On June 15, 2021, Gov. Greg Abbott signed into law House Bill 2237, introducing major changes to Chapter 53 of the Texas Property Code 1. These changes, which took effect on January 1, 2022, reflect new rules and regulations surrounding the filing of a Texas mechanics lien and all steps that come with it, including notice requirements and deadlines.
When payment disputes arise, filing a mechanics lien significantly increases your chances of getting paid. A mechanics lien warns potential buyers and financiers about outstanding debts related to a property, so most property owners would choose to settle a dispute and release the payment just to get rid of a mechanics lien.
Filing a mechanics lien is, therefore, the most effective way to recover payments from delinquent clients. However, you must follow strict rules in order to have a valid and enforceable mechanics lien. This guide details all the steps in filing a valid Affidavit of Lien in Texas, specifically for general contractors working on non-residential projects.
Preliminary notice requirements for non-residential general contractors in Texas
There are no preliminary notice requirements for general contractors on non-residential projects. Unlike other parties, you are not required to serve monthly notices while working on the improvement or construction of a non-residential property.
How to file a Texas Affidavit of Lien for non-residential general contractors
1. Prepare the Affidavit of Lien form
There is no statutorily prescribed form for the Texas Affidavit of Lien. However, make sure that your Affidavit of Lien form includes the following information:
a. A sworn statement of the amount claim
Ensure that this amount does not include any lien-related costs, attorney fees, and other spare expenses. It is very important that you only include the unpaid costs related to the services that you perform on a project.
b. The name and address of the property owner
These are the name and known address of the property owner(s).
c. The name and address of the general contractor
These are the name and address of the party who hired you, if different from the general contractor.
d. A description of the property location sufficient for identification
This description must be enough to identify a property location, so a physical street address or a legal property description should work.
e. A general declaration of the materials furnished or labor performed
This is the description of the services that you provided to a project. It is best practice to provide an itemized breakdown of your services per month.
The Texas Affidavit of Lien must be notarized prior to filing. You must sign your Affidavit of Lien while in the presence of an authorized notary officer.
2. Record the Affidavit of Lien in the county clerk’s office
When the Affidavit of Lien form is ready for filing, you can either visit the local county clerk’s office and have the mechanics lien filed in person, or mail the form to the clerk’s office. If you are mailing your Affidavit of Lien, you must include the filing fees in the mail. You can call the county clerk’s office to know the exact cost of filing a Texas Affidavit of Lien in your area.
You can make your claim stronger by attaching a copy of your written contract to the Affidavit of Lien form. By attaching a copy of the contract, you are able to inform potential buyers and financiers that your Affidavit of Lien is based on a contract that you agreed upon with the general contractor.
The deadline for recording an Affidavit of Lien for non-residential general contractors is the 15th day of the 4th month after your last day of work.
Make sure that you record your mechanics lien within the appropriate deadline. When the deadline has passed, your Texas Affidavit of Lien is no longer valid, and it will hold no power over the property.
3. Serve a copy of the Affidavit of Lien on the property owner
After filing the Texas Affidavit of Lien, you then have to serve a copy of the mechanics lien on the property owner within 5 days of the date it was filed. Failing to complete this step could invalidate your Affidavit of Lien, so make sure that you fulfill this requirement before the deadline.
Serving a copy of the Affidavit of Lien on the property owner is not only a state requirement, but it is also a way to notify the property owner that a mechanics lien has been recorded on their property. This step could prompt them to take action and settle the outstanding debt right away.
It is best practice to serve the copy of the Affidavit of Lien on the property owner on the same day that the Affidavit of Lien is filed. You can serve a copy of the Affidavit of Lien by certified mail with return receipt requested. And effective January 1, 2022, written notices may be served via “any other form of traceable, private delivery or mailing service that can confirm proof of receipt.”2
4. Release/enforce the Affidavit of Lien
There are two things that can happen after filing an Affidavit of Lien: either you get paid or you don’t.
If you get paid, the party who paid you will most likely ask you to cancel or release the Affidavit of Lien. Releasing the Affidavit of lien informs potential buyers and financiers of the property that the outstanding debt has been settled and the mechanics lien is no longer enforceable.
When you receive a request from an interested party to release a mechanics lien, you have 10 days to release the Affidavit of Lien, granted that the payment is already on hand. To release an Affidavit of Lien, you have to file a lien release in the same county clerk office where the original Affidavit of Lien was filed. Remember that you have 10 days upon receiving a request to cancel a mechanics lien. Otherwise, you might have to pay fines and penalties.
If, on the other hand, you don’t get paid, you can then enforce your Affidavit of Lien by initiating a foreclosure lawsuit. Winning the lawsuit allows you to recover payment from the foreclosure auction of the property.
General contractors for non-residential projects must enforce their Affidavit of Lien by either of the following deadlines, whichever is later:
- Within 2 years of filing the Affidavit of Lien
- Within 1 year of the termination or completion of the project
When the deadline passes, you are no longer allowed to enforce an Affidavit of Lien. You will likely lose a foreclosure lawsuit if you try to enforce a mechanics lien when it has already expired.
Important deadlines to remember when filing a Texas Affidavit of Lien for non-residential general contractors
Best practices when filing a Texas Affidavit of Lien for non-residential general contractors
1. Attach a copy of the written contract to your Affidavit of Lien
When you file your Affidavit of Lien form, you can also attach to it a copy of the written contract. A properly prepared contract includes payment expectations and a schedule, so it is one way to prove that your mechanics lien claim is reasonable and based on a prior agreement that your client did not honor.
2. Prepare a monthly breakdown of the services you furnished to the project
If you furnished different types of materials and services to the project, it is best to break them down in a monthly schedule based on when they were provided. When you properly organize your mechanics lien claim, it is easily understood by all parties involved and will clear out any potential miscommunication between you and the client.
3. Serve a copy of the Affidavit of Lien on the property owner on the day of filing
When you file a Texas Affidavit of Lien, be sure to also serve a copy of it on the property owner on the same date. Remember that serving a property owner a copy of the mechanics lien is a legal requirement, and you must do it within 5 days of the recordation date. Instead of waiting 5 days, make sure that you complete this step on the day that you record the mechanics lien.
Further reading
- Property code Chapter 53. Mechanic’s, contractor’s, or materialman’s lien. (n.d.). Texas Constitution and Statutes. https://statutes.capitol.texas.gov/Docs/PR/htm/PR.53.htm
- Property code Chapter 53. Mechanic’s, contractor’s, or materialman’s lien. (n.d.). Texas Constitution and Statutes. https://statutes.capitol.texas.gov/Docs/PR/htm/PR.53.htm