to send preliminary notices on all projects. Note that there are also special notice requirements for suppliers of specially fabricated materials, and for claims on contractual retainage.

     

    When do I Need to Send a Texas Preliminary Notice?

    In Texas, when you must send a preliminary notice depends a great deal on the project type and your tier in the project. The following chart is helpful in illustrating which exact notices must be sent:

    Texas notice requirements infographic

     

    Here are some definitions that will help you understand the terminology used in the above chart:

    Residential:  Projects for the construction or repair of a new or existing residence, including improvements appurtenant to the residence, as provided by a residential construction contract.

    Non-Residential:  Projects that are not residential.

    2nd Month Notice:  This is a notice that must be delivered no later than the 15th day of the second month following each month in which the lien claimant furnished labor or materials for which he is still unpaid. If the 15th is a Saturday, Sunday, or holiday, the notice should be mailed prior to the 15th.

    3rd Month Notice:  This is a notice that must be delivered no later than the 15th day of the third month following each month in which the lien claimant furnished labor or materials for which he is still unpaid. If the 15th is a Saturday, Sunday, or holiday, the notice should be mailed prior to the 15th.

    Retainage Notice: The notice requirements required for a valid claim on contractual retainage in Texas changed on 9/1/11. The requirements for contracts entered into after that date – notice must be mailed no later than the earlier of these dates: 1) 30 days after the date the claimant’s agreement providing for retainage is completed, terminated, or abandoned; or 2) the 30th day after the original contract is terminated or abandoned.

    Specially Fabricated Materials Notice: Notice must be given no later than the 15th day of the second month following the month in which the lien claimant receives and accepts the order for materials. “Specially fabricated material” means material fabricated for use as a component of the construction or repair so as to be reasonably unsuitable for use elsewhere.

    This table helps you figure out your deadline to send your monthly notices in Texas. The table of dates takes into count whether the 15th of the month (i.e. the deadline day) falls on a weekend or holiday, and shifts the deadline back to the prior business day, as the law requires.

    To secure lien rights, subcontractors who contract with the GC must send a 2nd-month notice on residential projects, and 3rd-month notice on non-residential projects. Anyone who does not contract with the GC (i.e. sub-subs & suppliers) must send a 2nd-month notice on residential projects, and both 2nd and 3rd-month notice for non-residential projects.

    Monthly notices must be sent for each month work was performed but not paid. Look in the first column to find the month when you performed work that is still unpaid, and then to the 2nd column for the "2nd Month Notice" due date, and the 3rd column for the "3rd Month Notice" due date.

    Month Work Performed In
    2nd-Month Notice Due
    3rd-Month Notice Due
    May 2019
    Monday, 7/15
    Thursday, 8/15
    June 2019
    Thursday, 8/15
    Friday, 9/13
    July 2019
    Friday, 9/13
    Tuesday, 10/15
    August 2019
    Tuesday, 10/15
    Friday, 11/15
    September 2019
    Friday, 11/15
    Friday, 12/13
    October 2019
    Friday, 12/13
    Wednesday, 1/15/20
    November 2019
    Wednesday, 1/15/20
    Friday, 2/14/20
    December 2019
    Friday, 2/14/20
    Friday, 3/13/20
    January 2020
    Friday, 3/13/20
    Wednesday, 4/15/20
    February 2020
    Wednesday, 4/15/20
    Friday, 5/15/20
    March 2020
    Friday, 5/15
    Monday, 6/15

    What if I Send the Texas Preliminary Notice Late?

    Failure to send the required preliminary notices on time in Texas may be fatal to the lien claim. If a supplier of specially fabricated materials misses the specially fabricated materials notice deadline, that lien claimant may not make a claim for any materials that were fabricated, but not delivered.

    How Should the Texas Preliminary Notice be Sent?

    All preliminary notices (except contract regarding homestead) should be sent by registered or certified mail.

    A contract for improvement to a homestead must be filed with the county clerk in the county in which the property is located, prior to the furnishing of labor and/or materials.

    Note, however, that despite the general statutory requirement to send notices by registered or certified mail, Texas specifically states that: “Any notice or other written communication may be delivered in person to the party entitled to the notice or to that party’s agent, regardless of the manner prescribed by law” and “[i]f a written notice is received by the person entitled to receive it, the method by which the notice was delivered is immaterial.”

    Do I Have to Send the Texas Preliminary Notice to Someone Other than the Owner?

    Yes. For homestead, the contract must be recorded with the clerk of the county in which the property is located. General contractors may give any preliminary notice required to the lender, as well as the owner.

    Subcontractors/suppliers must give the required notices to the general contractor as well as the property owner. Suppliers of specially fabricated materials must provide notice to both the owner and general contractor if they supply a subcontractor.

    Is the Texas Preliminary Notice Requirement met when sent or delivered?

    The requirement to send a preliminary notice is fulfilled upon mailing. This is made clear by Texas Property Code § 53-003(c) which provides that “If notice is sent by registered or certified mail, deposit or mailing of the notice in the United States mail in the form required constitutes compliance with the notice requirement.” Note, however, that “[t]his subsection does not apply if the law requires receipt of the notice by the person to whom it is directed.”

    Notice FAQs on Public Projects

    Do I Need to Send a Texas Preliminary Notice?

    Contractor’s Bond: All claimants who do not have a direct contractual relation to the contractor furnishing the bond must send a preliminary notice. Laborers making a claim for wages only are excepted from this requirement.

    Contract Funds: No claimants making a claim on contract funds are required to provide a preliminary notice.

    When do I Need to Send a Texas Preliminary Notice?

    Contractor’s Bond: Preliminary notice must be mailed no later than the 15th day of the 2ndmonth after each month in which the claimant furnished labor and/or materials for which there is an unpaid balance. Notice of claim must be given prior to the 15th of the month if the 15th falls on a Saturday, Sunday, or legal holiday.

    Contract Funds: N/A

    What if I Send the Texas Preliminary Notice Late?

    When required, it is fatal to the claim to not provide the necessary notice.

    How Should the Texas Preliminary Notice be Sent?

    Contractor’s Bond: Preliminary notice must be sent by certified or registered mail – there is no requirement of actual receipt.

    Contract funds: N/A

    To Whom Must the Texas Preliminary Notice be Given?

    Contractor’s Bond: The 2nd month notice must be sent to the prime contractor.

    The 3rd month notice is actually the claim itself, and that must be sent to both the prime contractor and the surety.

    Contract funds: N/A

    Claims for retainage must be given to both the general contractor and the surety.

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    Texas Notice Form Template

    The multiple preliminary notices that may be required in Texas are regulated by statute. While none of the Texas notice forms are required to look any particular way, they all have certain information and specific language that must be included in order for the notices to be effective. The forms provided here for free by Levelset are compliant with the Texas requirements. You can download them for free, or use our system to send them easily on one job, or on every job.

    Texas Residential Notice Letter to Owner - free from

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    In Texas, subcontractors and suppliers (those who do not contract directly with the property owner) must deliver a “Third Month Notice” to the original contractor...

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    Texas Notice of Contract Retainage Form - free from

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