Bill Text: TX HB2237 | 2021-2022 | 87th Legislature | Enrolled
Bill Title: Relating to mechanic's, contractor's, or materialman's liens.
Spectrum: Slight Partisan Bill (Democrat 3-1)
Status: (Passed) 2021-06-15 - Effective on 1/1/22 [HB2237 Detail]
Download: Texas-2021-HB2237-Enrolled.html
H.B. No. 2237 |
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relating to mechanic's, contractor's, or materialman's liens. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 3503.051(3), Insurance Code, is amended | ||
to read as follows: | ||
(3) "Notice of claim" means a written notification by | ||
a claimant who makes a claim for payment from the surety company. | ||
The term does not include a routine statutory notice required by | ||
Section 53.056 or [ |
||
SECTION 2. Section 53.001, Property Code, is amended by | ||
amending Subdivisions (2), (3), (4), (8), (11), (13), and (14) and | ||
adding Subdivision (7-a) to read as follows: | ||
(2) "Improvement" includes: | ||
(A) a house, building, structure, parking | ||
structure, physical appurtenance, pool, utility, railroad, well, | ||
storage facility, abutting sidewalks and streets, [ |
||
in or on those sidewalks and streets, land reclaimed from overflow, | ||
and other fixtures or modifications to real property; | ||
(B) clearing, grubbing, draining, or fencing of | ||
land; | ||
(C) machinery or apparatuses used for raising | ||
water or for supplying or storing water for stock, domestic use, or | ||
irrigation [ |
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(D) work described by Section 53.021(4) [ |
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(E) a design, drawing, plan, plat, survey, or | ||
specification provided by a licensed architect, engineer, or | ||
surveyor [ |
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(3) "Labor" means: | ||
(A) labor used in the direct performance | ||
[ |
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(B) a professional service used in the direct | ||
preparation for the work of a design, drawing, plan, plat, survey, | ||
or specification. | ||
(4) "Material" means all or part of: | ||
(A) the material, machinery, fixtures, or tools: | ||
(i) incorporated into the work; | ||
(ii) used [ |
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performance [ |
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(iii) specially fabricated for an | ||
improvement; [ |
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(iv) ordered and delivered for | ||
incorporation or use [ |
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(B) rent at a reasonable rate and actual running | ||
repairs at a reasonable cost for construction equipment used or | ||
reasonably required and delivered for use in the direct performance | ||
[ |
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or | ||
(C) power, water, fuel, and lubricants consumed | ||
or ordered and delivered for consumption in the direct performance | ||
[ |
||
(7-a) "Purported original contractor" means an | ||
original contractor who can effectively control the owner or is | ||
effectively controlled by the owner through common ownership of | ||
voting stock or ownership interests, interlocking directorships, | ||
common management, or otherwise, or who was engaged by the owner for | ||
the construction or repair of improvements without a good faith | ||
intention of the parties that the purported original contractor was | ||
to perform under the contract. For purposes of this subdivision, | ||
the term "owner" does not include a person who has or claims a | ||
security interest only. | ||
(8) "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. | ||
(11) "Retainage" means an amount representing part of | ||
a contract payment that is not required to be paid to the claimant | ||
within the month following the month in which labor is performed, | ||
material is furnished, or specially fabricated material is | ||
delivered. [ |
||
(13) "Subcontractor" means a person who labors or has | ||
furnished labor or materials to fulfill an obligation to an | ||
original contractor or to a subcontractor of any tier to perform all | ||
or part of the work required by an original contract. | ||
(14) "Work" means any part of construction or repair | ||
of an improvement performed under an original contract. | ||
SECTION 3. Section 53.003, Property Code, is amended by | ||
amending Subsections (b) and (c) and adding Subsection (e) to read | ||
as follows: | ||
(b) Except as provided by Subsection (c) or (d), any [ |
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notice or other written communication required by this chapter must | ||
[ |
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(1) in person to the party entitled to the notice or to | ||
that party's agent; | ||
(2) by certified mail; or | ||
(3) by any other form of traceable, private delivery | ||
or mailing service that can confirm proof of receipt[ |
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(c) If notice is sent by [ |
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deposit or mailing of the notice in the United States mail in the | ||
form required constitutes compliance with the notice requirement. | ||
This subsection does not apply if the law requires receipt of the | ||
notice by the person to whom it is directed. | ||
(e) In computing the period of days in which to provide a | ||
notice or to take any action required under this chapter, if the | ||
last day of the period is a Saturday, Sunday, or legal holiday, the | ||
period is extended to include the next day that is not a Saturday, | ||
Sunday, or legal holiday. | ||
SECTION 4. Section 53.021, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.021. PERSONS ENTITLED TO LIEN. [ |
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a lien if[ |
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[ |
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the owner's agent, trustee, receiver, contractor, or | ||
subcontractor: | ||
(1) labors[ |
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furnishes labor or materials for construction or repair of an | ||
improvement; [ |
||
[ |
||
[ |
||
[ |
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(2) [ |
||
[ |
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(3) is a licensed [ |
||
[ |
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services to prepare a design, drawing, [ |
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plat, survey, or specification; | ||
(4) [ |
||
[ |
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supplies for the installation of landscaping for an [ |
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retention pond, retaining wall, berm, irrigation system, fountain, | ||
or other similar installation; or | ||
(5) [ |
||
[ |
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furnishes labor or materials for, the demolition of an improvement | ||
[ |
||
SECTION 5. Sections 53.022(a), (c), and (d), Property Code, | ||
are amended to read as follows: | ||
(a) The lien extends to the [ |
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improvements [ |
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connected [ |
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(c) A lien against land in a city, town, or village extends | ||
to each lot on which the [ |
||
situated or on which the labor was performed. | ||
(d) A lien against land not in a city, town, or village | ||
extends to not more than 50 acres on which the [ |
||
improvement is situated or on which the labor was performed. | ||
SECTION 6. Section 53.023, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.023. PAYMENT SECURED BY LIEN. The lien secures | ||
payment for: | ||
(1) the labor done or material furnished for the | ||
construction, [ |
||
(2) the specially fabricated material, even if the | ||
material has not been delivered or incorporated into the | ||
construction or repair, less its fair salvage value[ |
||
[ |
||
SECTION 7. Section 53.026(a), Property Code, is amended to | ||
read as follows: | ||
(a) A person who labors[ |
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or furnishes labor or materials under a direct contractual | ||
relationship with a purported original contractor [ |
||
is considered to be [ |
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perfecting a mechanic's lien [ |
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[ |
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[ |
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[ |
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SECTION 8. Section 53.052, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.052. FILING OF AFFIDAVIT. (a) An original | ||
contractor claiming the lien must file an affidavit with the county | ||
clerk: | ||
(1) for projects other than residential construction | ||
projects, not later than the 15th day of the fourth month after the | ||
month in which the original contractor's work was completed, | ||
terminated, or abandoned; or | ||
(2) for residential construction projects, not later | ||
than the 15th day of the third month after the month in which the | ||
original contractor's work was completed, terminated, or | ||
abandoned. | ||
(b) Except as provided by Subsection (c) or (d) [ |
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claimant other than an original contractor [ |
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the lien must file an affidavit with the county clerk [ |
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not later than the 15th day of the fourth [ |
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later of: | ||
(1) the month the claimant last provided labor or | ||
materials; or | ||
(2) the month the claimant would normally have been | ||
required to deliver the last of specially fabricated materials that | ||
have not been actually delivered [ |
||
(c) [ |
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[ |
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project must file an affidavit with the county clerk [ |
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third [ |
||
(1) the month the claimant last provided labor or | ||
materials; or | ||
(2) the month the claimant would normally have been | ||
required to deliver the last of specially fabricated materials that | ||
have not been actually delivered. | ||
(d) A claimant other than an original contractor claiming a | ||
lien for retainage must file an affidavit with the county clerk not | ||
later than the 15th day of the third month after the month in which | ||
the original contract under which the claimant performed was | ||
completed, terminated, or abandoned. | ||
(e) An affidavit under this chapter must be filed in the | ||
county where the improvements are located [ |
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[ |
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kept for that purpose and shall index and cross-index the affidavit | ||
in the names of the claimant, the original contractor, and the | ||
owner. Failure of the county clerk to properly record or index a | ||
filed affidavit does not invalidate the lien. | ||
SECTION 9. Section 53.055(a), Property Code, is amended to | ||
read as follows: | ||
(a) A person who files an affidavit must send a copy of the | ||
affidavit [ |
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owner at the owner's last known business or residence address not | ||
later than the fifth day after the date the affidavit is filed with | ||
the county clerk. | ||
SECTION 10. The heading to Section 53.056, Property Code, | ||
is amended to read as follows: | ||
Sec. 53.056. DERIVATIVE CLAIMANT: NOTICE TO OWNER AND [ |
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ORIGINAL CONTRACTOR. | ||
SECTION 11. Section 53.056, Property Code, is amended by | ||
amending Subsection (a) and adding Subsections (a-1), (a-2), (a-3), | ||
and (a-4) to read as follows: | ||
(a) Except as provided by Section 53.057 [ |
||
claimant other than an original contractor must give the notice | ||
prescribed by Subsections (a-1) and (a-2) [ |
||
lien to be valid. | ||
(a-1) For all unpaid labor or materials provided, the | ||
claimant must send a notice of claim for unpaid labor or materials | ||
to the owner or reputed owner and the original contractor. The | ||
notice must be sent: | ||
(1) for projects other than residential construction | ||
projects, not later than the 15th day of the third month after the | ||
month during which: | ||
(A) the labor or materials were provided; or | ||
(B) the undelivered specially fabricated | ||
materials would normally have been delivered; or | ||
(2) for residential construction projects, not later | ||
than the 15th day of the second month after the month during which: | ||
(A) the labor or materials were provided; or | ||
(B) the undelivered specially fabricated | ||
materials would normally have been delivered. | ||
(a-2) The notice must be in substantially the following | ||
form: | ||
"NOTICE OF CLAIM FOR UNPAID LABOR OR MATERIALS | ||
"WARNING: This notice is provided to preserve lien rights. | ||
"Owner's property may be subject to a lien if sufficient funds are | ||
not withheld from future payments to the original contractor to | ||
cover this debt. | ||
"Date:_______________ | ||
"Project description and/or address: _______________ | ||
"Claimant's name: _______________ | ||
"Type of labor or materials provided: _______________ | ||
"Original contractor's name: _______________ | ||
"Party with whom claimant contracted if different from | ||
original contractor: _______________ | ||
"Claim amount: _______________ | ||
"_______________ (Claimant's contact person) | ||
"_______________ (Claimant's address)" | ||
(a-3) The notice may include an invoice or billing | ||
statement. | ||
(a-4) A claimant may give to the original contractor a | ||
written notice of an unpaid labor or materials invoice that is past | ||
due. A notice under this subsection is not required for a lien to be | ||
valid. | ||
SECTION 12. The heading to Section 53.057, Property Code, | ||
is amended to read as follows: | ||
Sec. 53.057. DERIVATIVE CLAIMANT: NOTICE OF CLAIM FOR | ||
UNPAID [ |
||
SECTION 13. Section 53.057, Property Code, is amended by | ||
amending Subsections (a) and (f) and adding Subsections (a-1), | ||
(a-2), and (a-3) to read as follows: | ||
(a) To the extent that a claim for unpaid retainage is not | ||
included wholly or partly in a notice provided under Section | ||
53.056, a claimant other than an original contractor whose contract | ||
provides for retainage must [ |
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section for a lien for unpaid retainage to be valid [ |
||
(a-1) The claimant must send the notice of claim for unpaid | ||
retainage to the owner or reputed owner and the original contractor | ||
not later than the earlier of: | ||
(1) the 30th day after the date the claimant's contract | ||
is completed, terminated, or abandoned; or | ||
(2) the 30th day after the date the original contract | ||
is terminated or abandoned. | ||
(a-2) The notice must be in substantially the following | ||
form: | ||
"NOTICE OF CLAIM FOR UNPAID RETAINAGE | ||
"WARNING: This notice is provided to preserve lien rights. | ||
"Owner's property may be subject to a lien if sufficient funds are | ||
not withheld from future payments to the original contractor to | ||
cover this debt. | ||
"Date:________________ | ||
"Project description and/or address: ________________ | ||
"Claimant's name: ________________ | ||
"Type of labor or materials provided: ________________ | ||
"Original contractor's name: ________________ | ||
"Party with whom claimant contracted if different from | ||
original contractor: ________________ | ||
"Total retainage unpaid: ________________ | ||
"________________ (Claimant's contact person) | ||
"________________ (Claimant's address)" | ||
(a-3) The notice may include an invoice or billing | ||
statement. | ||
(f) A claimant has a lien on, and the owner is personally | ||
liable to the claimant for, the reserved [ |
||
Subchapter E if the claimant: | ||
(1) gives notice in accordance with this section and: | ||
(A) complies with Subchapter E; or | ||
(B) files an affidavit claiming a lien not later | ||
than [ |
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[ |
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affidavit under the applicable provision of Section 53.052[ |
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[ |
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[ |
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[ |
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(2) gives the notice of the filed affidavit as | ||
required by Section 53.055. | ||
SECTION 14. Sections 53.081(a) and (b), Property Code, are | ||
amended to read as follows: | ||
(a) If an owner receives notice under Section 53.056 or [ |
||
53.057, [ |
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payments to the original contractor an amount necessary to pay the | ||
claim for which he receives notice. The withholding may be in | ||
addition to any reserved funds. | ||
(b) If notice is sent under [ |
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the funds immediately on receipt of the notice. | ||
SECTION 15. Section 53.082, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.082. TIME FOR WHICH FUNDS ARE WITHHELD. Unless | ||
[ |
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settled, discharged, indemnified against under Subchapter H or I, | ||
or determined to be invalid by a final judgment of a court, the | ||
owner shall retain the funds withheld until: | ||
(1) the time for filing the affidavit of mechanic's | ||
lien has passed; or | ||
(2) if a lien affidavit has been filed, [ |
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lien claim has been satisfied or released. | ||
SECTION 16. Section 53.084, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.084. OWNER'S LIABILITY. (a) Except for the amount | ||
the owner fails to reserve [ |
||
Subchapter E, the owner is not liable for any amount paid to the | ||
original contractor before the owner is authorized to withhold | ||
funds under this subchapter. | ||
(b) If the owner has received a notice [ |
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required by Section 53.056 or 53.057 [ |
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lien has been secured, and if the claim has been reduced to final | ||
judgment, the owner is liable and the owner's property is subject to | ||
a claim for any money paid to the original contractor after the | ||
owner was authorized to withhold funds under this subchapter. The | ||
owner is liable for that amount in addition to any amount for which | ||
the owner [ |
||
SECTION 17. The heading to Subchapter E, Chapter 53, | ||
Property Code, is amended to read as follows: | ||
SUBCHAPTER E. FUNDS RESERVED [ |
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LIEN CLAIMANTS | ||
SECTION 18. Sections 53.101, 53.102, 53.103, 53.104, and | ||
53.105, Property Code, are amended to read as follows: | ||
Sec. 53.101. FUNDS REQUIRED TO BE RESERVED [ |
||
(a) During the progress of work under an original contract for | ||
which a mechanic's lien may be claimed and for 30 days after the | ||
work under the contract is completed, the owner shall reserve | ||
[ |
||
(1) 10 percent of the contract price of the work to the | ||
owner; or | ||
(2) 10 percent of the value of the work, measured by | ||
the proportion that the work done bears to the work to be done, | ||
using the contract price or, if there is no contract price, using | ||
the reasonable value of the completed work. | ||
(b) In this section, "owner" includes the owner's agent, | ||
trustee, or receiver. | ||
Sec. 53.102. PAYMENT SECURED BY RESERVED FUNDS [ |
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The reserved [ |
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mechanics who perform labor or service and the payment of other | ||
persons who furnish material, material and labor, or specially | ||
fabricated material for any contractor, subcontractor, agent, or | ||
receiver in the performance of the work. | ||
Sec. 53.103. LIEN ON RESERVED [ |
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has a lien on the reserved [ |
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(1) sends the notices required by this chapter in the | ||
time and manner required; and | ||
(2) except as allowed by Section 53.057(f), files an | ||
affidavit claiming a lien not later than the 30th day after the | ||
earliest of the date: | ||
(A) the work is completed; | ||
(B) the original contract is terminated; or | ||
(C) the original contractor abandons performance | ||
under the original contract. | ||
Sec. 53.104. PREFERENCES. (a) Individual artisans and | ||
mechanics are entitled to a preference to the reserved [ |
||
funds and shall share proportionately to the extent of their claims | ||
for wages and fringe benefits earned. | ||
(b) After payment of artisans and mechanics who are entitled | ||
to a preference under Subsection (a), other participating claimants | ||
share proportionately in the balance of the reserved [ |
||
funds. | ||
Sec. 53.105. OWNER'S LIABILITY FOR FAILURE TO RESERVE FUNDS | ||
[ |
||
subchapter, the claimants complying with Subchapter C or this | ||
subchapter have a lien, at least to the extent of the amount that | ||
should have been reserved [ |
||
under which they are claiming, against the improvements [ |
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properties and against the lot or lots of land necessarily | ||
connected. | ||
(b) The claimants share the lien proportionately in | ||
accordance with the preference provided by Section 53.104. | ||
SECTION 19. Sections 53.106(a), (b), and (d), Property | ||
Code, are amended to read as follows: | ||
(a) An owner may file with the county clerk of the county in | ||
which the property is located an affidavit of completion. The | ||
affidavit must contain: | ||
(1) the name and address of the owner; | ||
(2) the name and address of the original contractor; | ||
(3) a description, legally sufficient for | ||
identification, of the real property on which the improvements are | ||
located; | ||
(4) a description of the improvements furnished under | ||
the original contract; | ||
(5) a statement that the improvements under the | ||
original contract have been completed and the date of completion; | ||
and | ||
(6) a conspicuous statement that a claimant may not | ||
have a lien on retained funds unless the claimant files an affidavit | ||
claiming a lien in the time and manner required by this chapter [ |
||
(b) A copy of the affidavit must be sent [ |
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[ |
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[ |
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date the affidavit is filed or the 10th day after the date the owner | ||
receives the notice of lien liability, whichever is later. | ||
(d) An [ |
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filed under this section [ |
||
date the work under the original contract is completed for purposes | ||
of this chapter [ |
||
is filed after the 10th day after the date of completion, the date | ||
of completion for purposes of this subchapter [ |
||
is the date the affidavit is filed. This subsection does not apply | ||
to a person to whom the affidavit was not sent as required by this | ||
section. | ||
SECTION 20. Sections 53.107(a) and (b), Property Code, are | ||
amended to read as follows: | ||
(a) Not later than the 10th day after the date an original | ||
contract is terminated or the original contractor abandons | ||
performance under the original contract, the owner shall give | ||
notice to each subcontractor who, before the date of termination or | ||
abandonment, has: | ||
(1) given notice to the owner as provided by Section | ||
53.056 or [ |
||
(2) sent to the owner [ |
||
(b) The notice must contain: | ||
(1) the name and address of the owner; | ||
(2) the name and address of the original contractor; | ||
(3) a description, legally sufficient for | ||
identification, of the real property on which the improvements are | ||
located; | ||
(4) a general description of the improvements agreed | ||
to be furnished under the original contract; | ||
(5) a statement that the original contract has been | ||
terminated or that performance under the contract has been | ||
abandoned; | ||
(6) the date of the termination or abandonment; and | ||
(7) a conspicuous statement that a claimant may not | ||
have a lien on the retained funds unless the claimant files an | ||
affidavit claiming a lien in the time and manner required by this | ||
chapter [ |
||
SECTION 21. Section 53.155, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.155. TRANSFER OF PROPERTY SOLD. If the [ |
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sold separately from the land, the officer making the sale shall | ||
provide [ |
||
which to remove and take possession of the purchased improvement | ||
[ |
||
SECTION 22. Section 53.157, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.157. DISCHARGE OF LIEN. An [ |
||
affidavit claiming a mechanic's lien filed under Section 53.052 may | ||
be discharged of record by: | ||
(1) recording a lien release signed by the claimant | ||
under Section 53.152; | ||
(2) failing to institute suit to foreclose the lien in | ||
the county in which the improvement [ |
||
the period prescribed by Section 53.158, 53.175, or 53.208; | ||
(3) recording the original or certified copy of a | ||
final judgment or decree of a court of competent jurisdiction | ||
providing for the discharge; | ||
(4) filing the bond and notice in compliance with | ||
Subchapter H; | ||
(5) filing the bond in compliance with Subchapter I; | ||
or | ||
(6) recording a certified copy of the order removing | ||
the lien under Section 53.160, provided [ |
||
by Section 53.161 was filed by the claimant within 30 days after the | ||
date the order was entered. | ||
SECTION 23. Section 53.158, Property Code, is amended by | ||
amending Subsection (a) and adding Subsections (a-1) and (a-2) to | ||
read as follows: | ||
(a) Except as provided by Subsection (a-2) [ |
||
be brought to foreclose the lien not later than the first | ||
anniversary of [ |
||
file the lien affidavit under Section 53.052 [ |
||
(a-1) Notwithstanding Section 16.069, Civil Practice and | ||
Remedies Code, or any other law, if suit is pursued solely to | ||
discharge a lien because limitations have expired on bringing a | ||
lien foreclosure suit, the lien claimant's rights to pursue a suit | ||
to foreclose a lien are not revived. | ||
(a-2) The limitations period established under Subsection | ||
(a) may be extended to not later than the second anniversary of the | ||
date the claimant filed the lien affidavit under Section 53.052 if, | ||
before the expiration of the limitations period established under | ||
Subsection (a), the claimant enters into a written agreement with | ||
the then-current record owner of the property to extend the | ||
limitations period. The agreement must be recorded with the clerk | ||
of the same county where the lien was recorded and is considered to | ||
be notice of the extension to any subsequent purchaser. | ||
SECTION 24. Sections 53.160(b) and (c), Property Code, are | ||
amended to read as follows: | ||
(b) The grounds for objecting to the validity or | ||
enforceability of the claim or lien for purposes of the motion are | ||
limited to the following: | ||
(1) notice of claim was not timely furnished to the | ||
owner or original contractor as required by Section 53.056 or [ |
||
53.057 [ |
||
(2) an affidavit claiming a lien failed to comply with | ||
Section 53.054 or was not filed as required by Section 53.052; | ||
(3) notice of the filed affidavit was not furnished to | ||
the owner or original contractor as required by Section 53.055; | ||
(4) the deadlines for perfecting a lien claim for | ||
retainage under this chapter have expired and the owner complied | ||
with the requirements of Section 53.101 and paid the retainage and | ||
all other funds owed to the original contractor before: | ||
(A) the claimant perfected the lien claim; and | ||
(B) the owner received a notice of the claim as | ||
required by this chapter; | ||
(5) all funds subject to the notice of a claim to the | ||
owner and a notice regarding the retainage have been deposited in | ||
the registry of the court and the owner has no additional liability | ||
to the claimant; | ||
(6) when the lien affidavit was filed on homestead | ||
property: | ||
(A) no contract was executed or filed as required | ||
by Section 53.254; | ||
(B) the affidavit claiming a lien failed to | ||
contain the notice as required by Section 53.254; or | ||
(C) the notice of the claim failed to include the | ||
statement required by Section 53.254; and | ||
(7) the claimant executed a valid and enforceable | ||
waiver or release of the claim or lien claimed in the affidavit. | ||
(c) The claimant is not required to file a response. The | ||
claimant and any other party that has appeared in the proceeding | ||
must be notified by at least 30 [ |
||
hearing on the motion. A motion may not be heard before the 30th | ||
[ |
||
proceeding. The claimant must be allowed expedited discovery | ||
regarding information relevant to the issues listed under | ||
Subsection (b). | ||
SECTION 25. Section 53.173(c), Property Code, is amended to | ||
read as follows: | ||
(c) The notice must be served on each obligee by mailing a | ||
copy of the notice and the bond to the obligee by certified [ |
||
at the address stated in the lien affidavit for the obligee. | ||
SECTION 26. Section 53.205(a), Property Code, is amended to | ||
read as follows: | ||
(a) The bond protects all persons with a claim that is: | ||
(1) perfected in the manner prescribed for fixing a | ||
lien under Subchapter C [ |
||
(2) perfected in the manner prescribed by Section | ||
53.206. | ||
SECTION 27. Section 53.206, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.206. PERFECTION OF CLAIM. (a) Except as provided | ||
by Subsection (b), to [ |
||
manner other than that prescribed by Subchapter C [ |
||
a lien, a person must [ |
||
[ |
||
applicable, to the original contractor and surety on the bond [ |
||
[ |
||
(b) To perfect a claim for retainage under this section, a | ||
claimant [ |
||
[ |
||
if [ |
||
with the original contractor [ |
||
[ |
||
[ |
||
(c) A claimant that provides the notices described by this | ||
section is not required to file an affidavit claiming a mechanic's | ||
lien to perfect a claim under the bond [ |
||
(d) A person satisfies the requirements of this section | ||
relating to providing notice to the surety if the person mails the | ||
notice by certified [ |
||
(1) at the address stated on the bond or on an | ||
attachment to the bond; | ||
(2) at the address on file with the Texas Department of | ||
Insurance; or | ||
(3) at any other address allowed by law. | ||
SECTION 28. Section 53.207(a), Property Code, is amended to | ||
read as follows: | ||
(a) If the owner receives any of the notices or a lien is | ||
fixed under this chapter [ |
||
to the surety on the bond a copy of all notices received. | ||
SECTION 29. Section 53.208(a), Property Code, is amended to | ||
read as follows: | ||
(a) A claimant may sue the principal and surety on the bond | ||
either jointly or severally, if the [ |
||
60 days after the claimant perfects the claim. | ||
SECTION 30. Section 53.232, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.232. TO WHOM NOTICE GIVEN; MANNER. The lien | ||
claimant must send written notice of his claim by [ |
||
certified mail to: | ||
(1) the officials of the state, county, town, or | ||
municipality whose duty it is to pay the contractor; and | ||
(2) the contractor at the contractor's last known | ||
business or residence address. | ||
SECTION 31. Section 53.238, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.238. NOTICE OF BOND. The official with whom the | ||
bond is filed shall send an exact copy of the bond by [ |
||
claimants. | ||
SECTION 32. The heading to Section 53.254, Property Code, | ||
is amended to read as follows: | ||
Sec. 53.254. CONTRACTUAL REQUIREMENTS FOR LIEN ON | ||
HOMESTEAD. | ||
SECTION 33. Section 53.254(g), Property Code, is amended to | ||
read as follows: | ||
(g) For the lien on a homestead to be valid, the notice | ||
required to be given to the owner under Subchapter C [ |
||
"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 [ |
||
reserve [ |
||
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 [ |
||
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 [ |
||
to a subcontractor or supplier for any amount paid to your | ||
contractor before you received written notice of the claim." | ||
SECTION 34. Section 53.255(b), Property Code, is amended to | ||
read as follows: | ||
(b) The disclosure statement must read substantially | ||
similar to the following: | ||
"KNOW YOUR RIGHTS AND RESPONSIBILITIES UNDER THE LAW. You | ||
are about to enter into a transaction to build a new home or remodel | ||
existing residential property. Texas law requires your contractor | ||
to provide you with this brief overview of some of your rights, | ||
responsibilities, and risks in this transaction. | ||
"CONVEYANCE TO CONTRACTOR NOT REQUIRED. Your contractor may | ||
not require you to convey your real property to your contractor as a | ||
condition to the agreement for the construction of improvements on | ||
your property. | ||
"KNOW YOUR CONTRACTOR. Before you enter into your agreement | ||
for the construction of improvements to your real property, make | ||
sure that you have investigated your contractor. Obtain and verify | ||
references from other people who have used the contractor for the | ||
type and size of construction project on your property. | ||
"GET IT IN WRITING. Make sure that you have a written | ||
agreement with your contractor that includes: (1) a description of | ||
the work the contractor is to perform; (2) the required or | ||
estimated time for completion of the work; (3) the cost of the work | ||
or how the cost will be determined; and (4) the procedure and | ||
method of payment, including provisions for statutory reservation | ||
of funds [ |
||
contractor made a promise, warranty, or representation to you | ||
concerning the work the contractor is to perform, make sure that | ||
promise, warranty, or representation is specified in the written | ||
agreement. An oral promise that is not included in the written | ||
agreement may not be enforceable under Texas law. | ||
"READ BEFORE YOU SIGN. Do not sign any document before you | ||
have read and understood it. NEVER SIGN A DOCUMENT THAT INCLUDES AN | ||
UNTRUE STATEMENT. Take your time in reviewing documents. If you | ||
borrow money from a lender to pay for the improvements, you are | ||
entitled to have the loan closing documents furnished to you for | ||
review at least one business day before the closing. Do not waive | ||
this requirement unless a bona fide emergency or another good cause | ||
exists, and make sure you understand the documents before you sign | ||
them. If you fail to comply with the terms of the documents, you | ||
could lose your property. You are entitled to have your own | ||
attorney review any documents. If you have any question about the | ||
meaning of a document, consult an attorney. | ||
"GET A LIST OF SUBCONTRACTORS AND SUPPLIERS. Before | ||
construction commences, your contractor is required to provide you | ||
with a list of the subcontractors and suppliers the contractor | ||
intends to use on your project. Your contractor is required to | ||
supply updated information on any subcontractors and suppliers | ||
added after the list is provided. Your contractor is not required | ||
to supply this information if you sign a written waiver of your | ||
rights to receive this information. | ||
"MONITOR THE WORK. Lenders and governmental authorities may | ||
inspect the work in progress from time to time for their own | ||
purposes. These inspections are not intended as quality control | ||
inspections. Quality control is a matter for you and your | ||
contractor. To ensure that your home is being constructed in | ||
accordance with your wishes and specifications, you should inspect | ||
the work yourself or have your own independent inspector review the | ||
work in progress. | ||
"MONITOR PAYMENTS. If you use a lender, your lender is | ||
required to provide you with a periodic statement showing the money | ||
disbursed by the lender from the proceeds of your loan. Each time | ||
your contractor requests payment from you or your lender for work | ||
performed, your contractor is also required to furnish you with a | ||
disbursement statement that lists the name and address of each | ||
subcontractor or supplier that the contractor intends to pay from | ||
the requested funds. Review these statements and make sure that the | ||
money is being properly disbursed. | ||
"CLAIMS BY SUBCONTRACTORS AND SUPPLIERS. Under Texas law, if | ||
a subcontractor or supplier who furnishes labor or materials for | ||
the construction of improvements on your property is not paid, you | ||
may become liable and your property may be subject to a lien for the | ||
unpaid amount, even if you have not contracted directly with the | ||
subcontractor or supplier. To avoid liability, you should take the | ||
following actions: | ||
(1) If you receive a written notice from a | ||
subcontractor or supplier, you should withhold payment from your | ||
contractor for the amount of the claim stated in the notice until | ||
the dispute between your contractor and the subcontractor or | ||
supplier is resolved. If your lender is disbursing money directly | ||
to your contractor, you should immediately provide a copy of the | ||
notice to your lender and instruct the lender to withhold payment in | ||
the amount of the claim stated in the notice. If you continue to pay | ||
the contractor after receiving the written notice without | ||
withholding the amount of the claim, you may be liable and your | ||
property may be subject to a lien for the amount you failed to | ||
withhold. | ||
(2) During construction and for 30 days after final | ||
completion, termination, or abandonment of the contract by the | ||
contractor, you should reserve [ |
||
reserve [ |
||
work performed by your contractor. [ |
||
the 10 percent for at least 30 days after final completion, | ||
termination, or abandonment of the contract by the contractor and | ||
if a valid claim is timely made by a claimant and your contractor | ||
fails to pay the claim, you may be personally liable and your | ||
property may be subject to a lien up to the amount that you failed to | ||
reserve [ |
||
"If a claim is not paid within a certain time period, the | ||
claimant is required to file a mechanic's lien affidavit in the real | ||
property records in the county where the property is located. A | ||
mechanic's lien affidavit is not a lien on your property, but the | ||
filing of the affidavit could result in a court imposing a lien on | ||
your property if the claimant is successful in litigation to | ||
enforce the lien claim. | ||
"SOME CLAIMS MAY NOT BE VALID. When you receive a written | ||
notice of a claim or when a mechanic's lien affidavit is filed on | ||
your property, you should know your legal rights and | ||
responsibilities regarding the claim. Not all claims are valid. A | ||
notice of a claim by a subcontractor or supplier is required to be | ||
sent, and the mechanic's lien affidavit is required to be filed, | ||
within strict time periods. The notice and the affidavit must | ||
contain certain information. All claimants may not fully comply | ||
with the legal requirements to collect on a claim. If you have paid | ||
the contractor in full before receiving a notice of a claim and have | ||
withheld the 10 percent of the contract price or value of work | ||
[ |
||
may not be liable for that claim. Accordingly, you should consult | ||
your attorney when you receive a written notice of a claim to | ||
determine the true extent of your liability or potential liability | ||
for that claim. | ||
"OBTAIN A LIEN RELEASE AND A BILLS-PAID AFFIDAVIT. When you | ||
receive a notice of claim, do not release withheld funds without | ||
obtaining a signed and notarized release of lien and claim from the | ||
claimant. You can also reduce the risk of having a claim filed by a | ||
subcontractor or supplier by requiring as a condition of each | ||
payment made by you or your lender that your contractor furnish you | ||
with an affidavit stating that all bills have been paid. Under | ||
Texas law, on final completion of the work and before final payment, | ||
the contractor is required to furnish you with an affidavit stating | ||
that all bills have been paid. If the contractor discloses any | ||
unpaid bill in the affidavit, you should withhold payment in the | ||
amount of the unpaid bill until you receive a waiver of lien or | ||
release from that subcontractor or supplier. | ||
"OBTAIN TITLE INSURANCE PROTECTION. You may be able to obtain | ||
a title insurance policy to insure that the title to your property | ||
and the existing improvements on your property are free from liens | ||
claimed by subcontractors and suppliers. If your policy is issued | ||
before the improvements are completed and covers the value of the | ||
improvements to be completed, you should obtain, on the completion | ||
of the improvements and as a condition of your final payment, | ||
a 'completion of improvements' policy endorsement. This | ||
endorsement will protect your property from liens claimed by | ||
subcontractors and suppliers that may arise from the date the | ||
original title policy is issued to the date of the endorsement." | ||
SECTION 35. Section 53.281(b), Property Code, is amended to | ||
read as follows: | ||
(b) A waiver and release is effective to release the owner, | ||
the owner's property, the contractor, and the surety on a payment | ||
bond from claims and liens only if: | ||
(1) the waiver and release substantially complies with | ||
one of the forms prescribed by Section 53.284; | ||
(2) the waiver and release is signed by the claimant or | ||
the claimant's authorized agent [ |
||
(3) in the case of a conditional release, evidence of | ||
payment to the claimant exists. | ||
SECTION 36. The following provisions of the Property Code | ||
are repealed: | ||
(1) Section 53.003(a); | ||
(2) Section 53.026(b); | ||
(3) Section 53.053; | ||
(4) Sections 53.056(b), (c), (d), (e), and (f); | ||
(5) Sections 53.057(b), (b-1), (c), (d), (e), and (g); | ||
(6) Section 53.058; | ||
(7) Section 53.081(d); | ||
(8) Section 53.083; | ||
(9) Section 53.158(b); and | ||
(10) Sections 53.252 and 53.253. | ||
SECTION 37. The changes in law made by this Act apply only | ||
to an original contract entered into on or after the effective date | ||
of this Act. An original contract entered into before the effective | ||
date of this Act is governed by the law as it existed immediately | ||
before the effective date of this Act, and that law is continued in | ||
effect for that purpose. | ||
SECTION 38. This Act takes effect January 1, 2022. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I certify that H.B. No. 2237 was passed by the House on May 8, | ||
2021, by the following vote: Yeas 136, Nays 1, 1 present, not | ||
voting; and that the House concurred in Senate amendments to H.B. | ||
No. 2237 on May 28, 2021, by the following vote: Yeas 141, Nays 1, | ||
2 present, not voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
I certify that H.B. No. 2237 was passed by the Senate, with | ||
amendments, on May 22, 2021, by the following vote: Yeas 30, Nays | ||
0. | ||
______________________________ | ||
Secretary of the Senate | ||
APPROVED: __________________ | ||
Date | ||
__________________ | ||
Governor |