Materialman’s Liens: A Primer

If you are a licensed general contractor, plumber, roofer, electrician, painter, framer, mechanic, artisan, or other form of materialman providing services and labor to construct or repair residential or commercial buildings in Texas, then you have likely run into a circumstance where you have disagreed with the building owner or general contractor as to the work performed, the amount owed, or both. In the event that you have provided labor to construct or repair a commercial or residential property, you are entitled to claim a lien on that property in the amount of the services performed by recording a lien affidavit with the real property records of the county in Texas in which the property you worked on is located. There are both constitutional and statutory protections available to you, but asserting these protections involve strict timelines and specific language to properly perfect the lien. Because of the technical nature of the protections, best practices are to seek professional assistance once you realize that you have not been paid or may not be paid.

Article XVI, Section 37 of the Texas Constitution provides that “Mechanics, artisans and material men, of every class, shall have a lien upon the buildings and articles made or repaired by them for the value of their labor done thereon, or material furnished therefor; and the Legislature shall provide by law for the speedy and efficient enforcement of said liens.” Chapter 53 of the Texas Property Code provides the procedural steps necessary to perfect your lien.

You are an “original contractor” if you are the person who has contracted directly with a property owner or the property owner’s agent.Tex. Prop. Code §53.001(7) You are a “subcontractor” or “derivative claimant” if you are a person who has furnished labor or materials to fulfill an obligation to an original contractor or to a subcontractor to perform all or part of the work required by an original contract.Tex. Prop. Code §53.001(13)

Notice Prior to Recording the Lien Affidavit

All roads to perfection of a lien involve providing written notice via certified mail at varying intervals.

For Retained Funds:

If you are party to a contract with an original contractor or subcontractor involving retainage, you must give notice of your right to retainage to all parties in the contractual chain and the property owner no later than the earlier of (1) the 30th day after the date the agreement providing for retainage is completed, terminated, or abandoned; or (2) the 30th day after the date the original contract is terminated or abandoned.Tex. Prop. Code §53.057(b) If this retainage notice is not required to perfect a lien against the property on which you performed services but it is required to obtain a lien on retained funds.

For Specially Fabricated Materials:

If you have provided specially fabricated materials for a project, you may perfect a lien against those materials.  Materials are “specially fabricated” if they are fabricated for use as a component of the construction or repair so as to be reasonably unsuitable for use elsewhere.Tex. Prop. Code §53.001(12) For example, if you have crafted a marble counter-top for a custom kitchen, you may perfect a lien on the counter-top.

If the specially fabricated materials have not been delivered or incorporated into the property, you must provide notice of your claim to the property owner no later than the 15th day of the second month after you received and accepted the order for the material. If you are a subcontractor, you must also provide this notice to the original contractor.

If the specially fabricated materials have been delivered to the property, you must provide notice of your claim to the property owner no later than the 15th day of the second month after the specially fabricated materials were delivered.Tex. Prop. Code §53.253

Second and Third Month Notices

In order to obtain a valid lien for parties who are not the original contractor, you must provide notice of the unpaid claim to the original contractor not later than the 15th day of the second month following each month in which all or part of the labor was performed.Tex. Prop. Code §53.056 The same notice must be provided to the property owner not later than the 15th day of the third month following each month in which all or part of the labor was performed. The notice to the owner must contain statutorily provided “fund-trapping” language to be valid and authorize the property owner to withhold payments from the original contractor. It is important to note that the deadline continues to run monthly as work is completed and failure to be aware of the date on which work is completed may lead to a lien being valid for only part of the work performed. The best practice is to immediately take steps to protect your interest if you have not been paid for work performed within 15-days of performing the work. It is easy to remove a lien once you have been paid. If you lose the protection for failure to properly perfect the lien, the protection is gone.

Recording the Lien Affidavit

For original contractors and subcontractors who have provided the properly prescribed notices, a lien must be recorded with the real property records of the county in which the property is located. The contents of affidavit must substantially comply with the Texas Property Code and the affidavit must be recorded:

  • No later than the 4th month following written termination, abandonment, settlement, or completion of the contract for commercial projects;Tex. Prop. Code §53.052
  • No later than the 3rd month following written termination, abandonment, settlement, or completion of the contract for residential projects;Tex. Prop. Code §53.052
  • Within 30 days of completion of work if you are a subcontractor wanting the lien to attach to retained funds;Tex. Prop. Code §53.101
  • For specially fabricated materials: No later than the 15th day of the 4th month following:
    1. On the last day of the last month in which materials were delivered,
    2. On the last day of the last month in which delivery of the last of the material would normally have been required at the job site, or

On the last day of the last month of any material breach or termination of the original contract by the owner or original contractor or of the subcontract under which the specially fabricated material was furnished.Tex. Prop. Code §§53.052 & 53.053

Notice After the Lien is Recorded

The final step to perfect a lien is to provide written notice of the recording of the lien to the property owner and original contractor not later than the 5th day after the date the affidavit is filed with the county clerk.Tex. Prop. Code §53.055 Failure to provide this notice will render a lien invalid.

Once the Lien is Perfected

Often times a properly perfected lien will prompt an original contractor or property owner to negotiate payment of the amount owed. If, however, you are unable to reach resolution, you are able to foreclose on your perfected lien by court order. This means that you will need to file a lawsuit to foreclose on the lien within four years of the accrual of the claim and succeed on the merits of your claim.

Because of the many complications involved with perfecting and foreclosing on a lien, it is not advisable to seek this protection without assistance. While, as a general matter, mechanic’s and materialman’s lien statutes are liberally construed for the purpose of protecting laborers and materialmen, failure to timely provide notices or properly execute a lien affidavit do not leave the court in a position where it can consider compliance “substantial”.First Nat’l Bank in Dallas v. Whirlpool Corp., 517 S.W.2d 262, 269 (Tex.1974)

Endnotes