Whether you are a contractor, supplier, or construction lender, you are likely to encounter mechanic’s liens when working on a construction job in Texas. While Texas construction lien laws provide protection to contractors attempting to retrieve payment from an owner unwilling or unable to pay, these laws are some of the most complex lien laws in the country.
It’s important to familiarize yourself with these laws so that you are able to secure the payment you are owed and protect your lien rights. In this article, a Houston construction lien attorney will provide a brief overview of Texas mechanic’s lien laws and how they affect you as a contractor.
The Fine Print
Before we delve into the specifics of the Texas construction lien laws, it’s important to understand what legislature actually provides you these rights and protections. Article XVI, Section 37 of the Texas Constitution grants mechanics, contractors, and materialmen the right to a claim or interest upon the building or materials made or repaired by them for the value of labor performed or material furnished. Chapter 53 of the Texas Property Code, on the other hand, provides detailed procedure for the formation and enforcement of a mechanic’s lien.
Are You Eligible to File a Mechanic’s Lien?
Texas property code defines three categories of parties as entitled to file a mechanic’s lien:
- Parties who furnish labor and/or material
- Parties who specially fabricate materials
- Design professionals
Subcontractors and general contractors have lien rights under the first category. However, having your work covered and protected by the lien laws is only half the battle. To verify your eligibility to file, you must also ensure that you have sent all of the required Texas construction notices. These notices need to be submitted and received within the Texas lien filing deadline. The time you have to file before the deadline is dependent on whether or not the construction job was residential or non-residential.
Lien Waiver Laws
Although it wasn’t always the case, Texas is now among one of the many states that has defined statutory lien waiver forms to be used by every party. Under Texas Property Code § 53.281 et seq, mechanic’s lien waivers must come in either conditional or unconditional forms and payment is required to validate a conditional or unconditional release. Lien rights are not to be waived before this payment is received.
However, it is also important to be aware of the exceptions to these lien waiver laws. For example, the latest lien waiver requirements apply to the majority of private construction projects but not state, city, government, or federal projects. Additionally, the new statutory lien waiver forms are not required to waive a lien in a residential construction contract if the contract was made before labor or materials were provided.