Texas 2019 - 86th Regular

Texas House Bill HB3498 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	86R8439 BEE-D
2	2	By: Burrows H.B. No. 3498
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to mechanic's, contractor's, or materialman's liens.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Sections 53.001(2), (3), (4), (11), (13), and
10	10	(14), Property Code, are amended to read as follows:
11	11	(2) "Improvement" includes:
12	12	(A) permanent buildings, structures, parking
13	13	structures, appurtenances, [abutting sidewalks and] streets,
14	14	sidewalks, [and] utilities, rails for a rail system, and other
15	15	similar fixtures on or to be placed on real property [in or on those
16	16	sidewalks and streets];
17	17	(B) clearing, grubbing, draining, or fencing of
18	18	land as part of a construction project;
19	19	(C) plants, landscaping, ponds, and storage
20	20	facilities provided in conjunction with a construction project
21	21	[wells, cisterns, tanks, reservoirs, or artificial lakes or pools
22	22	made for supplying or storing water]; and
23	23	(D) designs, drawings, plans, plats, surveys,
24	24	and specifications provided by licensed architects, engineers, or
25	25	surveyors [pumps, siphons, and windmills or other machinery or
26	26	apparatuses used for raising water for stock, domestic use, or
27	27	irrigation; and
28	28	[(E) planting orchard trees, grubbing out
29	29	orchards and replacing trees, and pruning of orchard trees].
30	30	(3) "Labor" means:
31	31	(A) labor used in the direct performance
32	32	[prosecution] of the construction of improvements; or
33	33	(B) professional services used in the direct
34	34	preparation of a design, drawing, plan, plat, survey, or
35	35	specification [work].
36	36	(4) "Material" means all or part of:
37	37	(A) the material, machinery, fixtures, or tools:
38	38	(i) incorporated into the work;
39	39	(ii) used[, consumed] in the direct
40	40	performance [prosecution] of the work;
41	41	(iii) specially fabricated and suitable
42	42	only for the work; [,] or
43	43	(iv) ordered and delivered for
44	44	incorporation or use in the work [consumption];
45	45	(B) rent at a reasonable rate and actual running
46	46	repairs at a reasonable cost for construction equipment used [or
47	47	reasonably required and delivered for use] in the direct
48	48	performance [prosecution] of the work at the site of the
49	49	construction or repair; or
50	50	(C) power, water, fuel, and lubricants used
51	51	[consumed or ordered and delivered for consumption] in the direct
52	52	performance [prosecution] of the work.
53	53	(11) "Retainage" means an amount representing part of
54	54	a contract payment that is not required to be paid to the claimant
55	55	within the month following the month in which labor is performed,
56	56	material is furnished, or specially fabricated material is
57	57	delivered. [The term does not include retainage under Subchapter
58	58	E.]
59	59	(13) "Subcontractor" means a person who has furnished
60	60	labor or materials to fulfill an obligation to an original
61	61	contractor or to a subcontractor to perform all or part of the work
62	62	required by an original contract. The term includes a supplier of
63	63	specially fabricated material or of equipment or materials
64	64	delivered directly to the construction site.
65	65	(14) "Work" means any part of construction or repair
66	66	of an improvement performed under an original contract.
67	67	SECTION 2. Sections 53.003(a) and (c), Property Code, are
68	68	amended to read as follows:
69	69	(a) This section applies to notices required by this chapter
70	70	[Subchapters B through G and K].
71	71	(c) If notice is sent by [registered or] certified mail,
72	72	deposit or mailing of the notice in the United States mail in the
73	73	form required constitutes compliance with the notice requirement.
74	74	This subsection does not apply if the law requires receipt of the
75	75	notice by the person to whom it is directed.
76	76	SECTION 3. Sections 53.021(a), (c), and (e), Property Code,
77	77	are amended to read as follows:
78	78	(a) A person can claim [has] a lien under this chapter if [:
79	79	[(1)] the person [labors, specially fabricates
80	80	material, or] furnishes labor or materials for construction or
81	81	repair [in this state] of an improvement [:
82	82	[(A) a house, building, or improvement;
83	83	[(B) a levee or embankment to be erected for the
84	84	reclamation of overflow land along a river or creek; or
85	85	[(C) a railroad; and
86	86	[(2) the person labors, specially fabricates the
87	87	material, or furnishes the labor or materials] under or by virtue of
88	88	a contract with the owner or the owner's agent, trustee, receiver,
89	89	contractor, or subcontractor.
90	90	(c) A licensed [An] architect, engineer, or surveyor
91	91	providing services to prepare a design, drawing, plan, plat,
92	92	survey, or specification [who prepares a plan or plat] under [or by
93	93	virtue of] a written contract can claim [with the owner or the
94	94	owner's agent, trustee, or receiver in connection with the actual
95	95	or proposed design, construction, or repair of improvements on real
96	96	property or the location of the boundaries of real property has] a
97	97	lien under this chapter [on the property].
98	98	(e) A person who performs labor as part of, or who furnishes
99	99	labor or materials for, the demolition of a structure on real
100	100	property under [or by virtue of] a written contract that is part of
101	101	a project for the construction of an improvement can claim [with the
102	102	owner of the property or the owner's agent, trustee, receiver,
103	103	contractor, or subcontractor has] a lien under this chapter [on the
104	104	property].
105	105	SECTION 4. Sections 53.022(a) and (d), Property Code, are
106	106	amended to read as follows:
107	107	(a) The lien extends to the owner's interests in the
108	108	improvements and to the particularly subdivided real property on
109	109	which work was performed [house, building, fixtures, or
110	110	improvements, the land reclaimed from overflow, or the railroad and
111	111	all of its properties, and to each lot of land necessarily connected
112	112	or reclaimed].
113	113	(d) A lien against land not subdivided in a city, town, or
114	114	village extends to not more than 50 acres on which the [house,
115	115	building, or] improvement is situated or on which the labor was
116	116	performed.
117	117	SECTION 5. Section 53.023, Property Code, is amended to
118	118	read as follows:
119	119	Sec. 53.023. PAYMENT SECURED BY LIEN. (a) The lien secures
120	120	payment for:
121	121	(1) the labor done or material furnished for the
122	122	construction, [or] repair, or demolition; or
123	123	(2) the specially fabricated material, even if the
124	124	material has not been delivered or incorporated into the
125	125	construction or repair, less its fair salvage value [; or
126	126	[(3) the preparation of a plan or plat by an architect,
127	127	engineer, or surveyor in accordance with Section 53.021(c)].
128	128	(b) Notwithstanding the foreclosure of a superior lien on
129	129	real property, a subcontractor that supplied removables for an
130	130	improvement and that secures a judgment validating the
131	131	subcontractor's debt and mechanic's lien may obtain an order
132	132	allowing the subcontractor to remove the amount of removables equal
133	133	to the amount of the perfected lien interest, based on the fair
134	134	market value of the removables.
135	135	SECTION 6. Section 53.026(a), Property Code, is amended to
136	136	read as follows:
137	137	(a) A person who [labors, specially fabricates materials,
138	138	or] furnishes labor or materials under a direct contractual
139	139	relationship with a purported original contractor may perfect
140	140	[another person is considered to be in direct contractual
141	141	relationship with the owner and has] a lien by following the
142	142	procedures to perfect a lien of [as] an original contractor. For
143	143	purposes of this subsection, a "purported original contractor" is a
144	144	contractor that [, if:
145	145	[(1)] the owner [contracted with the other person for
146	146	the construction or repair of a house, building, or improvements
147	147	and the owner] can effectively control or that can effectively
148	148	control the owner [that person] through common ownership, [of]
149	149	voting stock, interlocking directorships, common management, or
150	150	similar rights of control [otherwise;
151	151	[(2) the owner contracted with the other person for
152	152	the construction or repair of a house, building, or improvements
153	153	and that other person can effectively control the owner through
154	154	ownership of voting stock, interlocking directorships, or
155	155	otherwise; or
156	156	[(3) the owner contracted with the other person for
157	157	the construction or repair of a house, building, or improvements
158	158	and the contract was made without good faith intention of the
159	159	parties that the other person was to perform the contract].
160	160	SECTION 7. Section 53.052, Property Code, is amended to
161	161	read as follows:
162	162	Sec. 53.052. FILING OF AFFIDAVIT. (a) Except as provided by
163	163	Subsection (b), the person claiming the lien, other than a lien for
164	164	contractual retainage, must file an affidavit with the county clerk
165	165	[of the county in which the property is located or into which the
166	166	railroad extends] not later than the 15th day of the fourth calendar
167	167	month after the date the claimant:
168	168	(1) last provided labor or materials; or
169	169	(2) completed the fabrication of specially fabricated
170	170	materials that were not delivered to the project site [day on which
171	171	the indebtedness accrues].
172	172	(b) A person claiming a lien arising from a residential
173	173	construction project must file an affidavit with the county clerk
174	174	[of the county in which the property is located] not later than the
175	175	15th day of the third calendar month after the date the claimant
176	176	last provided labor or materials [day on which the indebtedness
177	177	accrues].
178	178	(c) Except as provided by Section 53.107(d), a person
179	179	claiming a lien for contractual retainage must file an affidavit
180	180	with the county clerk not later than the 15th day of the third
181	181	calendar month after the date the original contract under which the
182	182	person performed was completed, abandoned, or terminated.
183	183	(d) An affidavit under Subsection (c) must be filed in the
184	184	county where the improvements are located. The county clerk shall
185	185	record the affidavit in records kept for that purpose and shall
186	186	index and cross-index the affidavit in the names of the claimant,
187	187	the original contractor, and the owner. Failure of the county clerk
188	188	to properly record or index a filed affidavit does not invalidate
189	189	the lien.
190	190	SECTION 8. Section 53.055(a), Property Code, is amended to
191	191	read as follows:
192	192	(a) A person who files an affidavit must send a copy of the
193	193	affidavit by [registered or] certified mail to the owner or reputed
194	194	owner at the owner's last known business or residence address not
195	195	later than the fifth day after the date the affidavit is filed with
196	196	the county clerk.
197	197	SECTION 9. The heading to Section 53.056, Property Code, is
198	198	amended to read as follows:
199	199	Sec. 53.056. DERIVATIVE CLAIMANT: NOTICE TO OWNER AND [OR]
200	200	ORIGINAL CONTRACTOR.
201	201	SECTION 10. Section 53.056, Property Code, is amended by
202	202	amending Subsection (a) and adding Subsections (a-1) and (a-2) to
203	203	read as follows:
204	204	(a) A subcontractor [Except as provided by Subchapter K, a
205	205	claimant other than an original contractor] must give the notices
206	206	[notice] prescribed by this section and, if applicable, Section
207	207	53.057 for the lien to be valid.
208	208	(a-1) For all labor provided or materials provided or
209	209	specially fabricated during a month, the subcontractor must send a
210	210	notice of progress payment debt to the owner or reputed owner and
211	211	the original contractor by certified mail. The notice must be sent:
212	212	(1) for debt other than retainage debt, not later than
213	213	the 15th day of the third month after the date the labor was
214	214	provided or the materials were provided or specially fabricated; or
215	215	(2) for residential construction projects, not later
216	216	than the 15th day of the second month after the date the labor was
217	217	provided or the materials were provided or specially fabricated.
218	218	(a-2) The notice must read:
219	219	"NOTICE OF PROGRESS PAYMENT DEBT
220	220	"Date: __________________
221	221	"Subcontractor: __________________
222	222	"Original contractor: __________________
223	223	"Party contracting with subcontractor: __________________
224	224	"Months during which labor or materials were provided or
225	225	special fabrication was completed for which payment has not yet
226	226	been received: __________________
227	227	"Total debt to date, including retainage:
228	228	__________________
229	229	"Total debt to date, not including retainage:
230	230	__________________
231	231	"The subcontractor below provides this notice only to
232	232	preserve the subcontractor's lien rights.
233	233	"__________________ (Subcontractor's signature)
234	234	"__________________ (Subcontractor's printed name)
235	235	"__________________ (Subcontractor's address)"
236	236	SECTION 11. The heading to Section 53.057, Property Code,
237	237	is amended to read as follows:
238	238	Sec. 53.057. DERIVATIVE CLAIMANT: NOTICE FOR [CONTRACTUAL]
239	239	RETAINAGE CLAIM.
240	240	SECTION 12. Section 53.057, Property Code, is amended by
241	241	amending Subsection (a) and adding Subsection (a-1) to read as
242	242	follows:
243	243	(a) A subcontractor whose contract provides for the
244	244	withholding of retainage must [claimant may] give notice under this
245	245	section [instead of or] in addition to notice under Section 53.056
246	246	for the retainage lien to be valid. The subcontractor must send the
247	247	notice of retainage claim to the owner or reputed owner and the
248	248	original contractor, by certified mail, not later than the 30th day
249	249	after the date the subcontractor's contract providing for retainage
250	250	is completed, terminated, or abandoned [or 53.252 if the claimant
251	251	is to labor, furnish labor or materials, or specially fabricate
252	252	materials, or has labored, furnished labor or materials, or
253	253	specially fabricated materials, under an agreement with an original
254	254	contractor or a subcontractor providing for retainage].
255	255	(a-1) The notice must read:
256	256	"NOTICE OF RETAINAGE CLAIM
257	257	"Date: __________________
258	258	"Subcontractor: __________________
259	259	"Original contractor: __________________
260	260	"Party contracting with subcontractor: __________________
261	261	"Amount of subcontractual retainage outstanding:
262	262	__________________
263	263	"The subcontractor below provides this notice only to
264	264	preserve the subcontractor's lien rights for retainage.
265	265	"__________________ (Subcontractor's signature)
266	266	"__________________ (Subcontractor's printed name)
267	267	"__________________ (Subcontractor's address)"
268	268	SECTION 13. Section 53.081(a), Property Code, is amended to
269	269	read as follows:
270	270	(a) If an owner receives notice under Section 53.056 or [,]
271	271	53.057, [53.058, 53.252, or 53.253,] the owner may withhold from
272	272	payments to the original contractor an amount necessary to pay the
273	273	claim for which the owner [he] receives notice.
274	274	SECTION 14. Section 53.082, Property Code, is amended to
275	275	read as follows:
276	276	Sec. 53.082. TIME FOR WHICH FUNDS ARE WITHHELD. Unless
277	277	[payment is made under Section 53.083 or] the claim is otherwise
278	278	settled, discharged, indemnified against under Subchapter H or I,
279	279	or determined to be invalid by a final judgment of a court, the
280	280	owner may [shall] retain the funds withheld until:
281	281	(1) the time for filing the affidavit of mechanic's
282	282	lien has passed; or
283	283	(2) if a lien affidavit has been filed, until the lien
284	284	claim has been satisfied or released.
285	285	SECTION 15. Section 53.084, Property Code, is amended to
286	286	read as follows:
287	287	Sec. 53.084. OWNER'S LIABILITY. (a) Except for the amount
288	288	described by Subsection (c) [required to be retained under
289	289	Subchapter E], the owner is not liable for any amount paid to the
290	290	original contractor before the owner is authorized to withhold
291	291	funds under this subchapter.
292	292	(b) If the owner has received a notice [the notices]
293	293	required by Section 53.056 or 53.057 [Subchapter C or K], if the
294	294	lien has been secured, and if the claim has been reduced to final
295	295	judgment, the owner is liable and the owner's property is subject to
296	296	a claim for the amount the owner [any money] paid to the original
297	297	contractor after the owner received the notice, which may not
298	298	exceed the unpaid amount specified in the notice [was authorized to
299	299	withhold funds under this subchapter. The owner is liable for that
300	300	amount in addition to any amount for which he is liable under
301	301	Subchapter E].
302	302	(c) An owner is liable and the owner's property is subject
303	303	to a claim for retainage debts of subcontractors of not more than 10
304	304	percent of the original contract price if:
305	305	(1) the owner received the notices under Sections
306	306	53.056 and 53.057;
307	307	(2) the owner did not withhold sufficient funds from
308	308	the original contractor to pay the amount owed; and
309	309	(3) the claim has been reduced to final judgment.
310	310	(d) Multiple claimants for retainage are entitled to a pro
311	311	rata share of the claim amount allowed under Subsection (c).
312	312	SECTION 16. The heading to Subchapter E, Chapter 53,
313	313	Property Code, is amended to read as follows:
314	314	SUBCHAPTER E. TERMINATION OR ABANDONMENT OF CONTRACT [REQUIRED
315	315	RETAINAGE FOR BENEFIT OF LIEN CLAIMANTS]
316	316	SECTION 17. Sections 53.107(a), (b), and (d), Property
317	317	Code, are amended to read as follows:
318	318	(a) Not later than the 10th day after the date an original
319	319	contract is terminated or the original contractor abandons
320	320	performance under the original contract, the owner shall give
321	321	notice to each subcontractor who, before the date of termination or
322	322	abandonment, has:
323	323	(1) given notice to the owner as provided by Section
324	324	53.056 or [,] 53.057 [, or 53.058]; or
325	325	(2) sent to the owner by certified [or registered]
326	326	mail a written request for notice of termination or abandonment.
327	327	(b) The notice must contain:
328	328	(1) the name and address of the owner;
329	329	(2) the name and address of the original contractor;
330	330	(3) a description, legally sufficient for
331	331	identification, of the real property on which the improvements are
332	332	located;
333	333	(4) a general description of the improvements agreed
334	334	to be furnished under the original contract;
335	335	(5) a statement that the original contract has been
336	336	terminated or that performance under the contract has been
337	337	abandoned; and
338	338	(6) the date of the termination or abandonment [; and
339	339	[(7) a conspicuous statement that a claimant may not
340	340	have a lien on the retained funds unless the claimant files an
341	341	affidavit claiming a lien not later than the 40th day after the date
342	342	of the termination or abandonment].
343	343	(d) If an owner is required to send a notice to a
344	344	subcontractor under this section and fails to send the notice, the
345	345	subcontractor's deadline to file an affidavit for contractual
346	346	retainage under Section 53.052 is the last business day of the
347	347	fourth calendar month after the date the original contract was
348	348	terminated or abandoned [subcontractor is not required to comply
349	349	with Section 53.057 to claim retainage and may claim a lien by
350	350	filing a lien affidavit as prescribed by Section 53.052].
351	351	SECTION 18. Section 53.122(a), Property Code, is amended to
352	352	read as follows:
353	353	(a) Except as provided by [Subchapter E and] Section
354	354	53.124(e), perfected mechanic's liens are on equal footing without
355	355	reference to the date of filing the affidavit claiming the lien.
356	356	SECTION 19. Section 53.123(a), Property Code, is amended to
357	357	read as follows:
358	358	(a) Except as provided by this section, a mechanic's lien
359	359	attaches to an improvement [the house, building, improvements, or
360	360	railroad property] in preference to any prior lien, encumbrance, or
361	361	mortgage on the land on which it is located, and the person
362	362	enforcing the lien may have the [house, building,] improvement [,
363	363	or any piece of the railroad property] sold separately.
364	364	SECTION 20. Section 53.124(e), Property Code, is amended to
365	365	read as follows:
366	366	(e) The time of inception of a lien that is created under
367	367	Section 53.021(c) [, (d),] or (e) is the date of recording of an
368	368	affidavit of lien under Section 53.052. The priority of a lien
369	369	claimed by a person entitled to a lien under Section 53.021(c) [,
370	370	(d),] or (e) with respect to other mechanic's liens is determined by
371	371	the date of recording. A lien created under Section 53.021(c) [,
372	372	(d),] or (e) is not valid or enforceable against a grantee or
373	373	purchaser who acquires an interest in the real property before the
374	374	time of inception of the lien.
375	375	SECTION 21. Section 53.155, Property Code, is amended to
376	376	read as follows:
377	377	Sec. 53.155. TRANSFER OF PROPERTY SOLD. If the [house,
378	378	building,] improvement [,] or any piece of the improvement
379	379	[railroad property] is sold separately, the officer making the sale
380	380	shall place the purchaser in possession. The purchaser is entitled
381	381	to a reasonable time after the date of purchase within which to
382	382	remove the purchased improvement [property].
383	383	SECTION 22. Section 53.157, Property Code, is amended to
384	384	read as follows:
385	385	Sec. 53.157. DISCHARGE OF LIEN. A mechanic's lien or
386	386	affidavit claiming a mechanic's lien filed under Section 53.052 may
387	387	be discharged of record by:
388	388	(1) recording a lien release signed by the claimant
389	389	under Section 53.152;
390	390	(2) failing to institute suit to foreclose the lien in
391	391	the county in which the improvement [property] is located within
392	392	the period prescribed by Section 53.158 or [,] 53.175 [, or 53.208];
393	393	(3) recording the original or certified copy of a
394	394	final judgment or decree of a court of competent jurisdiction
395	395	providing for the discharge;
396	396	(4) filing the bond and notice in compliance with
397	397	Subchapter H;
398	398	(5) filing the bond in compliance with Subchapter I;
399	399	or
400	400	(6) recording a certified copy of the order removing
401	401	the lien under Section 53.160 [and a certificate from the clerk of
402	402	the court that states that no bond or deposit as described by
403	403	Section 53.161 was filed by the claimant within 30 days after the
404	404	date the order was entered].
405	405	SECTION 23. Section 53.158, Property Code, is amended by
406	406	amending Subsection (a) and adding Subsection (a-1) to read as
407	407	follows:
408	408	(a) Suit [Except as provided by Subsection (b), suit] must
409	409	be brought to foreclose the lien not later than the first
410	410	anniversary of [within two years after] the date [last day] a
411	411	claimant filed [may file] the lien affidavit under Section 53.052
412	412	[or within one year after completion, termination, or abandonment
413	413	of the work under the original contract under which the lien is
414	414	claimed, whichever is later].
415	415	(a-1) Notwithstanding Section 16.069, Civil Practice and
416	416	Remedies Code, or any other law, if suit is brought for an order
417	417	finding that limitations have expired on bringing a lien
418	418	foreclosure suit, the lien claimant's rights to pursue a suit to
419	419	foreclose a lien are not revived.
420	420	SECTION 24. Sections 53.159(a) and (f), Property Code, are
421	421	amended to read as follows:
422	422	(a) An owner or original contractor, on written request,
423	423	shall furnish the following information [within a reasonable time,
424	424	but] not later than the 10th day after the date the request is
425	425	received[,] to any person furnishing labor or materials for the
426	426	project:
427	427	(1) a description of the real property being improved
428	428	legally sufficient to identify it;
429	429	(2) whether there is a surety bond and if so, the name
430	430	and last known address of the surety and a copy of the bond;
431	431	(3) whether there are any prior recorded liens or
432	432	security interests on the real property being improved and if so,
433	433	the name and address of the person having the lien or security
434	434	interest; and
435	435	(4) the date on which the original contract for the
436	436	project was executed.
437	437	(f) A person [, other than a claimant requested to furnish
438	438	information under Subsection (d),] who fails to furnish information
439	439	as required by this section is liable to the requesting person for
440	440	that person's reasonable and necessary costs incurred in procuring
441	441	the requested information.
442	442	SECTION 25. Sections 53.160(a), (b), (c), and (e), Property
443	443	Code, are amended to read as follows:
444	444	(a) An owner or original contractor may bring suit [In a
445	445	suit brought to foreclose a lien or] to declare a claim or lien
446	446	invalid or unenforceable [, a party objecting to the validity or
447	447	enforceability of the claim or lien may file a motion to remove the
448	448	claim or lien]. The original petition or subsequent motion must [be
449	449	verified and] state the legal and factual basis for objecting to the
450	450	validity or enforceability of the claim or lien and must [. The
451	451	motion may] be accompanied by supporting affidavits.
452	452	(b) The grounds for objecting to the validity or
453	453	enforceability of the claim or lien for purposes of the motion are
454	454	limited to the following:
455	455	(1) notice of claim was not timely furnished to the
456	456	owner or original contractor as required by Section 53.056 or [,]
457	457	53.057 [, 53.058, 53.252, or 53.253];
458	458	(2) an affidavit claiming a lien failed to comply with
459	459	Section 53.054 or was not filed as required by Section 53.052;
460	460	(3) notice of the filed affidavit was not furnished to
461	461	the owner or original contractor as required by Section 53.055;
462	462	(4) [the deadlines for perfecting a lien claim for
463	463	retainage under this chapter have expired and the owner complied
464	464	with the requirements of Section 53.101 and paid the retainage and
465	465	all other funds owed to the original contractor before:
466	466	[(A) the claimant perfected the lien claim; and
467	467	[(B) the owner received a notice of the claim as
468	468	required by this chapter;
469	469	[(5)] all funds subject to the notice of a claim to the
470	470	owner and a notice regarding the retainage have been deposited in
471	471	the registry of the court and the owner has no additional liability
472	472	to the claimant;
473	473	(5) [(6)] when the lien affidavit was filed on
474	474	homestead property:
475	475	(A) no contract was executed or filed as required
476	476	by Section 53.254;
477	477	(B) the affidavit claiming a lien failed to
478	478	contain the notice as required by Section 53.254; or
479	479	(C) the notice of the claim failed to include the
480	480	statement required by Section 53.254; and
481	481	(6) [(7)] the claimant executed a [valid and
482	482	enforceable] waiver or release of the claim or lien claimed in the
483	483	affidavit.
484	484	(c) The claimant is not required to file a response. The
485	485	claimant and any other party that has appeared in the proceeding
486	486	must be notified by at least 30 [21] days before the date of the
487	487	hearing on the motion. [A motion may not be heard before the 21st
488	488	day after the date the claimant answers or appears in the
489	489	proceeding.]
490	490	(e) The court shall promptly determine a motion to remove a
491	491	claim or lien under this section under the same standards as a
492	492	motion for summary judgment. If the court determines that the
493	493	movant is not entitled to remove the lien, the court shall enter an
494	494	order denying the motion. If the court determines that the movant is
495	495	entitled to remove the lien, the court shall enter an order removing
496	496	the lien claimed in the lien affidavit. The order is appealable if
497	497	the order is the final order in the case [A party to the proceeding
498	498	may not file an interlocutory appeal from the court's order].
499	499	SECTION 26. Sections 53.161(a) and (g), Property Code, are
500	500	amended to read as follows:
501	501	(a) In the order removing a lien, the court shall set the
502	502	amount of security that the claimant may provide in order to
503	503	preserve the potential validity of the lien claim on appeal [stay
504	504	the removal of the claim or lien]. The amount of the security [sum]
505	505	must be at least 75 percent of the [an] amount of the lien claim plus
506	506	[that the court determines is] a reasonable estimate of the costs
507	507	and attorney's fees the movant is likely to incur in the appeal
508	508	[proceeding] to determine the validity or enforceability of the
509	509	lien. [The sum may not exceed the amount of the lien claim.]
510	510	(g) If an appeal is not taken or if the bond or deposit is
511	511	not timely made, the [The] claim or lien is removed and extinguished
512	512	as to a creditor or subsequent purchaser for valuable consideration
513	513	who obtains an interest in the property [after the certified copy of
514	514	the order and certificate of the clerk of the court are filed with
515	515	the county clerk. The removal of the lien does not constitute a
516	516	release of the liability of the owner, if any, to the claimant].
517	517	SECTION 27. Section 53.205(a), Property Code, is amended to
518	518	read as follows:
519	519	(a) The bond protects all persons with a claim that is [:
520	520	[(1)] perfected in the manner prescribed for fixing a
521	521	lien [under Subchapter C or, if the claim relates to a residential
522	522	construction project, under Subchapter K; or
523	523	[(2) perfected in the manner prescribed by Section
524	524	53.206].
525	525	SECTION 28. Sections 53.206(a), (b), and (d), Property
526	526	Code, are amended to read as follows:
527	527	(a) To perfect a claim against a bond in a manner other than
528	528	that prescribed by Subchapter C [or K] for fixing a lien, a person
529	529	must [:
530	530	[(1)] give to the original contractor and surety on
531	531	the bond all applicable notices under the appropriate subchapter [;
532	532	and
533	533	[(2) give to the surety on the bond, instead of the
534	534	owner, all notices under the appropriate subchapter required to be
535	535	given to the owner].
536	536	(b) To perfect a claim under this section, a person is not
537	537	required to [:
538	538	[(1) give notice to the surety under Section 53.057,
539	539	unless the claimant has a direct contractual relationship with the
540	540	original contractor and the agreed retainage is in excess of 10
541	541	percent of the contract;
542	542	[(2) give notice to the surety under Section 53.058(b)
543	543	or, if the claim relates to a residential construction project,
544	544	under Section 53.253(c); or
545	545	[(3)] file any affidavit with the county clerk.
546	546	(d) A person satisfies the requirements of this section
547	547	relating to providing notice to the surety if the person mails the
548	548	notice by certified [or registered] mail to the surety:
549	549	(1) at the address stated on the bond or on an
550	550	attachment to the bond;
551	551	(2) at the address on file with the Texas Department of
552	552	Insurance; or
553	553	(3) at any other address allowed by law.
554	554	SECTION 29. Section 53.207, Property Code, is amended to
555	555	read as follows:
556	556	Sec. 53.207. FAILURE TO SEND [OWNER'S] NOTICE OF CLAIM TO
557	557	SURETY. [(a)] If the owner receives any of the notices or a lien is
558	558	fixed under this chapter [Subchapter C or K], the failure [owner
559	559	shall mail to the surety on the bond a copy of all notices received.
560	560	[(b) Failure] of the owner to send copies of notices to the
561	561	surety does not relieve the surety of any liability under the bond
562	562	if the claimant has complied with the requirements of this
563	563	subchapter, nor does that failure impose any liability on the
564	564	owner.
565	565	SECTION 30. The heading to Section 53.254, Property Code,
566	566	is amended to read as follows:
567	567	Sec. 53.254. CONTRACT REQUIREMENTS FOR LIEN ON HOMESTEAD.
568	568	SECTION 31. Section 53.254(g), Property Code, is amended to
569	569	read as follows:
570	570	(g) For the lien on a homestead to be valid, a [the] notice
571	571	must [required to] be given to the owner with the original contract
572	572	and [under Section 53.252] must include or have attached the
573	573	following statement:
574	574	"If a subcontractor or supplier who furnishes materials or
575	575	performs labor for construction of improvements on your property is
576	576	not paid, your property may be subject to a lien for the unpaid
577	577	amount if[:
578	578	[(1)] after receiving notice of the unpaid claim from
579	579	the claimant, you fail to withhold payment to your contractor that
580	580	is sufficient to cover the unpaid claim until the dispute is
581	581	resolved. Additionally, you may be liable for up to an additional
582	582	10 percent of the price of the original contract for contractual
583	583	retainage claims"[; or
584	584	[(2) during construction and for 30 days after
585	585	completion of construction, you fail to retain 10 percent of the
586	586	contract price or 10 percent of the value of the work performed by
587	587	your contractor].
588	588	["If you have complied with the law regarding the 10 percent
589	589	retainage and you have withheld payment to the contractor
590	590	sufficient to cover any written notice of claim and have paid that
591	591	amount, if any, to the claimant, any lien claim filed on your
592	592	property by a subcontractor or supplier, other than a person who
593	593	contracted directly with you, will not be a valid lien on your
594	594	property. In addition, except for the required 10 percent
595	595	retainage, you are not liable to a subcontractor or supplier for any
596	596	amount paid to your contractor before you received written notice
597	597	of the claim."]
598	598	SECTION 32. Section 53.255(b), Property Code, is amended to
599	599	read as follows:
600	600	(b) The disclosure statement must read substantially
601	601	similar to the following:
602	602	"KNOW YOUR RIGHTS AND RESPONSIBILITIES UNDER THE LAW. You
603	603	are about to enter into a transaction to build a new home or remodel
604	604	existing residential property. Texas law requires your contractor
605	605	to provide you with this brief overview of some of your rights,
606	606	responsibilities, and risks in this transaction.
607	607	"CONVEYANCE TO CONTRACTOR NOT REQUIRED. Your contractor may
608	608	not require you to convey your real property to your contractor as a
609	609	condition to the agreement for the construction of improvements on
610	610	your property.
611	611	"KNOW YOUR CONTRACTOR. Before you enter into your agreement
612	612	for the construction of improvements to your real property, make
613	613	sure that you have investigated your contractor. Obtain and verify
614	614	references from other people who have used the contractor for the
615	615	type and size of construction project on your property.
616	616	"GET IT IN WRITING. Make sure that you have a written
617	617	agreement with your contractor that includes: (1) a description of
618	618	the work the contractor is to perform; (2) the required or
619	619	estimated time for completion of the work; (3) the cost of the work
620	620	or how the cost will be determined; and (4) the procedure and
621	621	method of payment, including provisions for [statutory] retainage
622	622	and conditions for final payment. If your contractor made a
623	623	promise, warranty, or representation to you concerning the work the
624	624	contractor is to perform, make sure that promise, warranty, or
625	625	representation is specified in the written agreement. An oral
626	626	promise that is not included in the written agreement may not be
627	627	enforceable under Texas law.
628	628	"READ BEFORE YOU SIGN. Do not sign any document before you
629	629	have read and understood it. NEVER SIGN A DOCUMENT THAT INCLUDES AN
630	630	UNTRUE STATEMENT. Take your time in reviewing documents. If you
631	631	borrow money from a lender to pay for the improvements, you are
632	632	entitled to have the loan closing documents furnished to you for
633	633	review at least one business day before the closing. Do not waive
634	634	this requirement unless a bona fide emergency or another good cause
635	635	exists, and make sure you understand the documents before you sign
636	636	them. If you fail to comply with the terms of the documents, you
637	637	could lose your property. You are entitled to have your own
638	638	attorney review any documents. If you have any question about the
639	639	meaning of a document, consult an attorney.
640	640	"GET A LIST OF SUBCONTRACTORS AND SUPPLIERS. Before
641	641	construction commences, your contractor is required to provide you
642	642	with a list of the subcontractors and suppliers the contractor
643	643	intends to use on your project. Your contractor is required to
644	644	supply updated information on any subcontractors and suppliers
645	645	added after the list is provided. Your contractor is not required
646	646	to supply this information if you sign a written waiver of your
647	647	rights to receive this information.
648	648	"MONITOR THE WORK. Lenders and governmental authorities may
649	649	inspect the work in progress from time to time for their own
650	650	purposes. These inspections are not intended as quality control
651	651	inspections. Quality control is a matter for you and your
652	652	contractor. To ensure that your home is being constructed in
653	653	accordance with your wishes and specifications, you should inspect
654	654	the work yourself or have your own independent inspector review the
655	655	work in progress.
656	656	"MONITOR PAYMENTS. If you use a lender, your lender is
657	657	required to provide you with a periodic statement showing the money
658	658	disbursed by the lender from the proceeds of your loan. Each time
659	659	your contractor requests payment from you or your lender for work
660	660	performed, your contractor is also required to furnish you with a
661	661	disbursement statement that lists the name and address of each
662	662	subcontractor or supplier that the contractor intends to pay from
663	663	the requested funds. Review these statements and make sure that the
664	664	money is being properly disbursed.
665	665	"CLAIMS BY SUBCONTRACTORS AND SUPPLIERS. Under Texas law, if
666	666	a subcontractor or supplier who furnishes labor or materials for
667	667	the construction of improvements on your property is not paid, you
668	668	may become liable and your property may be subject to a lien for the
669	669	unpaid amount, even if you have not contracted directly with the
670	670	subcontractor or supplier. To avoid liability, you should take the
671	671	following actions:
672	672	(1) If you receive a written notice from a
673	673	subcontractor or supplier, you should withhold payment from your
674	674	contractor for the amount of the claim stated in the notice until
675	675	the dispute between your contractor and the subcontractor or
676	676	supplier is resolved. If your lender is disbursing money directly
677	677	to your contractor, you should immediately provide a copy of the
678	678	notice to your lender and instruct the lender to withhold payment in
679	679	the amount of the claim stated in the notice. If you continue to pay
680	680	the contractor after receiving the written notice without
681	681	withholding the amount of the claim, you may be liable and your
682	682	property may be subject to a lien for the amount you failed to
683	683	withhold.
684	684	(2) During construction and for 30 days after final
685	685	completion, termination, or abandonment of the contract by the
686	686	contractor, you should withhold or cause your lender to withhold
687	687	the greater of the amount you are required to withhold under the
688	688	contract or an amount equal to 10 percent of the amount of payments
689	689	made for the work performed by your contractor. This is [sometimes]
690	690	referred to as ['statutory] retainage.['] If you choose not to
691	691	withhold at least [the] 10 percent for at least 30 days after final
692	692	completion, termination, or abandonment of the contract by the
693	693	contractor and if a valid claim is timely made by a claimant and
694	694	your contractor fails to pay the claim, you may be personally liable
695	695	and your property may be subject to a lien up to the amount that you
696	696	failed to withhold.
697	697	"If a claim is not paid within a certain time period, the
698	698	claimant is required to file a mechanic's lien affidavit in the real
699	699	property records in the county where the property is located. A
700	700	mechanic's lien affidavit is not a lien on your property, but the
701	701	filing of the affidavit could result in a court imposing a lien on
702	702	your property if the claimant is successful in litigation to
703	703	enforce the lien claim.
704	704	"SOME CLAIMS MAY NOT BE VALID. When you receive a written
705	705	notice of a claim or when a mechanic's lien affidavit is filed on
706	706	your property, you should know your legal rights and
707	707	responsibilities regarding the claim. Not all claims are valid. A
708	708	notice of a claim by a subcontractor or supplier is required to be
709	709	sent, and the mechanic's lien affidavit is required to be filed,
710	710	within strict time periods. The notice and the affidavit must
711	711	contain certain information. All claimants may not fully comply
712	712	with the legal requirements to collect on a claim. If you have paid
713	713	the contractor in full before receiving a notice of a claim and have
714	714	fully complied with the law regarding [statutory] retainage, you
715	715	may not be liable for that claim. Accordingly, you should consult
716	716	your attorney when you receive a written notice of a claim to
717	717	determine the true extent of your liability or potential liability
718	718	for that claim.
719	719	"OBTAIN A LIEN RELEASE AND A BILLS-PAID AFFIDAVIT. When you
720	720	receive a notice of claim, do not release withheld funds without
721	721	obtaining a signed and notarized release of lien and claim from the
722	722	claimant. You can also reduce the risk of having a claim filed by a
723	723	subcontractor or supplier by requiring as a condition of each
724	724	payment made by you or your lender that your contractor furnish you
725	725	with an affidavit stating that all bills have been paid. Under
726	726	Texas law, on final completion of the work and before final payment,
727	727	the contractor is required to furnish you with an affidavit stating
728	728	that all bills have been paid. If the contractor discloses any
729	729	unpaid bill in the affidavit, you should withhold payment in the
730	730	amount of the unpaid bill until you receive a waiver of lien or
731	731	release from that subcontractor or supplier.
732	732	"OBTAIN TITLE INSURANCE PROTECTION. You may be able to obtain
733	733	a title insurance policy to insure that the title to your property
734	734	and the existing improvements on your property are free from liens
735	735	claimed by subcontractors and suppliers. If your policy is issued
736	736	before the improvements are completed and covers the value of the
737	737	improvements to be completed, you should obtain, on the completion
738	738	of the improvements and as a condition of your final payment, a '
739	739	completion of improvements' policy endorsement. This endorsement
740	740	will protect your property from liens claimed by subcontractors and
741	741	suppliers that may arise from the date the original title policy is
742	742	issued to the date of the endorsement."
743	743	SECTION 33. Section 53.281(b), Property Code, is amended to
744	744	read as follows:
745	745	(b) A waiver and release is effective to release the owner,
746	746	the owner's property, the contractor, and the surety on a payment
747	747	bond from claims and liens only if:
748	748	(1) the waiver and release substantially complies with
749	749	one of the forms prescribed by Section 53.284;
750	750	(2) the waiver and release is signed by the claimant or
751	751	the claimant's authorized agent [and notarized]; and
752	752	(3) in the case of a conditional release, evidence of
753	753	payment to the claimant exists.
754	754	SECTION 34. Sections 53.282(a) and (b), Property Code, are
755	755	amended to read as follows:
756	756	(a) A statement purporting to waive, release, or otherwise
757	757	adversely affect a lien or payment bond claim is not enforceable and
758	758	does not create an estoppel or impairment of a lien or payment bond
759	759	claim unless:
760	760	(1) the statement is in writing and substantially
761	761	complies with a form prescribed by Section 53.284;
762	762	(2) for a conditional lien waiver, the claimant has
763	763	actually received payment in good and sufficient funds in full for
764	764	the lien or payment bond claim; or
765	765	(3) the statement is:
766	766	(A) in a written original contract or subcontract
767	767	for the construction, remodel, or repair of a single-family house,
768	768	townhouse, or duplex or for land development related to a
769	769	single-family house, townhouse, or duplex; and
770	770	(B) made before labor or materials are provided
771	771	under the original contract or subcontract.
772	772	(b) The filing of a lien rendered unenforceable by a lien
773	773	waiver under Subsection (a)(3) is a violation of [does not violate]
774	774	Section 12.002, Civil Practice and Remedies Code[, unless:
775	775	[(1) an owner or original contractor sends a written
776	776	explanation of the basis for nonpayment, evidence of the
777	777	contractual waiver of lien rights, and a notice of request for
778	778	release of the lien to the claimant at the claimant's address stated
779	779	in the lien affidavit; and
780	780	[(2) the lien claimant does not release the filed lien
781	781	affidavit on or before the 14th day after the date the owner or the
782	782	original contractor sends the items required by Subdivision (1)].
783	783	SECTION 35. Sections 53.284(b) and (c), Property Code, are
784	784	amended to read as follows:
785	785	(b) If a claimant or potential claimant is required to
786	786	execute a waiver and release in exchange for or to induce the
787	787	payment of a progress payment and is not paid in exchange for the
788	788	waiver and release or if a single payee check or joint payee check
789	789	is given in exchange for the waiver and release, the waiver and
790	790	release must read:
791	791	"CONDITIONAL WAIVER AND RELEASE ON PROGRESS PAYMENT
792	792	"Project ___________________
793	793	"Job No. ___________________
794	794	"On receipt by the signer of this document of a check from
795	795	________________ (maker of check) in the sum of $__________ payable
796	796	to _____________________ (payee or payees of check) and when the
797	797	check has been properly endorsed and has been paid by the bank on
798	798	which it is drawn, this document becomes effective to release any
799	799	mechanic's lien right, any right arising from a payment bond that
800	800	complies with a state or federal statute, any common law payment
801	801	bond right, any claim for payment, and any rights under any similar
802	802	ordinance, rule, or statute related to claim or payment rights for
803	803	persons in the signer's position that the signer has on the property
804	804	of ________________ (owner) located at ______________________
805	805	(location) to the following extent: ______________________ (job
806	806	description).
807	807	"This release covers a progress payment for all labor,
808	808	services, equipment, or materials furnished to the property or to
809	809	__________________ (person with whom signer contracted) as
810	810	indicated in the attached statement(s) or progress payment
811	811	request(s), except for unpaid retention, pending modifications and
812	812	changes, or other items furnished. This excludes retainage and the
813	813	following open matters: ___________________________.
814	814	"Before any recipient of this document relies on this
815	815	document, the recipient should verify evidence of payment to the
816	816	signer.
817	817	"The signer warrants that the signer has already paid or will
818	818	use the funds received from this progress payment to promptly pay in
819	819	full all of the signer's laborers, subcontractors, materialmen, and
820	820	suppliers for all work, materials, equipment, or services provided
821	821	for or to the above referenced project in regard to the attached
822	822	statement(s) or progress payment request(s).
823	823	"Date ____________________________
824	824	"_________________________________ (Company name)
825	825	"By ______________________________ (Signature)
826	826	"_________________________________ (Title)"
827	827	(c) If a claimant or potential claimant is required to
828	828	execute an unconditional waiver and release to prove the receipt of
829	829	good and sufficient funds for a progress payment and the claimant or
830	830	potential claimant asserts in the waiver and release that the
831	831	claimant or potential claimant has been paid the progress payment,
832	832	the waiver and release must:
833	833	(1) contain a notice at the top of the document,
834	834	printed in bold type at least as large as the largest type used in
835	835	the document, but not smaller than 10-point type, that reads:
836	836	"NOTICE:
837	837	"This document waives rights unconditionally and states that
838	838	you have been paid for giving up those rights. It is prohibited for
839	839	a person to require you to sign this document if you have not been
840	840	paid the payment amount set forth below. If you have not been paid,
841	841	use a conditional release form."; and
842	842	(2) below the notice, read:
843	843	"UNCONDITIONAL WAIVER AND RELEASE ON PROGRESS PAYMENT
844	844	"Project ___________________
845	845	"Job No. ___________________
846	846	"The signer of this document has been paid and has received a
847	847	progress payment in the sum of $___________ for all labor,
848	848	services, equipment, or materials furnished to the property or to
849	849	_____________________ (person with whom signer contracted) on the
850	850	property of _______________________ (owner) located at
851	851	______________________ (location) to the following extent:
852	852	______________________ (job description). The signer therefore
853	853	waives and releases any mechanic's lien right, any right arising
854	854	from a payment bond that complies with a state or federal statute,
855	855	any common law payment bond right, any claim for payment, and any
856	856	rights under any similar ordinance, rule, or statute related to
857	857	claim or payment rights for persons in the signer's position that
858	858	the signer has on the above referenced project to the following
859	859	extent:
860	860	"This release covers a progress payment for all labor,
861	861	services, equipment, or materials furnished to the property or to
862	862	__________________ (person with whom signer contracted) as
863	863	indicated in the attached statement(s) or progress payment
864	864	request(s), except for unpaid retention, pending modifications and
865	865	changes, or other items furnished. This excludes retainage and the
866	866	following open matters:___________________________.
867	867	"The signer warrants that the signer has already paid or will
868	868	use the funds received from this progress payment to promptly pay in
869	869	full all of the signer's laborers, subcontractors, materialmen, and
870	870	suppliers for all work, materials, equipment, or services provided
871	871	for or to the above referenced project in regard to the attached
872	872	statement(s) or progress payment request(s).
873	873	"Date ____________________________
874	874	"_________________________________ (Company name)
875	875	"By ______________________________ (Signature)
876	876	"_________________________________ (Title)"
877	877	SECTION 36. The following provisions of the Property Code
878	878	are repealed:
879	879	(1) Sections 53.021(b) and (d);
880	880	(2) Section 53.022(c);
881	881	(3) Section 53.026(b);
882	882	(4) Section 53.053;
883	883	(5) Sections 53.056(b), (c), (d), (e), and (f);
884	884	(6) Sections 53.057(b), (b-1), (c), (d), (e), (f), and
885	885	(g);
886	886	(7) Section 53.058;
887	887	(8) Sections 53.081(b), (c), and (d);
888	888	(9) Section 53.083;
889	889	(10) Sections 53.101, 53.102, 53.103, 53.104, 53.105,
890	890	and 53.106;
891	891	(11) Section 53.107(e);
892	892	(12) Section 53.158(b);
893	893	(13) Sections 53.159(b), (c), (d), and (e);
894	894	(14) Section 53.160(f);
895	895	(15) Sections 53.161(b) and (f);
896	896	(16) Section 53.162;
897	897	(17) Sections 53.203(d) and (e);
898	898	(18) Section 53.205(b);
899	899	(19) Section 53.206(c);
900	900	(20) Sections 53.252 and 53.253; and
901	901	(21) Section 53.283.
902	902	SECTION 37. The changes in law made by this Act apply only
903	903	to an original contract entered into on or after the effective date
904	904	of this Act. An original contract entered into before the effective
905	905	date of this Act is governed by the law as it existed immediately
906	906	before the effective date of this Act, and that law is continued in
907	907	effect for that purpose.
908	908	SECTION 38. This Act takes effect September 1, 2019.