By: Deshotel, Bohac 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 earliest of 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 53.057, Property Code, is amended by
amending Subsections (a), (b), (c), and (d) and adding Subsections
(b-1), (f), and (g) to read as follows:
(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 the owner or reputed owner notice
of contractual [the] retainage [agreement] not later than the
earlier of:
(1) the 30th [15th] day after the date the claimant's
agreement providing for retainage is completed, terminated, or
abandoned; or
(2) the 30th day after the date the original contract
is terminated or abandoned [of the second month following the
delivery of materials or the performance of labor by the claimant
that first occurs after the claimant has agreed to the contractual
retainage].
(b-1) If an [the] agreement for contractual retainage is
with a subcontractor, the claimant must also give the notice of
contractual retainage [within that time] to the original contractor
within the period prescribed by Subsection (b).
(c) The notice must generally state the existence of a
requirement for retainage and contain:
(1) the name and address of the claimant; and
(2) if the agreement is with a subcontractor, the name
and address of the subcontractor [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.
(f) A claimant has a lien on, and the owner is personally
liable to the claimant for, the retained funds under Subchapter E if
the claimant:
(1) gives notice in accordance with this section and:
(A) complies with Subchapter E; or
(B) files an affidavit claiming a lien not later
than the earliest of:
(i) the date required for filing an
affidavit under Section 53.052;
(ii) the 40th day after the date stated in
an affidavit of completion as the date of completion of the work
under the original contract, if the owner sent the claimant notice
of an affidavit of completion in the time and manner required;
(iii) the 40th day after the date of
termination or abandonment of the original contract, if the owner
sent the claimant a notice of such termination or abandonment in the
time and manner required; or
(iv) the 30th day after the date the owner
sent to the claimant to the claimant's address provided in the
notice for contractual retainage, as required under Subsection (c),
a written notice of demand for the claimant to file the affidavit
claiming a lien; and
(2) gives the notice of the filed affidavit as
required by Section 53.055.
(g) The written demand under Subsection (f)(1)(B)(iv):
(1) must contain the owner's name and address and a
description, legally sufficient for identification, of the real
property on which the improvement is located;
(2) must state that the claimant must file the lien
affidavit not later than the 30th day after the date the demand is
sent; and
(3) is effective only for the amount of contractual
retainage earned by the claimant as of the day the demand was sent.
SECTION 3. 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) except as allowed by Section 53.057(f), files an
affidavit claiming a lien not later than the 30th day after the
earliest [earlier] of the date:
(A) the work is completed;
(B) the original contract is terminated; or
(C) the original contractor abandons performance
under the original contract.
SECTION 4. Section 53.105(a), Property Code, is amended to
read as follows:
(a) If the owner fails or refuses to comply with this
subchapter, the claimants complying with Subchapter C or this
subchapter [chapter] have a lien, at least to the extent of the
amount that should have been retained from the original contract
under which they are claiming, against the house, building,
structure, fixture, or improvement and all of its properties and
against the lot or lots of land necessarily connected.
SECTION 5. Sections 53.106(a) and (d), Property Code, are
amended to read as follows:
(a) An owner may file with the county clerk of the county in
which the property is located an affidavit of completion. The
affidavit must contain:
(1) the name and address of the owner;
(2) the name and address of the original contractor;
(3) a description, legally sufficient for
identification, of the real property on which the improvements are
located;
(4) a description of the improvements furnished under
the original contract;
(5) a statement that the improvements under the
original contract have been completed and the date of completion;
and
(6) a conspicuous statement that a claimant may not
have a lien on retained funds unless the claimant files an [the]
affidavit claiming a lien not later than the 40th [30th] day after
the date the work under the original contract is completed [of
completion].
(d) Except as provided by this subsection, an affidavit
filed under this section on or before the 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 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 6. Sections 53.107(b) and (d), Property Code, are
amended to read as follows:
(b) The notice must contain:
(1) the name and address of the owner;
(2) the name and address of the original contractor;
(3) a description, legally sufficient for
identification, of the real property on which the improvements are
located;
(4) a general description of the improvements agreed
to be furnished under the original contract;
(5) a statement that the original contract has been
terminated or that performance under the contract has been
abandoned;
(6) the date of the termination or abandonment; and
(7) a conspicuous statement that a claimant may not
have a lien on the retained funds unless the claimant files an
affidavit claiming a lien not later than the 40th [30th] day after
the date of the termination or abandonment.
(d) If an owner is required to send a notice to a [A]
subcontractor under this section and fails to send the notice, the
subcontractor 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 7. Section 53.159, Property Code, is amended by
amending Subsections (a) and (b) and adding Subsection (g) 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.
(g) 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. This subsection expires September 1, 2013.
SECTION 8. 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 9. 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 10. This Act takes effect September 1, 2011.