82R17798 PMO-F
By: Deshotel, Bohac H.B. No. 1390
Substitute the following for H.B. No. 1390:
By: Quintanilla C.S.H.B. No. 1390
A BILL TO BE ENTITLED
AN ACT
relating to retainage under certain construction contracts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 53.053(e), Property Code, is amended to
read as follows:
(e) A claim for retainage accrues on the last day of the
month in which all work called for by the contract between the owner
and the original contractor has been completed, finally settled,
terminated, or abandoned.
SECTION 2. Section 53.056(d), Property Code, is amended to
read as follows:
(d) Except as provided by Section 53.057, to [To] authorize
the owner to withhold funds under Subchapter D, the notice to the
owner must state that if the claim remains unpaid, the owner may be
personally liable and the owner's property may be subjected to a
lien unless:
(1) the owner withholds payments from the contractor
for payment of the claim; or
(2) the claim is otherwise paid or settled.
SECTION 3. Section 53.057, Property Code, is amended to
read as follows:
Sec. 53.057. DERIVATIVE CLAIMANT: NOTICE FOR [CONTRACTUAL]
RETAINAGE CLAIM. (a) For the portion of a retainage claim not in
excess of the amount of the required retainage under Section
53.101, a [A] claimant may give notice under this section instead of
or in addition to notice under Section 53.056 or 53.252 if the
claimant is to labor, furnish labor or materials, or specially
fabricate materials, or has labored, furnished labor or materials,
or specially fabricated materials, under an agreement with an
original contractor or a subcontractor providing for retainage.
(b) The claimant must give notice that the claimant may have
a lien claim for retainage to the owner or reputed owner [notice of
the retainage agreement] not later than the earliest of:
(1) the 15th day of the second month following the date
the claimant completed the work required under the claimant's
contract with the original contractor or subcontractor;
(2) the 25th day after the date the work under the
original contract is completed, provided that the owner, if
required, gave notice under Section 53.106 or 53.108 to the
claimant;
(3) the 25th day after the date the original contract
is terminated, provided that the owner, if required, gave notice
under Section 53.107 to the claimant; or
(4) the 25th day after the date the original
contractor abandons performance under the original contract,
provided that the owner, if required, gave notice under Section
53.107 to the claimant [the delivery of materials or the
performance of labor by the claimant that first occurs after the
claimant has agreed to the contractual retainage. If the agreement
is with a subcontractor, the claimant must also give notice within
that time to the original contractor].
(c) [The notice must contain:
[(1) the sum to be retained;
[(2) the due date or dates, if known; and
[(3) a general indication of the nature of the
agreement.
[(d)] The notice must be sent by registered or certified
mail to the last known business or residence address of the owner or
reputed owner or the original contractor, as applicable.
(d) [(e)] If a claimant gives notice under this section [and
Section 53.055 or, if the claim relates to a residential
construction project, under this section and Section 53.252], the
claimant is not required to give any other notice as to the
retainage before the date the notice under Section 53.055 is
required.
SECTION 4. Section 53.081(c), Property Code, is amended to
read as follows:
(c) If notice is sent under Section 53.057, the owner may
withhold funds immediately on receipt of the notice. The owner may
withhold funds by retaining funds under Subchapter E for the period
required by Section 53.082 [a copy of the claimant's affidavit
prepared in accordance with Sections 53.052 through 53.055].
SECTION 5. Section 53.103, Property Code, is amended to
read as follows:
Sec. 53.103. LIEN ON RETAINED FUNDS. A claimant has a lien
on the retained funds if the claimant:
(1) sends the notices required by this chapter in the
time and manner required; and
(2) files an affidavit claiming a lien not later than
the [30th day after the] earlier of [the date]:
(A) the 60th day after the earliest of:
(i) the date the work under the original
contract is completed, provided that the owner, if required, gave
notice under Section 53.106 or 53.108 to the claimant;
(ii) the date the original contract is
terminated, provided that the owner, if required, gave notice under
Section 53.107 to the claimant; or
(iii) the date the original contractor
abandons performance under the original contract, provided that the
owner, if required, gave notice under Section 53.107 to the
claimant; or
(B) the last day of the period provided under
Section 53.052 [work is completed;
[(B) the original contract is terminated; or
[(C) the original contractor abandons
performance under the original contract].
SECTION 6. Section 53.106, Property Code, is amended to
read as follows:
Sec. 53.106. AFFIDAVIT OF COMPLETION. (a) An owner may
file with the county clerk of the county in which the property is
located an affidavit of completion. The affidavit must contain:
(1) the name and address of the owner;
(2) the name and address of the original contractor;
(3) a description, legally sufficient for
identification, of the real property on which the improvements are
located;
(4) a description of the improvements furnished under
the original contract;
(5) a statement that the improvements under the
original contract have been completed and the date of completion;
and
(6) a conspicuous statement that a claimant may not
have a lien on retained funds unless the claimant:
(A) complies with the notice requirement under
Section 53.057 not later than the earlier of:
(i) the 15th day of the second month
following the date the claimant completed the work required under
the claimant's contract with the original contractor or
subcontractor; or
(ii) the 25th day after the date the work
under the original contract is completed; and
(B) files an [the] affidavit claiming a lien not
later than the 60th [30th] day after the date the work under the
original contract is completed [of completion].
(b) A copy of the affidavit must be sent by certified or
registered mail to the original contractor not later than the date
the affidavit is filed and to each claimant who sends a notice of
lien liability to the owner under Section 53.056, 53.057, 53.058,
53.252, or 53.253 not later than the date the affidavit is filed or
the fifth [10th] day after the date the owner receives the notice of
lien liability, whichever is later.
(c) A copy of the affidavit must also be sent to each person
who furnishes labor or materials for the property and who furnishes
the owner with a written request for the copy. The owner must
furnish the copy to the person not later than the date the affidavit
is filed or the fifth [10th] day after the date the request is
received, whichever is later.
(d) Except as provided by this subsection, an affidavit
filed under this section on or before the fifth [10th] day after the
date of completion of the improvements is prima facie evidence of
the date the work under the original contract is completed for
purposes of this subchapter and Section 53.057. If the affidavit is
filed after the fifth [10th] day after the date of completion, the
date of completion for purposes of this subchapter and Section
53.057 is the date the affidavit is filed. This subsection does not
apply to a person to whom the affidavit was not sent as required by
this section.
SECTION 7. Sections 53.107(a), (b), (c), and (d), Property
Code, are amended to read as follows:
(a) Not later than the fifth [10th] day after the date an
original contract is terminated or the original contractor abandons
performance under the original contract, the owner shall give
notice to each subcontractor who, before the date of termination or
abandonment, has:
(1) given notice to the owner as provided by Section
53.056, 53.057, or 53.058; or
(2) sent to the owner by certified or registered mail a
written request for notice of termination or abandonment.
(b) The notice must contain:
(1) the name and address of the owner;
(2) the name and address of the original contractor;
(3) a description, legally sufficient for
identification, of the real property on which the improvements are
located;
(4) a general description of the improvements agreed
to be furnished under the original contract;
(5) a statement that the original contract has been
terminated or that performance under the contract has been
abandoned;
(6) the date of the termination or abandonment; and
(7) a conspicuous statement that a claimant may not
have a lien on the retained funds unless the claimant:
(A) complies with the notice requirement in
Section 53.057 not later than the earlier of:
(i) the 15th day of the second month
following the date the claimant completed the work required under
the claimant's contract with the original contractor or
subcontractor; or
(ii) the 25th day after the date the
original contract is terminated or abandoned; and
(B) files an affidavit claiming a lien not later
than the 60th [30th] day after the date of the termination or
abandonment.
(c) A notice sent in compliance with this section on or
before the fifth [10th] day after the date of termination or
abandonment is prima facie evidence of the date the original
contract was terminated or work was abandoned for purposes of this
subchapter.
(d) A subcontractor to whom an owner fails to send notice
under this section is not required to comply with Section 53.057 to
claim retainage and may claim a lien by filing a lien affidavit as
prescribed by Section 53.052 [who fails to file a lien affidavit in
the time prescribed by Section 53.103(2) has a lien to the extent
authorized under this subchapter if:
[(1) the subcontractor otherwise complies with this
chapter; and
[(2) the owner did not provide the subcontractor
notice as required by this section].
SECTION 8. Subchapter E, Chapter 53, Property Code, is
amended by adding Section 53.108 to read as follows:
Sec. 53.108. NOTICE OF COMPLETION TO SECURE RETAINAGE
CLAIM. (a) Not later than the fifth day after the date of
completion, an owner shall send by certified mail, return receipt
requested, or registered mail a notice of completion to:
(1) the original contractor;
(2) any person who provides a notice under Section
53.056, 53.057, 53.058, 53.252, or 53.253; and
(3) any person who furnished labor or provided
materials for the improvement and requests a copy of the notice of
completion.
(b) The notice must contain:
(1) the name and address of the owner;
(2) the name and address of the original contractor;
(3) a description, legally sufficient for
identification, of the real property on which the improvements are
located;
(4) a description of the improvements furnished under
the original contract;
(5) a statement that the improvements under the
original contract have been completed; and
(6) the date of completion.
(c) A notice sent in compliance with this section is prima
facie evidence under Sections 53.053(e) and 53.057 of the date the
work under the original contract was completed.
(d) An owner who sends a copy of an affidavit of completion
as prescribed by Section 53.106 satisfies the requirements of this
section.
(e) A person described by Subsection (a) to whom an owner
fails to send notice under this section is not required to comply
with Section 53.057 to claim contractual retainage and may claim a
lien by filing a lien affidavit as prescribed by Section 53.052.
SECTION 9. Sections 53.159(a), (b), and (e), Property Code,
are amended to read as follows:
(a) An owner, on written request, 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; [and]
(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) An original contractor, on 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; [and]
(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.
(e) If a person from whom information is requested does not
have a direct contractual relationship on the project with the
person requesting the information, the person from whom information
is requested, other than a claimant requested to furnish
information under Subsection (d), may require payment of the actual
costs, not to exceed $25, in furnishing the requested information.
A subcontractor who does not receive information requested under
Subsection (a)(4) within the period prescribed by Subsection (a) is
not required to comply with Section 53.057 and may perfect a lien
for retainage by filing a lien affidavit under Section 53.052.
SECTION 10. Section 53.160(b), Property Code, is amended to
read as follows:
(b) The grounds for objecting to the validity or
enforceability of the claim or lien for purposes of the motion are
limited to the following:
(1) notice of claim was not furnished to the owner or
original contractor as required by Section 53.056, 53.057, 53.058,
53.252, or 53.253;
(2) an affidavit claiming a lien failed to comply with
Section 53.054 or was not filed as required by Section 53.052;
(3) notice of the filed affidavit was not furnished to
the owner or original contractor as required by Section 53.055;
(4) the deadlines for perfecting a lien claim for
retainage under this chapter have expired and the owner complied
with the requirements of Section 53.101 and paid the retainage and
all other funds owed to the original contractor before:
(A) the claimant perfected the lien claim; and
(B) the owner received a notice of the claim as
required by this chapter;
(5) all funds subject to the notice of a claim to the
owner and a notice regarding the [perfection of a claim against the
statutory] retainage have been deposited in the registry of the
court and the owner has no additional liability to the claimant;
(6) when the lien affidavit was filed on homestead
property:
(A) no contract was executed or filed as required
by Section 53.254;
(B) the affidavit claiming a lien failed to
contain the notice as required by Section 53.254; or
(C) the notice of the claim failed to include the
statement required by Section 53.254; and
(7) the claimant executed a valid and enforceable
waiver or release of the claim or lien claimed in the affidavit.
SECTION 11. Chapter 53, Property Code, as amended by this
Act, applies only to a lien claim for labor or materials furnished
under a subcontract where the original contract was entered into on
or after the effective date of this Act. A lien claim for labor or
materials furnished under a subcontract where the original contract
was entered into before the effective date of this Act is governed
by the law in effect immediately before the effective date of this
Act, and that law is continued in effect for that purpose.
SECTION 12. This Act takes effect September 1, 2011.