Bill Text: TX HB3065 | 2017-2018 | 85th Legislature | Comm Sub
Bill Title: Relating to mechanic's, contractor's, or materialman's liens; authorizing a fee; changing the eligibility for community supervision.
Spectrum: Moderate Partisan Bill (Republican 4-1)
Status: (Introduced - Dead) 2017-05-08 - Committee report sent to Calendars [HB3065 Detail]
Download: Texas-2017-HB3065-Comm_Sub.html
85R26105 BEE-F | |||
By: Deshotel, Villalba, Anderson of McLennan, | H.B. No. 3065 | ||
Workman, Leach | |||
Substitute the following for H.B. No. 3065: | |||
By: Workman | C.S.H.B. No. 3065 |
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relating to mechanic's, contractor's, or materialman's liens; | ||
authorizing a fee; changing the eligibility for community | ||
supervision. | ||
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 [ |
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SECTION 2. Section 53.001, Property Code, is amended by | ||
amending Subdivisions (2), (12), (13), and (14) and adding | ||
Subdivisions (2-a), (3-a), (5-a), (5-b), (5-c), (5-d), (7-a), and | ||
(7-b) to read as follows: | ||
(2) "Improved" means, in reference to real property, | ||
having an improvement, as defined by this section. | ||
(2-a) "Improvement" means a house, building, or other | ||
improvement to the real property of an owner. The term includes: | ||
(A) improvements constructed adjacent to the | ||
real property under an original contract with the owner, including | ||
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sidewalks and streets; | ||
(B) clearing, grubbing, draining, or fencing of | ||
land; | ||
(C) wells, cisterns, tanks, reservoirs, or | ||
artificial lakes or pools made for supplying or storing water; | ||
(D) pumps, siphons, and windmills or other | ||
machinery or apparatuses used for raising water for stock, domestic | ||
use, or irrigation; [ |
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(E) planting orchard trees, grubbing out | ||
orchards and replacing trees, and pruning of orchard trees; | ||
(F) levees or embankments erected for the | ||
reclamation of overflow land along a river or creek; and | ||
(G) railroads. | ||
(3-a) "Lien website" means the Internet website | ||
established under Subchapter A-1. | ||
(5-a) "Notice of commencement" means a notice | ||
described by Section 53.125. | ||
(5-b) "Notice of demand" means a notice described by | ||
Section 53.0521. | ||
(5-c) "Notice of furnishing" means a notice described | ||
by Section 53.0561. | ||
(5-d) "Notice of unpaid balance" means a notice | ||
described by Section 53.0562. | ||
(7-a) "Owner" means a person who owns any interest in | ||
real property or an authorized agent, trustee, or receiver of the | ||
person. | ||
(7-b) "Reputed owner" means a person who is: | ||
(A) identified as an owner in a notice of | ||
commencement required under this chapter or in an original contract | ||
for an improvement; or | ||
(B) generally considered or reputed to be the | ||
owner of the real property being improved. | ||
(12) "Specially fabricated material" means material | ||
fabricated for use as a component of the construction or repair of | ||
an improvement so as to be reasonably unsuitable for use elsewhere. | ||
(13) "Subcontractor" means a person who 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 labor done, material | ||
furnished, or materials specially fabricated for the construction | ||
or repair of an improvement performed under an original contract. | ||
SECTION 3. Section 53.003, Property Code, is amended by | ||
amending Subsections (a) and (c) and adding Subsection (e) to read | ||
as follows: | ||
(a) This section applies to notices required by this chapter | ||
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any written communication required under this chapter. | ||
(c) If a 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. | ||
The effective date of the notice is the date the notice is deposited | ||
in the United States mail. This subsection does not apply if the | ||
law requires receipt of the notice by the person to whom it is | ||
directed. | ||
(e) A notice to an owner may be posted on the lien website | ||
under the protocols established for the website for receipt of the | ||
notice. A notice may be sent by an owner by posting the notice on | ||
the lien website or by e-mail with an electronic record of delivery | ||
to the e-mail address provided to the owner in a notice of | ||
furnishing by a person required to be provided with the notice. The | ||
effective date of the notice is the date the notice is sent to the | ||
lien website under the website's protocols or the date the e-mail is | ||
sent. An e-mail sent to a recipient is prima facie evidence of | ||
delivery of a message to an e-mail address to which it is sent. | ||
SECTION 4. Subchapter A, Chapter 53, Property Code, is | ||
amended by adding Section 53.004 to read as follows: | ||
Sec. 53.004. COMPUTATION OF TIME. In computing the period | ||
of days in which to provide a notice or to take an 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 5. Chapter 53, Property Code, is amended by adding | ||
Subchapter A-1 to read as follows: | ||
SUBCHAPTER A-1. LIEN WEBSITE | ||
Sec. 53.011. LIEN WEBSITE. (a) The secretary of state | ||
shall establish and maintain a lien website through the state | ||
electronic Internet portal, as defined by Section 2054.003, | ||
Government Code. | ||
(b) The secretary of state may adopt rules and forms | ||
necessary to implement this subchapter. | ||
Sec. 53.012. POSTING ON LIEN WEBSITE. The lien website must | ||
provide an online form for each notice or written communication | ||
required by this chapter that complies with the content | ||
requirements of this chapter for the notice or communication. The | ||
lien website must allow a person to electronically obtain a form and | ||
post the notice or written communication on the lien website. | ||
Sec. 53.013. SEARCHING LIEN WEBSITE. The lien website must | ||
allow a person to search the notices and written communications | ||
posted on the website with a full or partial: | ||
(1) owner name; | ||
(2) project name; | ||
(3) project address; | ||
(4) project real property legal description; | ||
(5) original contractor name; or | ||
(6) name of person posting a notice or written | ||
communication. | ||
Sec. 53.014. FEES. (a) Notwithstanding Section 2054.2591, | ||
Government Code, and except as provided by Subsection (b), the | ||
secretary of state may not charge a fee for a person to: | ||
(1) electronically obtain a form or post a notice or | ||
written communication on the lien website; or | ||
(2) use the search functions of the lien website. | ||
(b) The secretary of state may charge a fee for a person to | ||
post a notice of commencement on the lien website. | ||
SECTION 6. Section 53.021(a), Property Code, is amended to | ||
read as follows: | ||
(a) A person has a lien if: | ||
(1) the person labors, specially fabricates material, | ||
or furnishes labor or materials for construction or repair in this | ||
state of an[ |
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(2) the person labors, specially fabricates the | ||
material, or furnishes the labor or materials under or arising out | ||
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between the person and [ |
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trustee, receiver, contractor, or subcontractor. | ||
SECTION 7. Section 53.022, Property Code, is amended by | ||
amending Subsection (a) and adding Subsections (b-1) and (e) to | ||
read as follows: | ||
(a) The lien extends to the interest of the owner or the | ||
owner's successor in interest to the real property in the house, | ||
building, fixtures, or improvements, the land reclaimed from | ||
overflow, or the railroad and all of its properties, and to each lot | ||
of land necessarily connected or reclaimed. | ||
(b-1) If an improvement is constructed on real property that | ||
is adjacent to the real property of the owner who entered into the | ||
original contract for the improvements and the adjacent property is | ||
not owned by the owner, the lien extends only to the real property | ||
of the owner and not to the adjacent property. | ||
(e) A lien arising from work performed on common elements of | ||
a condominium governed by Chapter 81 or 82 extends to each unit | ||
owning an interest in the common elements being improved, and is | ||
apportioned based on the relative ownership interests of each unit | ||
in the common elements being improved, if: | ||
(1) the inception of the lien is after the date the | ||
declaration establishing the condominium was recorded; and | ||
(2) the work was performed under a contract with the | ||
council of owners, the unit owners' association of the condominium, | ||
or all of the owners of the units owning an interest in the common | ||
elements being improved. | ||
SECTION 8. Section 53.024, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.024. LIMITATION ON SUBCONTRACTOR'S LIEN. The | ||
amount of a lien claimed by a subcontractor may not exceed: | ||
(1) an amount equal to the proportion of the total | ||
subcontract price, including all additional amounts to which the | ||
subcontractor is entitled as an adjustment to the subcontract, that | ||
the sum of the labor performed, materials furnished, materials | ||
specially fabricated, reasonable overhead costs incurred, and | ||
proportionate profit margin bears to the total subcontract price; | ||
minus | ||
(2) the sum of previous payments received by the | ||
claimant on the subcontract. | ||
SECTION 9. Section 53.026(a), Property Code, is amended to | ||
read as follows: | ||
(a) Except as provided by Section 53.0561, a [ |
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labors, specially fabricates materials, or furnishes labor or | ||
materials under a direct contractual relationship with another | ||
person is considered to be in direct contractual relationship with | ||
the owner and has a lien as an original contractor, if: | ||
(1) the owner [ |
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other person can effectively control the owner through ownership of | ||
voting stock, interlocking directorships, or otherwise; or | ||
(2) the owner contracted with the other person for the | ||
construction or repair of a house, building, or improvements [ |
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and the contract was made without good faith intention of the | ||
parties that the other person was to perform the contract. | ||
SECTION 10. Section 53.052, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.052. FILING OF LIEN CLAIM AFFIDAVIT. (a) Except as | ||
provided by Subsection (b) or Section 53.0521, an original | ||
contractor or subcontractor, including an employee described by | ||
Section 53.0562(a)(1), [ |
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this chapter must file a lien claim [ |
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Subsection (c) [ |
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than the 15th day of the fourth calendar month after the date the | ||
work under the original contract is completed or the original | ||
contract is terminated [ |
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(b) Except as provided by Section 53.0521, an original | ||
contractor or subcontractor, including an employee described by | ||
Section 53.0562(a)(1), [ |
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a residential construction project must file a lien claim [ |
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affidavit as provided by Subsection (c) [ |
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day of the third calendar month after the date the work under the | ||
original contract is completed or the original contract is | ||
terminated [ |
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(c) A lien claim affidavit must be filed with the county | ||
clerk of the county in which the property is located or into which | ||
the railroad extends. The county clerk shall record the affidavit | ||
in records 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. | ||
(d) For purposes of this section, an original contract is | ||
terminated on the date an owner posts a notice of termination on the | ||
lien website. If a notice of commencement has not been filed and | ||
posted under Section 53.125, the owner must send a notice of | ||
termination to each person who has given the owner a notice of | ||
furnishing. | ||
SECTION 11. Subchapter C, Chapter 53, Property Code, is | ||
amended by adding Section 53.0521 to read as follows: | ||
Sec. 53.0521. NOTICE OF DEMAND. (a) If work under an | ||
original contract has been completed or the original contract has | ||
been terminated, an owner may send a notice of demand to the | ||
original contractor or subcontractor requesting the contractor or | ||
subcontractor to file a lien claim affidavit. If the notice is | ||
based on the termination of the original contract, the notice must | ||
state that the original contract was terminated and the date of the | ||
termination. An owner may not send the notice before the original | ||
contract has been terminated. A notice sent before work under the | ||
original contract has been completed is effective only as to a | ||
claimant that has completed the claimant's work and is void as to | ||
any other claimant. | ||
(b) For purposes of this section, an original contract is | ||
terminated on the date an owner posts a notice of termination on the | ||
lien website. If a notice of commencement has not been filed and | ||
posted under Section 53.125, the owner must send a notice of | ||
termination to each person who has provided a notice of furnishing. | ||
(c) Notwithstanding Section 53.003, a notice of demand must | ||
be sent by registered or certified mail to a subcontractor at the | ||
subcontractor's address provided by the notice of furnishing or to | ||
an original contractor at the original contractor's last known | ||
address. | ||
(d) If an owner sends a notice of demand, a claimant that has | ||
completed the claimant's work must, not later than the 30th day | ||
after the date the notice of demand is sent, file a lien claim | ||
affidavit for a claim the claimant has not included in a previously | ||
filed lien claim affidavit. | ||
(e) A claimant that has not completed the claimant's work on | ||
the date the owner sends a notice of demand must file a lien claim | ||
affidavit as provided by Section 53.052(a) or (b), as applicable. | ||
(f) An original contractor or subcontractor waives any | ||
statutory lien rights that have not been perfected if the | ||
contractor or subcontractor does not comply with this section. | ||
(g) A notice of demand must be conspicuously printed in bold | ||
type and in all capital letters not smaller than 10-point type and | ||
must state the following: | ||
"NOTICE OF DEMAND | ||
"WARNING: THIS NOTICE BRIEFLY SUMMARIZES LEGAL REQUIREMENTS | ||
STATED BY SECTION 53.0521, PROPERTY CODE. YOU SHOULD CONSULT AN | ||
ATTORNEY TO FULLY UNDERSTAND YOUR RIGHTS AND OBLIGATIONS. | ||
"THE OWNER IS DEMANDING THAT YOU FILE A LIEN CLAIM AFFIDAVIT | ||
NOT LATER THAN THE 30TH DAY AFTER THE DATE THIS NOTICE WAS SENT TO | ||
YOU. IF THE ORIGINAL CONTRACT HAS BEEN TERMINATED OR IF YOU HAVE | ||
COMPLETED YOUR WORK, YOU ARE REQUIRED, NOT LATER THAN THE 30TH DAY | ||
AFTER THE DATE THIS NOTICE WAS SENT TO YOU, TO FILE YOUR LIEN CLAIM | ||
AFFIDAVIT FOR ANY CLAIMS YOU HAVE NOT INCLUDED IN A LIEN CLAIM | ||
AFFIDAVIT YOU HAVE PREVIOUSLY FILED OR YOU MAY LOSE ANY STATUTORY | ||
LIEN RIGHTS THAT YOU HAVE NOT PREVIOUSLY PERFECTED. | ||
"IF THE ORIGINAL CONTRACT IS NOT TERMINATED OR YOU HAVE NOT | ||
COMPLETED YOUR WORK, THE DEADLINE TO FILE YOUR LIEN CLAIM AFFIDAVIT | ||
IS PROVIDED BY SECTION 53.052(a) OR (b), PROPERTY CODE." | ||
SECTION 12. The heading to Section 53.054, Property Code, | ||
is amended to read as follows: | ||
Sec. 53.054. CONTENTS OF LIEN CLAIM AFFIDAVIT. | ||
SECTION 13. Sections 53.054(a) and (c), Property Code, are | ||
amended to read as follows: | ||
(a) The lien claim affidavit must be signed by the person | ||
claiming the lien or by another person on the claimant's behalf and | ||
must contain substantially: | ||
(1) a sworn statement of the amount of the claim; | ||
(2) the name and last known address of the owner or | ||
reputed owner; | ||
(3) a general statement of the kind of work done and | ||
materials furnished by the claimant [ |
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(4) the name and last known address of the person by | ||
whom the claimant was employed or to whom the claimant furnished the | ||
materials or labor; | ||
(5) the name and last known address of the original | ||
contractor; | ||
(6) a description, legally sufficient for | ||
identification, of the property sought to be charged with the lien; | ||
(7) the claimant's name, mailing address, and, if | ||
different, physical address; and | ||
(8) for a claimant other than an original contractor, | ||
a statement identifying the date each notice of furnishing or | ||
notice of unpaid balance, as applicable, [ |
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(c) The affidavit is not required to set forth individual | ||
items of work done or material furnished or specially fabricated. | ||
The affidavit may use any broad descriptive terms, abbreviations, | ||
or symbols customary in the trade to describe the work done or | ||
material furnished. | ||
SECTION 14. Section 53.055, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.055. NOTICE OF FILED LIEN CLAIM AFFIDAVIT. (a) A | ||
person who files a lien claim [ |
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affidavit by registered or certified mail to the owner or reputed | ||
owner at the owner's last known business or residence address or | ||
post a copy on the lien website not later than the 10th [ |
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after the date the affidavit is filed with the county clerk. | ||
(b) If the person is not an original contractor, and the | ||
person has not posted a copy of the affidavit on the lien website | ||
under Subsection (a), the person must also send a copy of the | ||
affidavit to the original contractor at the original contractor's | ||
last known business or residence address in [ |
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manner and time that the affidavit must be sent to the owner under | ||
Subsection (a) [ |
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SECTION 15. Subchapter C, Chapter 53, Property Code, is | ||
amended by adding Sections 53.0561, 53.0562, 53.0563, and 53.059 to | ||
read as follows: | ||
Sec. 53.0561. NOTICE OF FURNISHING. (a) Except as provided | ||
by Section 53.0562: | ||
(1) a person who contracts with a person other than the | ||
owner and who has a lien as an original contractor under Section | ||
53.026(a) must give a notice of furnishing to the owner or reputed | ||
owner for the lien to be valid; and | ||
(2) a claimant other than an original contractor must | ||
give a notice of furnishing to the owner or reputed owner and the | ||
original contractor for the claimant's lien to be valid. | ||
(b) The notice of furnishing must include: | ||
(1) a general description of the labor or material | ||
furnished or to be furnished by the claimant and, for specially | ||
fabricated material, a separate description of the specially | ||
fabricated material, that may include a list of individual items of | ||
work or material or use terms, abbreviations, or symbols customary | ||
in the trade; | ||
(2) the name, address, and telephone number of the | ||
claimant; | ||
(3) the e-mail address of the claimant, if the | ||
claimant wants to receive notices of postings on the lien website; | ||
(4) the name, address, and telephone number of the | ||
person with whom the claimant contracted to furnish the labor or | ||
material; | ||
(5) a legal description, street address, or other | ||
description that identifies the real property to which the labor or | ||
material was furnished or will be furnished; and | ||
(6) a conspicuous statement in bold type as follows: | ||
"THIS IS NOT A LIEN OR A CLAIM FOR A LIEN. THIS IS ONLY A | ||
NOTICE TO THE OWNER THAT A CONTRACTOR IS FURNISHING OR INTENDS TO | ||
FURNISH LABOR OR MATERIAL TO THE PROJECT. THIS NOTICE IS REQUIRED TO | ||
PRESERVE THE CONTRACTOR'S LIEN RIGHTS UNDER CHAPTER 53, PROPERTY | ||
CODE." | ||
(c) Except as provided by Subsection (d), the notice of | ||
furnishing does not preserve a lien right for labor performed or | ||
material furnished or specially fabricated earlier than 60 days | ||
before the date the notice is provided as required by this section. | ||
(d) If the owner has filed and posted a notice of | ||
commencement under Section 53.125 before the subcontractor begins | ||
performing labor or furnishing or specially fabricating material, | ||
the notice of furnishing does not preserve a lien right for labor | ||
performed or material furnished or specially fabricated by the | ||
subcontractor earlier than 30 days before the date the notice of | ||
furnishing is provided. | ||
(e) Only one notice of furnishing to an owner is required | ||
for all labor or material furnished or to be furnished by each | ||
subcontractor. If a subcontractor contracts to perform work for | ||
the improvement of the owner's property under more than one | ||
original contract, the subcontractor must identify each original | ||
contract in the notice of furnishing or must furnish separate | ||
notices of furnishing for each original contract. | ||
(f) The notice of furnishing is not invalid if, after the | ||
date of the notice, the subcontractor furnishes labor or material | ||
that is not within the scope of the notice's general description of | ||
the labor and material furnished or to be furnished. | ||
(g) A notice of furnishing that does not include the | ||
subcontractor's e-mail address is not invalid. | ||
Sec. 53.0562. NOTICE OF UNPAID BALANCE. (a) Section | ||
53.0561 does not apply, and a claimant must send the notice | ||
described by Subsection (b), if: | ||
(1) the claimant is an employee of a contractor or | ||
subcontractor and personally labored in the construction or repair | ||
of the improvement, and the claimant's claim is for wages for the | ||
personal labor furnished; or | ||
(2) the improvement is a house of not more than four | ||
self-contained units intended for residential purposes on a single | ||
lot or tract of land, or related land development activity on the | ||
lot or tract necessary for the development of the house. | ||
(b) Except as provided by this subsection, the claimant must | ||
give the owner or reputed owner, with a copy to the original | ||
contractor, written notice of the unpaid balance not later than the | ||
15th day of the third month following each month in which all or | ||
part of the labor was performed, material was furnished, or | ||
material was specially fabricated by the claimant. For residential | ||
construction projects governed by Subchapter K, the claimant must | ||
send the notice of unpaid balance not later than the 15th day of the | ||
second month following each month in which all or part of the labor | ||
was performed, material was furnished, or material was specially | ||
fabricated by the claimant. The notice of unpaid balance must be | ||
sent by registered or certified mail, return receipt requested, to | ||
the owner, reputed owner, or original contractor, as applicable, at | ||
the owner's, reputed owner's, or original contractor's last known | ||
business address or residence address. | ||
(c) A copy of a statement or bill in the usual and customary | ||
form is a sufficient notice of unpaid balance under this section. | ||
Sec. 53.0563. WITHHOLDING OF FUNDS AFTER NOTICE OF UNPAID | ||
BALANCE; OWNER LIABILITY. (a) An owner who receives a written | ||
notice of unpaid balance under Section 53.0562 may immediately | ||
withhold from payments to the original contractor an amount | ||
necessary to pay the amount of the unpaid balance stated in the | ||
notice. | ||
(b) Unless payment is made or the claim is otherwise | ||
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 lien claim affidavit has | ||
passed; or | ||
(2) if a lien claim affidavit has been filed, until the | ||
lien claim has been satisfied or released. | ||
(c) An owner is liable and an owner's property is subject to | ||
a claim for an unpaid balance if: | ||
(1) the owner has received the written notice of | ||
unpaid balance required by Section 53.0562; | ||
(2) the lien has been secured; and | ||
(3) the claim has been reduced to final judgment. | ||
(d) An owner that is liable under Subsection (c) is liable | ||
for: | ||
(1) 10 percent of the amount of the original contract; | ||
(2) any amount the owner is authorized to withhold | ||
from the original contractor under this section; and | ||
(3) costs and attorney's fees awarded under Section | ||
53.156. | ||
Sec. 53.059. NOTICE OF COMPLETION. (a) If an owner has | ||
filed and posted on the lien website a notice of commencement under | ||
Section 53.125 and the work under an original contract has been | ||
completed or the original contract has been terminated, the owner | ||
may file a notice of completion with the county clerk of the county | ||
in which the owner's property is located and post the notice on the | ||
lien website. The notice must contain: | ||
(1) the name and address of the owner; | ||
(2) the name and address of each original contractor | ||
covered by the notice; | ||
(3) a description, legally sufficient for | ||
identification, of the real property on which the improvements are | ||
located; | ||
(4) a description of the work furnished under an | ||
original contract covered by the notice; | ||
(5) a statement that the work under an original | ||
contract covered by the notice has been completed or that the | ||
original contract was terminated; and | ||
(6) the date of the completion or termination. | ||
(b) Not later than the 10th day after the notice of | ||
completion is posted on the lien website, the owner must send a copy | ||
of the notice: | ||
(1) to each original contractor identified in the | ||
notice; and | ||
(2) by e-mail to each claimant that has provided a | ||
notice of furnishing to the owner and has provided an e-mail address | ||
to the owner. | ||
(c) For purposes of Section 53.052, the later of the date | ||
the notice of completion is filed or the date the notice is posted | ||
on the lien website is considered the date the work under an | ||
original contract identified in the notice is completed or the | ||
original contract is terminated. This subsection does not apply to | ||
a person to whom the notice of completion was not sent as required | ||
by this section. | ||
(d) Except as provided by Subsection (e), the notice of | ||
completion must contain the following statement in bold type in all | ||
capital letters: | ||
"A CLAIMANT WILL LOSE THE RIGHT TO PERFECT A LIEN IF THE | ||
CLAIMANT DOES NOT FILE A LIEN CLAIM AFFIDAVIT ON OR BEFORE THE 15TH | ||
DAY OF THE FOURTH MONTH AFTER THE DATE OF COMPLETION OF THE WORK." | ||
(e) The notice of completion for a residential construction | ||
project must contain the following statement in bold type in all | ||
capital letters: | ||
"A CLAIMANT WILL LOSE THE RIGHT TO PERFECT A LIEN IF THE | ||
CLAIMANT DOES NOT FILE A LIEN CLAIM AFFIDAVIT ON OR BEFORE THE 15TH | ||
DAY OF THE THIRD MONTH AFTER THE DATE OF COMPLETION OF THE WORK." | ||
SECTION 16. Section 53.081, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.081. AUTHORITY TO WITHHOLD FUNDS FOR BENEFIT OF | ||
CLAIMANTS. [ |
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subcontractor or if an owner receives notice under Section 53.055 | ||
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from payments due or to become due to the original contractor an | ||
amount necessary to pay the claim stated in the lien claim | ||
affidavit, except to the extent that the owner is already | ||
withholding payment for the amount of the claim from the original | ||
contractor as retainage or otherwise [ |
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SECTION 17. Section 53.082, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.082. TIME FOR WHICH FUNDS ARE WITHHELD. The owner | ||
may retain funds under Section 53.081 until [ |
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made under Section 53.0831 [ |
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settled, discharged[ |
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of a court[ |
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SECTION 18. Subchapter D, Chapter 53, Property Code, is | ||
amended by adding Section 53.0831 to read as follows: | ||
Sec. 53.0831. DEMAND FOR NOTICE OF DISPUTE; PAYMENT OF | ||
CLAIM. (a) If a lien claim affidavit is filed by a claimant, the | ||
owner may demand in writing that the original contractor notify the | ||
owner of whether the original contractor intends to dispute the | ||
claim. The owner shall send a copy of the demand to the claimant and | ||
shall furnish the original contractor with a copy of the lien claim | ||
affidavit. | ||
(b) If the original contractor does not give the owner and | ||
the claimant written notice of the original contractor's intent to | ||
dispute the claim before the 30th day after the date of receipt of | ||
the demand, the original contractor is considered to agree to the | ||
demand and the owner may pay the claim when the claim becomes due. | ||
SECTION 19. Subchapter D, Chapter 53, Property Code, is | ||
amended by adding Section 53.0841 to read as follows: | ||
Sec. 53.0841. PERSONAL LIABILITY FOR LIENS. (a) Subject to | ||
this section, an owner is personally liable for the aggregate | ||
amount of the liens perfected on the owner's property under this | ||
chapter. | ||
(b) Subject to Subsection (e), the owner is not personally | ||
liable for more than 10 percent of the value of the work. An owner's | ||
personal liability: | ||
(1) does not affect any lien filed on the owner's | ||
property under this chapter; and | ||
(2) is not affected by a subsequent foreclosure or | ||
other transfer of the owner's interest in all or part of the | ||
property. | ||
(c) Subject to Section 53.122(b), the aggregate amount of | ||
liens of the original contractor and the subcontractors may not | ||
exceed the contract price of the original contract, as may be | ||
modified, for the work. Duplicated claims asserted by claimants | ||
within the same chain of contract may not be added more than once in | ||
determining the aggregate amount of liens. For purposes of this | ||
section, a payment by the owner to the original contractor does not | ||
reduce the aggregate liability of the owner for liens. | ||
(d) A purchaser of property subject to a lien claim under | ||
this chapter is not personally liable for the lien claim in a | ||
foreclosure action brought by a claimant, except the purchaser may | ||
be held liable for costs and attorney's fees awarded under Section | ||
53.156. | ||
(e) An award of costs and attorney's fees under Section | ||
53.156 is not limited by Subsection (b). | ||
SECTION 20. The heading to Section 53.085, Property Code, | ||
is amended to read as follows: | ||
Sec. 53.085. BILLS-PAID AFFIDAVIT REQUIRED. | ||
SECTION 21. Sections 53.085(a), (b), (c), and (d), Property | ||
Code, are amended to read as follows: | ||
(a) Any person who performs work [ |
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shall, if requested and as a condition of payment for such work | ||
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party's agent, a bills-paid [ |
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claimed for payment and stating that the person has paid each of the | ||
person's subcontractors, laborers, or materialmen in full for all | ||
labor and materials provided to the person for the construction. In | ||
the event, however, that the person has not paid each of the | ||
person's subcontractors, laborers, or materialmen in full, the | ||
person shall state in the affidavit the amount owed and the name | ||
and, if known, the address and telephone number of each | ||
subcontractor, laborer, or materialman to whom the payment is owed. | ||
(b) The seller of any real property shall, upon request by | ||
the purchaser or the purchaser's agent prior to closing of the | ||
purchase of the real property, provide to the purchaser or the | ||
purchaser's agent, a written affidavit stating that the seller has | ||
paid each of the seller's contractors, laborers, or materialmen in | ||
full for all labor done and materials provided to the seller through | ||
the date specified in the affidavit for any construction or repair | ||
of improvements on the real property and that the seller is not | ||
indebted to any person, firm, or corporation by reason of any such | ||
construction or repair through the date specified in the affidavit. | ||
In the event that the seller has not paid each of the seller's | ||
contractors, laborers, or materialmen in full for labor done and | ||
material provided through the date specified in the affidavit, the | ||
seller shall state in the affidavit the amount owed and the name | ||
and, if known, the address and telephone number of each contractor, | ||
laborer, or materialman to whom the payment is owed. | ||
(c) The affidavit may include: | ||
(1) a waiver or release of lien rights or payment bond | ||
claims by the affiant that is conditioned on the receipt of actual | ||
payment or collection of funds when payment is made by check or | ||
draft, as provided by Subchapter L; | ||
(2) a warranty or representation that certain bills or | ||
classes of bills will be paid by the affiant from funds paid in | ||
reliance on the affidavit and an identification of the specific | ||
bills that the affiant will not pay from the fund; and | ||
(3) an indemnification by the affiant for any loss or | ||
expense resulting from false or incorrect information in the | ||
affidavit. | ||
(d) A person, including a seller, commits an offense if the | ||
person intentionally, knowingly, or recklessly makes a false or | ||
misleading statement in an affidavit under this section. An | ||
offense under this section is a misdemeanor. A person adjudged | ||
guilty of an offense under this section shall be punished by a fine | ||
not to exceed $4,000 or confinement in jail for a term not to exceed | ||
one year or both a fine and confinement. [ |
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SECTION 22. Section 53.122(a), Property Code, is amended to | ||
read as follows: | ||
(a) Perfected [ |
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inception date are on equal footing without reference to the date of | ||
filing the lien claim affidavit [ |
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SECTION 23. Section 53.124, Property Code, is amended by | ||
amending Subsections (a), (c), (d), and (e) and adding Subsection | ||
(f) to read as follows: | ||
(a) Except as provided by Subsection (c) or (e), for | ||
purposes of Section 53.123, the time of inception of a mechanic's | ||
lien is the commencement of construction or repair of improvements | ||
or delivery of materials to the land on which the improvements are | ||
to be located and on which the materials are to be used. | ||
(c) The later of the date the notice of commencement is | ||
filed or is posted on the lien website is the time of inception of a | ||
mechanic's lien for the work or material described by the notice | ||
that is performed or furnished on or after the later of the date the | ||
notice is filed or posted. For work or material performed or | ||
furnished before the date a notice of commencement is filed or | ||
posted and for work excluded by the notice of commencement, the time | ||
of inception of a mechanic's lien is provided by Subsection (a). | ||
For work under an original contract entered into after a notice of | ||
completion is filed and posted under Section 53.059, the time of | ||
inception of a mechanic's lien is the date provided by Subsection | ||
(a) or the date a new notice of commencement is posted. [ |
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(d) If a lien, encumbrance, or mortgage securing an interest | ||
in the land is filed with the county clerk on or before the date the | ||
notice is posted, the lien, encumbrance, or mortgage has priority | ||
over a mechanic's lien with a time of inception that is the date of | ||
the notice, regardless of the order in which the instruments are | ||
filed with the county clerk. [ |
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(e) The time of inception of a lien that is created under | ||
Section 53.021(c)[ |
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claim [ |
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of a lien claimed by a person entitled to a lien under Section | ||
53.021(c)[ |
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determined by the date of recording. A lien created under Section | ||
53.021(c)[ |
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grantee or purchaser who acquires an interest in the real property | ||
before the time of inception of the lien. | ||
(f) Unless the landscaping work for which a person may have | ||
a lien under Section 53.021(d) or the demolition services for which | ||
a person may have a lien under Section 53.021(e) are included in a | ||
notice of commencement, the time of inception of a lien under | ||
Section 53.021(d) or (e) is the date of recording of a lien claim | ||
affidavit under Section 53.052, and priority is determined by the | ||
date of recording. Except as provided by this subsection, a lien | ||
created under Section 53.021(d) or (e) is not valid against a | ||
grantee or purchaser who acquires an interest in the real property | ||
before the time of inception of the lien. | ||
SECTION 24. Subchapter F, Chapter 53, Property Code, is | ||
amended by adding Section 53.125 to read as follows: | ||
Sec. 53.125. NOTICE OF COMMENCEMENT. (a) An owner may file | ||
a notice of commencement with the county clerk of the county in | ||
which the real property being improved under an original contract | ||
is located. An owner who elects to file a notice of commencement | ||
shall post the notice on the lien website. A notice under this | ||
section must be acknowledged and be in a form that substantially | ||
complies with the following: | ||
"NOTICE OF COMMENCEMENT | ||
"Improvements will be made to certain real property, and in | ||
accordance with Chapter 53, Property Code, the following | ||
information is provided by this notice of commencement: | ||
"(1) Legal description and, if applicable, street | ||
address of property: _______________. | ||
"(2) Project name and brief description of work to be | ||
performed or materials to be furnished: _______________. | ||
"(3) Work or materials not included in this notice of | ||
commencement: _______________. | ||
"(4) Owner information or lessee information if the | ||
lessee contracted for the work: | ||
(A) Name and address: _______________. | ||
(B) Interest in property (check appropriate | ||
box): | ||
□ Fee simple title | ||
□ Lease | ||
□ Other (explain): _______________. | ||
(C) Name and address of fee simple titleholder to | ||
property (if different from owner listed above): _______________. | ||
"(5) Original contractor(s) for work or designated | ||
portions of the work (repeat as necessary): | ||
(A) Name and address: _______________. | ||
(B) Contractor's phone number: _______________. | ||
"(6) Surety or sureties for original contractor (if | ||
applicable, a copy of the payment bond is attached): | ||
(A) Name and address: _______________. | ||
(B) Phone number: _______________. | ||
"(7) Lender(s) providing financing for the work that | ||
is securing a mortgage on or a security interest in the property | ||
(repeat as necessary): | ||
(A) Name and address: _______________. | ||
(B) Lender's phone number: _______________. | ||
"(8) Secretary of state's lien website address: | ||
_______________. | ||
"Date: ______________ | ||
"_____________ (Owner name) | ||
"By:_______________ (Signature) | ||
"(Insert acknowledgment)." | ||
(b) Incorrect information contained in the notice of | ||
commencement furnished by an owner does not adversely affect the | ||
rights of a lien claimant reasonably relying on the information | ||
against the owner or the property of the owner. If a subcontractor | ||
performs labor or furnishes materials or specially fabricated | ||
materials described by the notice of commencement and the notice of | ||
commencement does not identify the original contractor under which | ||
the labor was performed or materials were furnished or specially | ||
fabricated at the time the subcontractor first performs the labor | ||
or furnishes or specially fabricates the materials, the notice of | ||
furnishing by the subcontractor preserves the lien claimant's | ||
rights for the period provided by Section 53.0561(c). | ||
(c) The owner shall send a copy of the notice of | ||
commencement to each subcontractor not later than the fifth day | ||
after the date the owner receives a written request for a copy from | ||
the subcontractor, unless the subcontractor has received a physical | ||
copy of the notice. | ||
(d) Unless a notice of commencement has been filed and | ||
posted under this section, a subcontractor who has not received a | ||
physical copy of the notice may request in writing a copy from the | ||
original contractor or a subcontractor with whom the requesting | ||
subcontractor has privity of contract. If the original contractor | ||
or subcontractor has a copy of the notice, the original contractor | ||
or subcontractor shall send a copy of the notice to the requesting | ||
subcontractor not later than the fifth day after the date of receipt | ||
of the written request. If the requesting subcontractor does not | ||
receive a copy of the notice as required by this section, the person | ||
failing to send the copy under this subsection is liable to the | ||
requesting subcontractor for all actual expenses reasonably | ||
incurred by the requesting subcontractor in obtaining the | ||
information that would have been contained in the notice. | ||
(e) A notice of commencement posted on the lien website may | ||
be amended by the owner by sending the amended notice to the lien | ||
website. The effective date of the amended notice is the date the | ||
amended notice is posted on the lien website. The owner shall send | ||
notice of the amended notice to contractors who have provided a | ||
notice of furnishing to the owner before the effective date of the | ||
amended notice of commencement. | ||
SECTION 25. Section 53.151(b), Property Code, is amended to | ||
read as follows: | ||
(b) A surety issuing a payment bond or performance bond in | ||
connection with the work [ |
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other creditors of its principal to contract funds to the extent of | ||
any loss it suffers or incurs. That priority does not excuse the | ||
surety from paying any obligations that it may have under its | ||
payment bonds. | ||
SECTION 26. Section 53.153(a), Property Code, is amended to | ||
read as follows: | ||
(a) If an affidavit claiming a mechanic's lien is filed by a | ||
person other than the original contractor, the original contractor | ||
shall defend at the original contractor's [ |
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brought on the claim unless the owner is in breach of the owner's | ||
contractual obligations to the original contractor under the | ||
original contract. | ||
SECTION 27. Section 53.154, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.154. FORECLOSURE. (a) A mechanic's lien may be | ||
foreclosed only on judgment of a court of competent jurisdiction | ||
foreclosing the lien and ordering the sale of the property subject | ||
to the lien. | ||
(b) A suit to foreclose the lien must be brought in a court | ||
of competent jurisdiction in the county in which the real property | ||
that is subject to the lien is located. | ||
SECTION 28. Section 53.157, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.157. DISCHARGE OF LIEN. A mechanic's lien or | ||
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 | ||
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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 and a certificate from the clerk of | ||
the court that states that no bond or deposit as described by | ||
Section 53.161 was filed by the claimant within 30 days after the | ||
date the order was entered. | ||
SECTION 29. Section 53.158, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.158. PERIOD FOR BRINGING SUIT TO FORECLOSE LIEN. | ||
(a) Except as provided by Subsection (b), suit must be brought to | ||
foreclose the lien not later than the first anniversary of [ |
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claim affidavit under Section 53.052 [ |
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(b) The period of limitations under Subsection (a) may be | ||
extended to not later than the second anniversary of the last date | ||
the claimant may file the affidavit if the claimant enters into a | ||
written agreement with the then current record owner of the | ||
property to extend the period and files the written agreement with | ||
the clerk of the county where all or part of the property is located | ||
before the expiration of the period provided by Subsection (a). | ||
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SECTION 30. Sections 53.159(a), (b), (c), (d), and (f), | ||
Property Code, are amended to read as follows: | ||
(a) If a notice of commencement has not been filed and | ||
posted under Section 53.125, an [ |
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shall furnish the following information within a reasonable time, | ||
but not later than the 10th day after the date the request is | ||
received, to any person furnishing labor or materials for the | ||
project: | ||
(1) a description of the real property being improved | ||
legally sufficient to identify it; | ||
(2) whether there is a surety bond and if so, the name | ||
and last known address of the surety and a copy of the bond; | ||
(3) whether there are any prior recorded liens or | ||
security interests on the real property being improved and if so, | ||
the name and address of the person having the lien or security | ||
interest; and | ||
(4) the date on which the original contract for the | ||
project was executed. | ||
(b) If a notice of commencement has not been filed and | ||
posted under Section 53.125, an [ |
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written request by a person who furnished work under the original | ||
contract, shall furnish to the person the following information | ||
within a reasonable time, but not later than the 10th day after the | ||
date the request is received: | ||
(1) the name and last known address of the person to | ||
whom the original contractor furnished labor or materials for the | ||
construction project; | ||
(2) whether the original contractor has furnished or | ||
has been furnished a payment bond for any of the work on the | ||
construction project and if so, the name and last known address of | ||
the surety and a copy of the bond; and | ||
(3) the date on which the original contract for the | ||
project was executed. | ||
(c) A subcontractor, on written request by an owner of the | ||
property being improved, the original contractor, a surety on a | ||
bond covering the original contract, or any person furnishing work | ||
under the subcontract, shall furnish to the person the following | ||
information within a reasonable time, but not later than the 10th | ||
day after the date the request is received: | ||
(1) the name and last known address of each person from | ||
whom the subcontractor purchased labor or materials for the | ||
construction project, other than those materials that were | ||
furnished to the project from the subcontractor's inventory; | ||
(2) the name and last known address of each person to | ||
whom the subcontractor furnished labor or materials for the | ||
construction project; [ |
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(3) whether the subcontractor has furnished or has | ||
been furnished a payment bond for any of the work on the | ||
construction project and if so, the name and last known address of | ||
the surety and a copy of the bond; and | ||
(4) the date the subcontractor first performed labor, | ||
furnished materials, or specially fabricated materials for the | ||
construction project for which any claim for payment is being | ||
sought. | ||
(d) Not later than the 30th day after the date a written | ||
request is received from the owner, the contractor under whom a | ||
claim of lien or under whom a bond is made, or a surety on a bond on | ||
which a claim is made, a claimant for a lien or under a bond shall | ||
furnish to the requesting person a copy of any applicable written | ||
agreement, purchase order, or contract and any billing, statement, | ||
or payment request of the claimant reflecting the amount claimed | ||
and the work performed by the claimant for which the claim is made. | ||
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(f) A person, other than a claimant requested to furnish | ||
information under Subsection (d), who fails to furnish information | ||
as required by this section not posted on the lien website is liable | ||
to the requesting person for that person's reasonable and necessary | ||
costs incurred in procuring the requested information. | ||
SECTION 31. 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 furnishing or notice of unpaid balance | ||
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required by Section 53.0561 or 53.0562 [ |
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(2) a lien claim [ |
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failed to comply with Section 53.054 or was not filed as required by | ||
Section 53.052; | ||
(3) notice of the filed lien claim affidavit was not | ||
furnished to the owner or original contractor as required by | ||
Section 53.055 and the owner or original contractor was materially | ||
prejudiced by the violation; | ||
(4) [ |
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homestead property: | ||
(A) no contract was executed or filed as required | ||
by Section 53.254; or | ||
(B) the lien claim affidavit [ |
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failed to contain the notice as required by Section 53.254; [ |
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(5) [ |
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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 not later than the 21st day [ |
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before the date of the hearing on the motion. A motion may not be | ||
heard before the 21st day after the date the claimant answers or | ||
appears in the proceeding. | ||
SECTION 32. Section 53.161(f), Property Code, is amended to | ||
read as follows: | ||
(f) If the claimant fails to file the bond or the deposit in | ||
lieu of the bond in compliance with this section, the owner may | ||
file: | ||
(1) a certified copy of the order; and | ||
(2) a certificate from the clerk of the court stating | ||
that: | ||
(A) no bond or deposit in lieu of the bond was | ||
filed before the later of: | ||
(i) the 30th day [ |
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date the order was entered by the court; or | ||
(ii) the date ordered by the court under | ||
Subsection (b); and | ||
(B) no order staying the order to remove the lien | ||
was entered by the court. | ||
SECTION 33. Section 53.172, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.172. BOND REQUIREMENTS. The bond must: | ||
(1) describe the property on which the liens are | ||
claimed; | ||
(2) refer to each lien claimed in a manner sufficient | ||
to identify it; | ||
(3) be in an amount that is double the amount of the | ||
liens referred to in the bond unless the total amount claimed in the | ||
liens exceeds $60,000 [ |
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an amount that is the greater of 1-1/2 times the amount of the liens | ||
or the sum of $60,000 [ |
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(4) be payable to the parties claiming the liens; | ||
(5) be executed by: | ||
(A) the party filing the bond as principal; and | ||
(B) a corporate surety authorized and admitted to | ||
do business under the law in this state and licensed by this state | ||
to execute the bond as surety, subject to Section 3503.005, | ||
Insurance Code [ |
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(6) be conditioned substantially that the principal | ||
and sureties will pay to the named obligees or to their assignees | ||
the amount that the named obligees would have been entitled to | ||
recover if their claims had been proved to be valid and enforceable | ||
liens on the property. | ||
SECTION 34. Section 53.201(b), Property Code, is amended to | ||
read as follows: | ||
(b) If a valid bond is filed, a claimant may not file suit | ||
against the owner or the owner's property and the owner is not | ||
authorized to withhold funds or pay a claimant on demand [ |
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SECTION 35. Section 53.202, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.202. BOND REQUIREMENTS. The bond must: | ||
(1) be in a penal sum at least equal to the total of the | ||
original contract amount; | ||
(2) be in favor of the owner; | ||
(3) have the written approval of the owner endorsed on | ||
it; | ||
(4) be executed by: | ||
(A) the original contractor as principal; and | ||
(B) a corporate surety authorized and admitted to | ||
do business in this state and licensed by this state to execute | ||
bonds as surety, subject to Section 3503.005, Insurance Code [ |
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(5) be conditioned on prompt payment for all labor, | ||
subcontracts, materials, specially fabricated materials, and | ||
normal and usual extras not exceeding 15 percent of the contract | ||
price; and | ||
(6) clearly and prominently display on the bond or on | ||
an attachment to the bond: | ||
(A) the name, mailing address, physical address, | ||
and telephone number, including the area code, of the surety | ||
company to which any notice of claim should be sent; or | ||
(B) the toll-free telephone number maintained by | ||
the Texas Department of Insurance under Subchapter B, Chapter 521, | ||
Insurance Code, and a statement that the address of the surety | ||
company to which any notice of claim should be sent may be obtained | ||
from the Texas Department of Insurance by calling the toll-free | ||
telephone number. | ||
SECTION 36. Sections 53.206(a) and (b), Property Code, are | ||
amended to read as follows: | ||
(a) To perfect a claim against a bond in a manner other than | ||
that prescribed by Subchapter C or K for fixing a lien, a person | ||
must: | ||
(1) give to the original contractor a notice of | ||
furnishing or a notice of unpaid balance, unless the person has | ||
contracted directly with the original contractor [ |
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(2) give to the surety on the bond a written notice of | ||
the amount and nature of the claim and a copy of the notice to the | ||
original contractor within the time period required for filing a | ||
lien claim affidavit under Section 53.052 [ |
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(b) To perfect a claim under this section, a person is not | ||
required to [ |
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SECTION 37. 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 [ |
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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 be [ |
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for the unpaid amount, even if you have not contracted directly with | ||
the subcontractor or supplier. To minimize your [ |
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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. | ||
(2) 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. | ||
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"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 unpaid balance [ |
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affidavit is filed on your property, you should know your legal | ||
rights and responsibilities regarding the claim. Not all claims are | ||
valid. In order to perfect a valid lien, a notice of unpaid balance | ||
[ |
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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 your property | ||
is a homestead and you did not enter into a written contract with | ||
your contractor that complies with the statutory requirements for a | ||
lien on a homestead, your contractor, the subcontractor, or the | ||
supplier may not claim a valid lien on your property. [ |
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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 unpaid balance [ |
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funds without obtaining a signed and notarized release of lien and | ||
claim from the claimant. You can [ |
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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 38. Sections 53.259(a) and (c), Property Code, are | ||
amended to read as follows: | ||
(a) As a condition of final payment under a residential | ||
construction contract, the original contractor shall, at the time | ||
the final payment is tendered, execute and deliver to the owner, or | ||
the owner's agent, an affidavit acknowledging the amount claimed | ||
for payment and stating that the original contractor has paid each | ||
person in full for all labor and materials used in the construction | ||
of improvements on the real property. If the original contractor | ||
has not paid each person in full, the original contractor shall | ||
state in the affidavit the amount owed and the name and, if known, | ||
the address and telephone number of each person to whom a payment is | ||
owed. | ||
(c) A person commits an offense if the person intentionally, | ||
knowingly, or recklessly makes a false or misleading statement in | ||
an affidavit under this section. An offense under this section is a | ||
misdemeanor. A person adjudged guilty of an offense under this | ||
section shall be punished by a fine not to exceed $4,000 or | ||
confinement in jail for a term not to exceed one year or both a fine | ||
and confinement. [ |
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SECTION 39. Section 53.281, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.281. WAIVER AND RELEASE OF LIEN OR PAYMENT BOND | ||
CLAIM. (a) Except as provided by Section 53.287, any [ |
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and release of a lien or payment bond claim under this chapter is | ||
unenforceable unless a waiver and release is executed and delivered | ||
in accordance with this subchapter. | ||
(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 and acknowledged [ |
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(3) in the case of a conditional release, evidence of | ||
payment to the claimant exists. | ||
(c) A waiver and release that substantially complies with a | ||
form required by Section 53.284 may be combined with a bills-paid | ||
affidavit that substantially conforms to the requirements of | ||
Section 53.085 or 53.259. | ||
SECTION 40. Section 53.283, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.283. UNCONDITIONAL WAIVER AND RELEASE: PAYMENT | ||
REQUIRED. (a) A person may not require a claimant or potential | ||
claimant to execute an unconditional waiver and release for a | ||
progress payment or final payment amount unless the claimant or | ||
potential claimant received payment in that amount in good and | ||
sufficient funds. | ||
(b) Notwithstanding Subsection (a), a contractual | ||
requirement for a claimant to waive or release the claimant's lien | ||
rights under this chapter before performance of the work for which | ||
the claim for payment is asserted is void. | ||
(c) A claimant may tender an unconditional waiver and | ||
release for payment before the actual receipt of a payment to be | ||
delivered in trust to an attorney, title insurance company, title | ||
insurance agent, or federally insured financial institution acting | ||
as an escrow agent. The escrow agent may deliver the waiver and | ||
release only after the claimant has confirmed receipt of payment in | ||
good and sufficient funds. | ||
SECTION 41. Section 53.284, Property Code, is amended by | ||
amending Subsections (b), (c), (d), and (e) and adding Subsection | ||
(f) to read as follows: | ||
(b) If a claimant or potential claimant is required to | ||
execute a waiver and release in exchange for or to induce the | ||
payment of a progress payment and is not paid in exchange for the | ||
waiver and release or if a single payee check or joint payee check | ||
is given in exchange for the waiver and release, the waiver and | ||
release must read: | ||
"CONDITIONAL WAIVER AND RELEASE ON PROGRESS PAYMENT | ||
"Project ___________________ | ||
"Job No. ___________________ | ||
"On receipt by the signer of this document of a check from | ||
________________ (maker of check) in the sum of $__________ payable | ||
to _____________________ (payee or payees of check) and when the | ||
check has been properly endorsed and has been paid by the bank on | ||
which it is drawn, this document becomes effective to release any | ||
mechanic's lien right, any right arising from a payment bond that | ||
complies with a state or federal statute, any common law payment | ||
bond right, any claim for payment, and any rights under any similar | ||
ordinance, rule, or statute related to claim or payment rights for | ||
persons in the signer's position that the signer has on the property | ||
of ________________ (owner) located at ______________________ | ||
(location) for [ |
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______________________ (project [ |
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"This release covers a progress payment for all labor, | ||
services, equipment, or materials furnished to the property or to | ||
__________________ (person with whom signer contracted) as | ||
indicated in the attached statement(s) or progress payment | ||
request(s), except for unpaid retention or [ |
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modifications and changes [ |
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"Before any recipient of this document relies on this | ||
document, the recipient should verify evidence of payment to the | ||
signer. | ||
"The signer warrants that the signer has already paid or will | ||
use the funds received from this progress payment to promptly pay in | ||
full all of the signer's laborers, subcontractors, materialmen, and | ||
suppliers for all work, materials, equipment, or services provided | ||
for or to the above referenced project in regard to the attached | ||
statement(s) or progress payment request(s). | ||
"Date ____________________________ | ||
"_________________________________ (Company name) | ||
"By ______________________________ (Signature) | ||
"_________________________________ (Title) | ||
"(Insert acknowledgment)" | ||
(c) If a claimant or potential claimant is required to | ||
execute an unconditional waiver and release to prove the receipt of | ||
good and sufficient funds for a progress payment and the claimant or | ||
potential claimant asserts in the waiver and release that the | ||
claimant or potential claimant has been paid the progress payment, | ||
the waiver and release must: | ||
(1) contain a notice at the top of the document, | ||
printed in bold type at least as large as the largest type used in | ||
the document, but not smaller than 10-point type, that reads: | ||
"NOTICE: | ||
"This document waives rights unconditionally and states that | ||
you have been paid for giving up those rights. It is prohibited for | ||
a person to require you to sign this document if you have not been | ||
paid the payment amount set forth below. If you have not been paid, | ||
use a conditional release form."; and | ||
(2) below the notice, read: | ||
"UNCONDITIONAL WAIVER AND RELEASE ON PROGRESS PAYMENT | ||
"Project ___________________ | ||
"Job No. ___________________ | ||
"The signer of this document has been paid and has received a | ||
progress payment in the sum of $___________ for all labor, | ||
services, equipment, or materials furnished to the property or to | ||
_____________________ (person with whom signer contracted) on the | ||
property of _______________________ (owner) located at | ||
______________________ (location) for [ |
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signer therefore waives and releases any mechanic's lien right, any | ||
right arising from a payment bond that complies with a state or | ||
federal statute, any common law payment bond right, any claim for | ||
payment, and any rights under any similar ordinance, rule, or | ||
statute related to claim or payment rights for persons in the | ||
signer's position that the signer has on the above referenced | ||
project to the following extent: | ||
"This release covers a progress payment for all labor, | ||
services, equipment, or materials furnished to the property or to | ||
__________________ (person with whom signer contracted) as | ||
indicated in the attached statement(s) or progress payment | ||
request(s), except for unpaid retention or [ |
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modifications and changes [ |
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"The signer warrants that the signer has already paid or will | ||
use the funds received from this progress payment to promptly pay in | ||
full all of the signer's laborers, subcontractors, materialmen, and | ||
suppliers for all work, materials, equipment, or services provided | ||
for or to the above referenced project in regard to the attached | ||
statement(s) or progress payment request(s). | ||
"Date ____________________________ | ||
"_________________________________ (Company name) | ||
"By ______________________________ (Signature) | ||
"_________________________________ (Title) | ||
"(Insert acknowledgment)" | ||
(d) If a claimant or potential claimant is required to | ||
execute a waiver and release in exchange for or to induce the | ||
payment of a final payment and is not paid in good and sufficient | ||
funds in exchange for the waiver and release or if a single payee | ||
check or joint payee check is given in exchange for the waiver and | ||
release, the waiver and release must read: | ||
"CONDITIONAL WAIVER AND RELEASE ON FINAL PAYMENT | ||
"Project ___________________ | ||
"Job No. ___________________ | ||
"On receipt by the signer of this document of a check from | ||
________________ (maker of check) in the sum of $____________ | ||
payable to _____________________ (payee or payees of check) and | ||
when the check has been properly endorsed and has been paid by the | ||
bank on which it is drawn, this document becomes effective to | ||
release any mechanic's lien right, any right arising from a payment | ||
bond that complies with a state or federal statute, any common law | ||
payment bond right, any claim for payment, and any rights under any | ||
similar ordinance, rule, or statute related to claim or payment | ||
rights for persons in the signer's position that the signer has on | ||
the property of _____________________ (owner) located at | ||
______________________ (location) for [ |
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"This release covers the final payment to the signer for all | ||
labor, services, equipment, or materials furnished to the property | ||
or to __________________ (person with whom signer contracted). | ||
"Before any recipient of this document relies on this | ||
document, the recipient should verify evidence of payment to the | ||
signer. | ||
"The signer warrants that the signer has already paid or will | ||
use the funds received from this final payment to promptly pay in | ||
full all of the signer's laborers, subcontractors, materialmen, and | ||
suppliers for all work, materials, equipment, or services provided | ||
for or to the above referenced project up to the date of this waiver | ||
and release. | ||
"Date ____________________________ | ||
"_________________________________ (Company name) | ||
"By ______________________________ (Signature) | ||
"_________________________________ (Title) | ||
"(Insert acknowledgment)" | ||
(e) If a claimant or potential claimant is required to | ||
execute an unconditional waiver and release to prove the receipt of | ||
good and sufficient funds for a final payment and the claimant or | ||
potential claimant asserts in the waiver and release that the | ||
claimant or potential claimant has been paid the final payment, the | ||
waiver and release must: | ||
(1) contain a notice at the top of the document, | ||
printed in bold type at least as large as the largest type used in | ||
the document, but not smaller than 10-point type, that reads: | ||
"NOTICE: | ||
"This document waives rights unconditionally and states that | ||
you have been paid for giving up those rights. It is prohibited for | ||
a person to require you to sign this document if you have not been | ||
paid the payment amount set forth below. If you have not been paid, | ||
use a conditional release form."; and | ||
(2) below the notice, read: | ||
"UNCONDITIONAL WAIVER AND RELEASE ON FINAL PAYMENT | ||
"Project ___________________ | ||
"Job No. ___________________ | ||
"The signer of this document has been paid in full for all | ||
labor, services, equipment, or materials furnished to the property | ||
or to ___________________ (person with whom signer contracted) on | ||
the property of ______________________ (owner) located at | ||
______________________ (location) for [ |
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signer therefore waives and releases any mechanic's lien right, any | ||
right arising from a payment bond that complies with a state or | ||
federal statute, any common law payment bond right, any claim for | ||
payment, and any rights under any similar ordinance, rule, or | ||
statute related to claim or payment rights for persons in the | ||
signer's position. | ||
"The signer warrants that the signer has already paid or will | ||
use the funds received from this final payment to promptly pay in | ||
full all of the signer's laborers, subcontractors, materialmen, and | ||
suppliers for all work, materials, equipment, or services provided | ||
for or to the above referenced project up to the date of this waiver | ||
and release. | ||
"Date ____________________________ | ||
"_________________________________ (Company name) | ||
"By ______________________________ (Signature) | ||
"_________________________________ (Title) | ||
"(Insert acknowledgment)" | ||
(f) If the owner has filed and posted a notice of | ||
commencement under Section 53.125, the owner may require, as a | ||
condition for final payment, a claimant who has provided a notice of | ||
furnishing to post on the lien website a conditional waiver and | ||
release on final payment described by Subsection (d). | ||
SECTION 42. The following provisions of the Property Code | ||
are repealed: | ||
(1) Section 53.001(11); | ||
(2) Section 53.022(b); | ||
(3) Section 53.025; | ||
(4) Section 53.053; | ||
(5) Section 53.056; | ||
(6) Section 53.057; | ||
(7) Section 53.058; | ||
(8) Section 53.083; | ||
(9) Section 53.084; | ||
(10) Subchapter E, Chapter 53; | ||
(11) Section 53.206(c); | ||
(12) Section 53.252; | ||
(13) Section 53.253; and | ||
(14) Section 53.254(g). | ||
SECTION 43. 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 44. This Act takes effect May 1, 2018. |