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February 27, 2023

How to Put a Lien on a House in Texas, Complete Guide to Getting Paid

Texas Mechanics Lien Law is complicated so you may want to talk to a local attorney, or read Chaper 53 of the Texas Property Code yourself to confirm any details of the law. Texas is known to have difficult lien laws, so make sure you read everything carefully before you file!

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Definition of a Residential Project for Liens

Texas breaks down liens based on whether its a commercial or residential project. For this article, we will only be looking at residential projects.

There are some caveats for a "residential project" in Texas in the Texas Property Code. A project is only deemed as residential if it fits the criteria. Here is the definition from Texas:

"Residence" means the real property and improvements for a single-family house, duplex, triplex, or quadruplex or a unit in a multiunit structure used for residential purposes in which title to the individual units is transferred to the owners under a condominium or cooperative system 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.

Talk to your attorney if you are concerned you will not qualify. The interesting wording here is "used or intended to be used as a dwelling by one of the owners". Sometimes property owners tell banks they are living at a property for a better interest rate, sometimes builders build purely for commercial purposes. Make sure that you know the type of project you are working on especially if you are not the general contractor, but instead a supplier or a sub-contractor.

Even if you are the general contractor maybe the owner is holding as a second home or maybe an investment property. Its important to know the intention of the owner, or even start to request this information in your contracts to confirm. The rules are much less strict for commercial properties. So if you do not need to follow the residential rules, you will have an easier time.

The most difficult rules in Texas for filing mechanics liens are on properties that the owner lives in or intends to live in, this is called a homestead property. It has the strictest rules, and the ones we will outline below to make sure you follow the strictest standards for a pre lien notice and all of your other lien documents so you will not have an issue.

Again, since this article is how to put a lien on a house, we are assuming this qualifies as a residential property that you are working directly for the owner and the building is a single-family house, duplex, triplex, or quadruplex or a unit in a multiunit structure.

Determine if You Are Eligible to Place a Lien

Lets just make sure you qualify and meet the criteria below:

  • You are a contractor, sub-contractor, supplier, or laborer on a residential project
  • You have a written or oral agreement with the owner or contractor to perform work or supply materials
  • The owner must have a written agreement with the Original Contractor setting the terms of the agreement and must be signed by both parties if the owner is married
  • You have not been paid in full for your work or materials
  • You have given proper notice (see below on proper notice)
  • You are within the filing timeline (see below)

The last two steps are the most critical ones to follow in order to ensure you comply with the law.

Proper Notice for Residential Projects to file a Mechanics Lien

There is a distinction in Texas law between the Original Contractor and the Sub-Contractor.

Original Contractor - there is no notice requirements prior to filing a lien

Subcontractor -You must send a notice to the owner and the original contractor informing them of an unpaid claim.

This notice for subcontractors has the following requirements:

  • Must be sent via certified mail with return receipt requested, in person, or any traceable delivery method
  • Notice is sent not later than the 15th day of the second month the labor or materials were provided
  • Notice must be sent every month that the labor or materials were provided

Send a Demand Letter Prior to Filing Your Lien

Once you have determined that you are eligible to place a lien, you should send a demand letter to the homeowner. This letter should specify the amount of the debt owed, the date that payment is due, and the consequences of non-payment. The demand letter should also include your contact information and a request for payment.

Finally, File a Notice of Lien

If the homeowner and contractor are not responding to the demand letter, refuses to pay the debt, or ignores your notices for payment you can file a Notice of Lien with the county clerk where the property is located.

Both original contractors and subcontractors must file their lien by the 15th day of the 3rd month after the work has been completed.

Record the Lien with the County

After you have filed the Notice of Lien, you must record it with the county clerk recorder’s office. This will make the lien a matter of public record and makes your lien official with the county. At this point the owner cannot sell or refinance the property without clearing the lien. Your lien claim is official, and you have one year to take action on your claim.

Serve a Copy of the Lien

Once the lien has been recorded, you must serve a copy of the lien on the homeowner. This can be done by personal delivery, certified mail, or by posting a copy of the lien.

Foreclose on the Lien

You have one year from the date of your lien filing to take action on your lien to receive a judgement lien. A judgement lien is a difficult, expensive, and complex legal process that you will not want to start lightly. But if you have to go till the end for a judgement lien, if you've followed these steps you've put yourself in the best position.

Texas Mechanic's Lien FAQ

What is a lien affidavit?

A lien affidavit is the document that creates your mechanics lien. The lien affidavit has specific requirements in order to be valid. Here are a list of the items required on the affidavit:

  • sworn statement of the lien claim amount
  • name and last known address of the property owner
  • statement of work performed or materials furnished
  • name and last known address of the first tier contractor (if you were hired by a GC, and not the owner)
  • property description "legally sufficient for identification"
  • your mailing address and physcial address (if different)
  • if you are not the original contractor dates you sent your pre lien notices
  • a copy of the written contract

How long is a mechanics lien enforceable?

A mechanics lien in Texas expires after one year unless you make a deal with the property owner that a payment will be made. This agreement needs to be in writing and filed with the county records office.

Please explain the homestead exemption.

The most difficult part of the texas lien law is the homestead exemption. The contract requirements are very specific. Most of the rules are written above under the proper notice section, but I will summarize the exact points that need to be hit this is for a debtor's primary residence.

  • The contract needs to be signed prior to doing any work or delivering materials
  • Needs to be in at least 10 point font
  • Needs to contain this exact language: "NOTICE:  THIS IS NOT A LIEN. THIS IS ONLY AN AFFIDAVIT CLAIMING A LIEN."
  • The contract cannot be signed by only one spouse if the owners are married
  • The contract (if signed by the GC) explains that it is not that the GC gets paid, but anyone working on the construction project
  • The contract must be filed in the Texas county that the construction project is taking place
  • The contract must contain the exact statement below:
If a subcontractor or supplier who furnishes materials or performs labor for construction of improvements on your property is not paid, your property may be subject to a lien for the unpaid amount if:
(1)  after receiving notice of the unpaid claim from the claimant, you fail to withhold payment to your contractor that is sufficient to cover the unpaid claim until the dispute is resolved; or
(2)  during construction and for 30 days after completion of your contractor's work, you fail to reserve 10 percent of the contract price or 10 percent of the value of the work performed by your contractor.
"If you have complied with the law regarding the reservation of 10 percent of the contract price or value of work and you have withheld payment to the contractor sufficient to cover any written notice of claim and have paid that amount, if any, to the claimant, any lien claim filed on your property by a subcontractor or supplier, other than a person who contracted directly with you, will not be a valid lien on your property.  In addition, except for the required 10 percent reservation, you are not liable to a subcontractor or supplier for any amount paid to your contractor before you received written notice of the claim."

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