Texas 2019 - 86th Regular

Texas House Bill HB589 Compare Versions

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

Old	New	Differences
1	1	86R1809 BEE-F
2	2	By: Deshotel H.B. No. 589
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	authorizing a fee; changing the eligibility for community
9	9	supervision.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 3503.051(3), Insurance Code, is amended
12	12	to read as follows:
13	13	(3) "Notice of claim" means a written notification by
14	14	a claimant who makes a claim for payment from the surety
15	15	company. The term does not include a routine statutory notice
16	16	required by [Section 53.056(b), 53.057, 53.058, 53.252(b), or
17	17	53.253, Property Code, or] Section 2253.047, Government Code.
18	18	SECTION 2. Section 53.001, Property Code, is amended by
19	19	amending Subdivisions (2), (12), (13), and (14) and adding
20	20	Subdivisions (1-a), (2-a), (3-a), (5-a), (5-b), (5-c), (5-d),
21	21	(5-e), (5-f), (7-a), (7-b), (7-c), and (12-a) to read as follows:
22	22	(1-a) "Contractual retainage" means an agreed amount or
23	23	percentage of money in a construction contract or subcontract that
24	24	is withheld from a payment and not due to be paid until completion
25	25	of the contract or on an agreed date.
26	26	(2) "Improved" means, in reference to real property,
27	27	having an improvement, as defined by this section.
28	28	(2-a) "Improvement" means a house, building, or other
29	29	improvement to the real property of an owner. The term includes:
30	30	(A) improvements constructed adjacent to the
31	31	real property under an original contract with the owner, including
32	32	[abutting] sidewalks and streets and utilities in or on those
33	33	sidewalks and streets or appurtenant to the real property;
34	34	(B) clearing, grubbing, draining, or fencing of
35	35	land;
36	36	(C) wells, cisterns, tanks, reservoirs, or
37	37	artificial lakes or pools made for supplying or storing water;
38	38	(D) pumps, siphons, and windmills or other
39	39	machinery or apparatuses used for raising water for stock, domestic
40	40	use, or irrigation; [and]
41	41	(E) planting orchard trees, grubbing out
42	42	orchards and replacing trees, and pruning of orchard trees;
43	43	(F) levees or embankments erected for the
44	44	reclamation of overflow land along a river or creek; and
45	45	(G) railroads.
46	46	(3-a) "Lien website" means the Internet website
47	47	established under Subchapter A-1.
48	48	(5-a) "Notice of commencement" means a notice
49	49	described by Section 53.125.
50	50	(5-b) "Notice of completion or termination" means a
51	51	notice described by Section 53.059.
52	52	(5-c) "Notice of demand" means a notice described by
53	53	Section 53.0521.
54	54	(5-d) "Notice of furnishing" means a notice described
55	55	by Section 53.0561.
56	56	(5-e) "Notice of nonpayment" means a notice described
57	57	by Section 53.0562.
58	58	(5-f) "Notice of unpaid balance" means a notice
59	59	described by Section 53.0563.
60	60	(7-a) "Owner" means a person who owns any interest in
61	61	real property or an authorized agent, trustee, or receiver of the
62	62	person.
63	63	(7-b) "Payment request" includes any bill, billing
64	64	statement, invoice, or application for payment given by an original
65	65	contractor or a subcontractor for work.
66	66	(7-c) "Reputed owner" means a person who is:
67	67	(A) identified as an owner in a notice of
68	68	commencement required under this chapter or in an original contract
69	69	or a subcontract for an improvement; or
70	70	(B) generally considered or reputed to be the
71	71	owner of the real property being improved.
72	72	(12) "Specially fabricated material" means material
73	73	fabricated for use as a component of the construction or repair of
74	74	an improvement so as to be reasonably unsuitable for use elsewhere.
75	75	(12-a) "Subcontract" means a contract between:
76	76	(A) an original contractor and a subcontractor;
77	77	or
78	78	(B) a subcontractor and another subcontractor.
79	79	(13) "Subcontractor" means a person who has furnished
80	80	labor or materials to fulfill an obligation to an original
81	81	contractor or to a subcontractor of any tier to perform all or part
82	82	of the work required by an original contract.
83	83	(14) "Work" means any part of labor done, material
84	84	furnished, or materials specially fabricated for the construction
85	85	or repair of an improvement performed under an original contract.
86	86	SECTION 3. Section 53.003, Property Code, is amended by
87	87	amending Subsections (a) and (c) and adding Subsection (e) to read
88	88	as follows:
89	89	(a) This section applies to notices required by this chapter
90	90	[Subchapters B through G and K]. In this section, "notice" includes
91	91	any written communication required under this chapter.
92	92	(c) A notice may be sent by registered or certified mail. If
93	93	a notice is sent by registered or certified mail, the effective date
94	94	of the notice is the date of deposit or mailing of the notice in the
95	95	United States mail in the form required [constitutes compliance
96	96	with the notice requirement]. This subsection does not apply if the
97	97	law requires receipt of the notice by the person to whom it is
98	98	directed.
99	99	(e) This subsection applies only if a notice of commencement
100	100	has been posted under Section 53.125 and does not apply to a notice
101	101	of demand or a notice of bond. A notice may be posted on the lien
102	102	website under the protocols established for the website. If an
103	103	e-mail address is provided to the owner or reputed owner in a notice
104	104	of furnishing by a person under Section 53.0561, a notice may be
105	105	provided to that person by e-mail with an electronic record of
106	106	delivery. The effective date of a notice is the date the notice is
107	107	posted on the lien website under the website's protocols or the date
108	108	the e-mail is sent. An e-mail sent to a recipient in accordance
109	109	with this subsection is prima facie evidence of delivery of a
110	110	message to an e-mail address to which it is sent.
111	111	SECTION 4. Subchapter A, Chapter 53, Property Code, is
112	112	amended by adding Section 53.004 to read as follows:
113	113	Sec. 53.004. COMPUTATION OF TIME. In computing the period
114	114	of days in which to provide a notice or to take an action required
115	115	under this chapter, if the last day of the period is a Saturday,
116	116	Sunday, or legal holiday, the period is extended to include the next
117	117	day that is not a Saturday, Sunday, or legal holiday.
118	118	SECTION 5. Chapter 53, Property Code, is amended by adding
119	119	Subchapter A-1 to read as follows:
120	120	SUBCHAPTER A-1. LIEN WEBSITE
121	121	Sec. 53.011. LIEN WEBSITE. (a) The secretary of state
122	122	shall:
123	123	(1) establish and maintain a lien website through the
124	124	state electronic Internet portal, as defined by Section 2054.003,
125	125	Government Code; and
126	126	(2) establish protocols for posting and receiving
127	127	notices under this chapter through the lien website.
128	128	(b) The secretary of state may adopt rules and forms
129	129	necessary to implement this subchapter.
130	130	Sec. 53.012. POSTING ON LIEN WEBSITE. (a) The lien website
131	131	must provide an online form for each notice or written
132	132	communication required by this chapter that complies with the
133	133	content requirements of this chapter for the notice or
134	134	communication.
135	135	(b) The lien website must allow a person to electronically:
136	136	(1) obtain a form;
137	137	(2) complete and post the notice or written
138	138	communication on the lien website efficiently; and
139	139	(3) for an owner, original contractor, or
140	140	subcontractor, opt to automatically receive notice of new postings
141	141	by e-mail.
142	142	Sec. 53.013. SEARCHING LIEN WEBSITE. The lien website must
143	143	allow a person to search the notices and written communications
144	144	posted on the lien website with a full or partial:
145	145	(1) owner name;
146	146	(2) project name;
147	147	(3) project address;
148	148	(4) project real property legal description;
149	149	(5) original contractor name; or
150	150	(6) name of the person on whose behalf a notice or
151	151	written communication is posted.
152	152	Sec. 53.014. FEES. (a) Notwithstanding Section 2054.2591,
153	153	Government Code, and except as provided by Subsection (b), the
154	154	secretary of state may not charge a fee for a person to:
155	155	(1) electronically obtain a form or post a notice or
156	156	written communication on the lien website; or
157	157	(2) use the search functions of the lien website.
158	158	(b) The secretary of state may charge a fee for a person to
159	159	post a notice of commencement on the lien website.
160	160	SECTION 6. Section 53.021(a), Property Code, is amended to
161	161	read as follows:
162	162	(a) A person has a lien if:
163	163	(1) the person labors, specially fabricates material,
164	164	or furnishes labor or materials for construction or repair in this
165	165	state of an[:
166	166	[(A) a house, building, or] improvement;
167	167	[(B) a levee or embankment to be erected for the
168	168	reclamation of overflow land along a river or creek; or
169	169	[(C) a railroad;] and
170	170	(2) the person labors, specially fabricates the
171	171	material, or furnishes the labor or materials under or arising out
172	172	[by virtue] of an express [a] contract or contract implied by law
173	173	between the person and:
174	174	(A) [with] the owner or the owner's agent,
175	175	trustee, or receiver;
176	176	(B) a [,] contractor; [,] or
177	177	(C) a subcontractor.
178	178	SECTION 7. Section 53.022, Property Code, is amended by
179	179	amending Subsection (a) and adding Subsections (b-1) and (e) to
180	180	read as follows:
181	181	(a) The lien extends to the interest of the owner or the
182	182	owner's successor in interest in the real property, house,
183	183	building, fixtures, or improvements, the land reclaimed from
184	184	overflow, or the railroad and all of its properties, and to each lot
185	185	of land necessarily connected or reclaimed.
186	186	(b-1) If an improvement is constructed on real property that
187	187	is adjacent to the real property of the owner who entered into the
188	188	original contract for the improvements and the adjacent property is
189	189	not owned by the owner, the lien extends only to the interest
190	190	described by Subsection (a) and not to the adjacent property.
191	191	(e) A lien arising from work performed on common elements of
192	192	a condominium governed by Chapter 81 or 82 extends to each unit
193	193	owning an interest in the common elements being improved, and is
194	194	apportioned based on the relative ownership interests of each unit
195	195	in the common elements being improved, if:
196	196	(1) the inception of the lien is after the date the
197	197	declaration establishing the condominium was recorded; and
198	198	(2) the work was performed under a contract with the
199	199	council of owners, the unit owners' association of the condominium,
200	200	or all of the owners of the units owning an interest in the common
201	201	elements being improved.
202	202	SECTION 8. Section 53.024, Property Code, is amended to
203	203	read as follows:
204	204	Sec. 53.024. LIMITATION ON SUBCONTRACTOR'S LIEN. The
205	205	amount of a lien claimed by a subcontractor may not exceed:
206	206	(1) an amount equal to the proportion of the total
207	207	subcontract price, including all additional amounts to which the
208	208	subcontractor is entitled as an adjustment to the subcontract, that
209	209	the sum of the labor performed, materials furnished, materials
210	210	specially fabricated, reasonable overhead costs incurred, and
211	211	proportionate profit margin bears to the total subcontract price;
212	212	minus
213	213	(2) the sum of previous payments received by the
214	214	claimant on the subcontract.
215	215	SECTION 9. Section 53.026(a), Property Code, is amended to
216	216	read as follows:
217	217	(a) Except as provided by Section 53.0561, a [A] person who
218	218	labors, specially fabricates materials, or furnishes labor or
219	219	materials under a direct contractual relationship with another
220	220	person is considered to be in direct contractual relationship with
221	221	the owner and has a lien as an original contractor, if:
222	222	(1) the owner [contracted with the other person for
223	223	the construction or repair of a house, building, or improvements
224	224	and the owner] can effectively control that other person or that
225	225	other person can effectively control the owner through ownership of
226	226	voting stock, interlocking directorships, or otherwise; or
227	227	(2) the owner contracted with the other person for the
228	228	construction or repair of a house, building, or improvements [and
229	229	that other person can effectively control the owner through
230	230	ownership of voting stock, interlocking directorships, or
231	231	otherwise; or
232	232	[(3) the owner contracted with the other person for
233	233	the construction or repair of a house, building, or improvements]
234	234	and the contract was made without good faith intention of the
235	235	parties that the other person was to perform the contract.
236	236	SECTION 10. Section 53.052, Property Code, is amended to
237	237	read as follows:
238	238	Sec. 53.052. FILING OF LIEN CLAIM AFFIDAVIT. (a) Except as
239	239	provided by Subsection (b) or Section 53.0521, an original
240	240	contractor or a subcontractor, including an employee described by
241	241	Section 53.0563(a)(1), [the person] claiming a [the] lien under
242	242	this chapter must file a lien claim [an] affidavit as provided by
243	243	Subsection (c) [with the county clerk of the county in which the
244	244	property is located or into which the railroad extends] not later
245	245	than the 15th day of the fourth calendar month after the date the
246	246	work under the original contract is completed or the original
247	247	contract is terminated [day on which the indebtedness accrues].
248	248	(b) Except as provided by Section 53.0521, an original
249	249	contractor or a subcontractor, including an employee described by
250	250	Section 53.0563(a)(1), [A person] claiming a lien on [arising from]
251	251	a residential construction project must file a lien claim [an]
252	252	affidavit as provided by Subsection (c) [with the county clerk of
253	253	the county in which the property is located] not later than the 15th
254	254	day of the third calendar month after the date the work under the
255	255	original contract is completed or the original contract is
256	256	terminated [day on which the indebtedness accrues].
257	257	(c) A lien claim affidavit must be filed with the county
258	258	clerk of the county in which the property is located or into which
259	259	the railroad extends. The county clerk shall record the affidavit
260	260	in records kept for that purpose and shall index and cross-index the
261	261	affidavit in the names of the claimant, the original contractor,
262	262	and the owner. Failure of the county clerk to properly record or
263	263	index a filed affidavit does not invalidate the lien.
264	264	(d) For purposes of this section, an original contract is
265	265	terminated on the date an owner posts a notice of termination on the
266	266	lien website. If a notice of commencement has not been filed and
267	267	posted under Section 53.125, the owner must send a notice of
268	268	termination to each person who has given the owner a notice of
269	269	furnishing.
270	270	SECTION 11. Subchapter C, Chapter 53, Property Code, is
271	271	amended by adding Section 53.0521 to read as follows:
272	272	Sec. 53.0521. NOTICE OF DEMAND. (a) If work under an
273	273	original contract has been completed or the original contract has
274	274	been terminated, an owner may send a notice of demand to the
275	275	original contractor or a subcontractor requesting the contractor or
276	276	subcontractor to file a lien claim affidavit. If the notice of
277	277	demand is based on the termination of the original contract, the
278	278	notice must state that the original contract was terminated and the
279	279	date of the termination. An owner may not send the notice of demand
280	280	before the original contract has been terminated. A notice of
281	281	demand sent to a subcontractor before work under the original
282	282	contract has been completed is effective only as to a claimant who
283	283	has completed the claimant's work on or before the date the notice
284	284	is sent and is void as to any other claimant.
285	285	(b) For purposes of this section, an original contract is
286	286	terminated on the date an owner posts a notice of termination on the
287	287	lien website. If a notice of commencement has not been filed and
288	288	posted under Section 53.125, the owner must send a notice of
289	289	termination to each person who has provided a notice of furnishing.
290	290	(c) A notice of demand:
291	291	(1) must be sent by registered or certified mail to:
292	292	(A) an original contractor at the contractor's
293	293	last known address; or
294	294	(B) a subcontractor at the subcontractor's
295	295	address provided by the notice of furnishing; and
296	296	(2) may not be given by posting on the lien website or
297	297	by e-mail.
298	298	(d) If an owner sends a notice of demand, a claimant who has
299	299	completed the claimant's work must, not later than the 30th day
300	300	after the date the notice is sent, file a lien claim affidavit for a
301	301	claim the claimant has not included in a previously filed lien claim
302	302	affidavit.
303	303	(e) A claimant who has not completed the claimant's work on
304	304	the date the owner sends a notice of demand must file a lien claim
305	305	affidavit as provided by Section 53.052(a) or (b), as applicable.
306	306	(f) An original contractor or a subcontractor waives any
307	307	statutory lien rights that have not been perfected if the
308	308	contractor or subcontractor does not comply with this section.
309	309	(g) A notice of demand must be conspicuously printed in bold
310	310	type and in all capital letters not smaller than 10-point type and
311	311	must state the following:
312	312	"NOTICE OF DEMAND
313	313	"WARNING: THIS NOTICE BRIEFLY SUMMARIZES LEGAL REQUIREMENTS
314	314	STATED BY SECTION 53.0521, PROPERTY CODE. YOU SHOULD CONSULT AN
315	315	ATTORNEY TO FULLY UNDERSTAND YOUR RIGHTS AND OBLIGATIONS.
316	316	"THE OWNER IS DEMANDING THAT YOU FILE A LIEN CLAIM AFFIDAVIT
317	317	NOT LATER THAN THE 30TH DAY AFTER THE DATE THIS NOTICE WAS SENT TO
318	318	YOU. IF THE ORIGINAL CONTRACT HAS BEEN TERMINATED OR IF YOU
319	319	COMPLETED YOUR WORK ON OR BEFORE THE DATE THIS NOTICE WAS SENT TO
320	320	YOU, YOU ARE REQUIRED, NOT LATER THAN THE 30TH DAY AFTER THE DATE
321	321	THIS NOTICE WAS SENT TO YOU, TO FILE YOUR LIEN CLAIM AFFIDAVIT FOR
322	322	ANY CLAIMS YOU HAVE NOT INCLUDED IN A LIEN CLAIM AFFIDAVIT YOU HAVE
323	323	PREVIOUSLY FILED OR YOU MAY LOSE ANY STATUTORY LIEN RIGHTS THAT YOU
324	324	HAVE NOT PREVIOUSLY PERFECTED.
325	325	"IF THE ORIGINAL CONTRACT IS NOT TERMINATED OR YOU HAVE NOT
326	326	COMPLETED YOUR WORK, THE DEADLINE TO FILE YOUR LIEN CLAIM AFFIDAVIT
327	327	IS PROVIDED BY SECTION 53.052(a) OR (b), PROPERTY CODE."
328	328	SECTION 12. The heading to Section 53.054, Property Code,
329	329	is amended to read as follows:
330	330	Sec. 53.054. CONTENTS OF LIEN CLAIM AFFIDAVIT.
331	331	SECTION 13. Sections 53.054(a) and (c), Property Code, are
332	332	amended to read as follows:
333	333	(a) The lien claim affidavit must be signed by the person
334	334	claiming the lien or by another person on the claimant's behalf and
335	335	must contain substantially:
336	336	(1) a sworn statement of the amount of the claim;
337	337	(2) the name and last known address of the owner or
338	338	reputed owner;
339	339	(3) a general statement of the kind of work done and
340	340	materials furnished by the claimant [and, for a claimant other than
341	341	an original contractor, a statement of each month in which the work
342	342	was done and materials furnished for which payment is requested];
343	343	(4) the name and last known address of the person by
344	344	whom the claimant was employed or to whom the claimant furnished the
345	345	materials or labor;
346	346	(5) the name and last known address of the original
347	347	contractor;
348	348	(6) a description, legally sufficient for
349	349	identification, of the property sought to be charged with the lien;
350	350	(7) the claimant's name, mailing address, and, if
351	351	different, physical address; and
352	352	(8) for a claimant other than an original contractor,
353	353	a statement identifying the date each notice of furnishing or
354	354	notice of unpaid balance, as applicable, [the claim] was given
355	355	[sent] to the owner or reputed owner [and the method by which the
356	356	notice was sent].
357	357	(c) The affidavit is not required to set forth individual
358	358	items of work done or material furnished or specially fabricated.
359	359	The affidavit may use any broad descriptive terms, abbreviations,
360	360	or symbols customary in the trade to describe the work done or
361	361	material furnished.
362	362	SECTION 14. Section 53.055, Property Code, is amended to
363	363	read as follows:
364	364	Sec. 53.055. NOTICE OF FILED LIEN CLAIM AFFIDAVIT. (a) A
365	365	person who files a lien claim [an] affidavit must send a copy of the
366	366	affidavit by registered or certified mail to the owner or reputed
367	367	owner at the owner's last known business or residence address or
368	368	post a copy on the lien website not later than the 10th [fifth] day
369	369	after the date the affidavit is filed with the county clerk.
370	370	(b) If the person is not an original contractor, and the
371	371	person has not posted a copy of the affidavit on the lien website
372	372	under Subsection (a), the person must also send a copy of the
373	373	affidavit to the original contractor at the original contractor's
374	374	last known business or residence address in [within] the same
375	375	manner and time that the affidavit must be sent to the owner or
376	376	reputed owner under Subsection (a) [period].
377	377	SECTION 15. Subchapter C, Chapter 53, Property Code, is
378	378	amended by adding Sections 53.0561, 53.0562, 53.0563, and 53.059 to
379	379	read as follows:
380	380	Sec. 53.0561. NOTICE OF FURNISHING. (a) Except as provided
381	381	by Section 53.0563:
382	382	(1) a person who contracts with a person other than the
383	383	owner and who has a lien as an original contractor under Section
384	384	53.026(a) must give a notice of furnishing to the owner or reputed
385	385	owner for the lien to be valid; and
386	386	(2) a person other than an original contractor must
387	387	give a notice of furnishing to the owner or reputed owner and the
388	388	original contractor for the lien to be valid.
389	389	(b) The notice of furnishing must include:
390	390	(1) a general description of the labor or material
391	391	furnished or to be furnished by the person giving the notice of
392	392	furnishing and, for specially fabricated material, a separate
393	393	description of the specially fabricated material, that may include
394	394	a list of individual items of work or material or use terms,
395	395	abbreviations, or symbols customary in the trade;
396	396	(2) the name, address, and telephone number of the
397	397	person giving the notice of furnishing;
398	398	(3) the e-mail address of the person giving the notice
399	399	of furnishing, if the person wants to receive notices of postings on
400	400	the lien website;
401	401	(4) the name, address, and telephone number of the
402	402	person with whom the person giving the notice of furnishing
403	403	contracted to furnish the labor or material; and
404	404	(5) a conspicuous statement in bold type as follows:
405	405	"THIS IS NOT A LIEN OR A CLAIM FOR A LIEN. THIS IS ONLY A
406	406	NOTICE TO THE OWNER THAT A SUBCONTRACTOR IS FURNISHING OR INTENDS TO
407	407	FURNISH LABOR OR MATERIAL TO THE PROJECT. THIS NOTICE IS REQUIRED TO
408	408	PRESERVE THE SUBCONTRACTOR'S LIEN RIGHTS UNDER CHAPTER 53, PROPERTY
409	409	CODE."
410	410	(c) Except as provided by Subsection (d), the notice of
411	411	furnishing does not preserve a lien right for labor performed or
412	412	material furnished or specially fabricated earlier than 60 days
413	413	before the date the notice is provided as required by this section.
414	414	(d) If the owner has filed and posted a notice of
415	415	commencement under Section 53.125 before the subcontractor begins
416	416	performing labor or furnishing or specially fabricating material,
417	417	the notice of furnishing does not preserve a lien right for labor
418	418	performed or material furnished or specially fabricated by the
419	419	subcontractor earlier than 30 days before the date the notice of
420	420	furnishing is provided.
421	421	(e) Only one notice of furnishing to an owner or reputed
422	422	owner is required for all labor or material furnished or to be
423	423	furnished by each subcontractor. If a subcontractor contracts to
424	424	perform work for the improvement of the owner's property under more
425	425	than one original contract, the subcontractor must identify each
426	426	original contract in the notice of furnishing or must furnish
427	427	separate notices of furnishing for each original contract.
428	428	(f) The notice of furnishing is not invalid if, after the
429	429	date of the notice, the subcontractor furnishes labor or material
430	430	that is not within the scope of the notice's general description of
431	431	the labor and material furnished or to be furnished.
432	432	(g) A notice of furnishing that does not include the
433	433	subcontractor's e-mail address is not invalid.
434	434	Sec. 53.0562. NOTICE OF NONPAYMENT. (a) Except as provided
435	435	by Subsection (b), a subcontractor may give an owner or reputed
436	436	owner a notice of nonpayment for any amount of a payment request
437	437	that remains unpaid for at least 60 days after the date the
438	438	subcontractor gives the payment request.
439	439	(b) A notice of nonpayment is not effective for the unpaid
440	440	amount of a payment request that is contractual retainage, provided
441	441	that the contractual retainage does not exceed 10 percent of the
442	442	amount of the payment request.
443	443	(c) Except as provided by Subsection (d), an owner is liable
444	444	and the owner's property is subject to a lien by the subcontractor
445	445	under Section 53.0841(b)(3) after the owner is given the notice of
446	446	nonpayment.
447	447	(d) An owner is not liable and the owner's property is not
448	448	subject to a lien as provided by Subsection (c) if the subcontractor
449	449	gives the notice of nonpayment earlier than the 60th day after the
450	450	date the subcontractor gave a payment request, a part of which
451	451	remains unpaid, to the person to whom the subcontractor furnished
452	452	the subcontractor's work.
453	453	(e) A subcontractor who gives a notice of nonpayment must
454	454	give a copy of the notice to:
455	455	(1) the original contractor; and
456	456	(2) if the subcontractor did not contract for the
457	457	subcontractor's work with the original contractor, the person to
458	458	whom the subcontractor furnished the subcontractor's work.
459	459	(f) Failure by a subcontractor to give a notice of
460	460	nonpayment does not limit an owner's liability under Sections
461	461	53.0841(b)(1) and (2).
462	462	(g) A copy of a statement or bill in the usual and customary
463	463	form is sufficient as notice under this section.
464	464	Sec. 53.0563. NOTICE OF UNPAID BALANCE. (a) Sections
465	465	53.0561 and 53.125 do not apply, and a claimant must give the notice
466	466	described by Subsection (b) in writing, if:
467	467	(1) the claimant is an employee of an original
468	468	contractor or a subcontractor and personally labored in the
469	469	construction or repair of the improvement, and the claimant's claim
470	470	is for wages for the personal labor furnished; or
471	471	(2) the improvement is a house of not more than four
472	472	self-contained units intended for residential purposes on a single
473	473	lot or tract of land, or related land development activity on the
474	474	lot or tract necessary for the development of the house.
475	475	(b) Except as provided by this subsection, the claimant must
476	476	give the owner or reputed owner, with a copy to the original
477	477	contractor, a notice of the unpaid balance not later than the 15th
478	478	day of the third month following each month in which all or part of
479	479	the labor was performed, material was furnished, or material was
480	480	specially fabricated by the claimant. For residential construction
481	481	projects governed by Subchapter K, the claimant must give the
482	482	notice of unpaid balance not later than the 15th day of the second
483	483	month following each month in which all or part of the labor was
484	484	performed, material was furnished, or material was specially
485	485	fabricated by the claimant.
486	486	(c) A notice under this section is not required for the
487	487	unpaid amount of a payment request that is contractual retainage.
488	488	(d) A copy of a statement or bill in the usual and customary
489	489	form is sufficient as notice under this section.
490	490	Sec. 53.059. NOTICE OF COMPLETION OR TERMINATION. (a) If
491	491	an owner has filed and posted on the lien website a notice of
492	492	commencement under Section 53.125 and the work under an original
493	493	contract has been completed or the original contract has been
494	494	terminated, the owner may file with the county clerk of the county
495	495	in which the owner's property is located a notice of completion or
496	496	termination, as applicable, and post the notice on the lien
497	497	website. The notice must contain:
498	498	(1) the name and address of the owner;
499	499	(2) the name and address of each original contractor
500	500	covered by the notice;
501	501	(3) a description, legally sufficient for
502	502	identification, of the real property on which the improvements are
503	503	located;
504	504	(4) a description of the work furnished under an
505	505	original contract covered by the notice;
506	506	(5) a statement that the work under an original
507	507	contract covered by the notice has been completed or that the
508	508	original contract was terminated; and
509	509	(6) the date of the completion or termination.
510	510	(b) Not later than the 10th day after the notice of
511	511	completion or termination is filed with the county clerk and posted
512	512	on the lien website as provided by Subsection (a), the owner must
513	513	send a copy of the notice:
514	514	(1) to each original contractor identified in the
515	515	notice; and
516	516	(2) by e-mail to each person who has provided a notice
517	517	of furnishing to the owner and has provided an e-mail address to the
518	518	owner.
519	519	(c) For purposes of Section 53.052, the later of the date
520	520	the notice of completion or termination is filed or the date the
521	521	notice is posted on the lien website is considered the date the work
522	522	under an original contract identified in the notice is completed or
523	523	the original contract is terminated, as applicable. This
524	524	subsection does not apply to a person to whom the notice of
525	525	completion or termination was not sent as required by this section.
526	526	(d) Except as provided by Subsection (e), the notice of
527	527	completion must contain the following statement in bold type in all
528	528	capital letters:
529	529	"A CLAIMANT WILL LOSE THE RIGHT TO PERFECT A LIEN IF THE
530	530	CLAIMANT DOES NOT FILE A LIEN CLAIM AFFIDAVIT ON OR BEFORE THE 15TH
531	531	DAY OF THE FOURTH MONTH AFTER THE DATE OF COMPLETION OF THE WORK."
532	532	(e) The notice of completion for a residential construction
533	533	project must contain the following statement in bold type in all
534	534	capital letters:
535	535	"A CLAIMANT WILL LOSE THE RIGHT TO PERFECT A LIEN IF THE
536	536	CLAIMANT DOES NOT FILE A LIEN CLAIM AFFIDAVIT ON OR BEFORE THE 15TH
537	537	DAY OF THE THIRD MONTH AFTER THE DATE OF COMPLETION OF THE WORK."
538	538	SECTION 16. Section 53.081, Property Code, is amended to
539	539	read as follows:
540	540	Sec. 53.081. AUTHORITY TO WITHHOLD FUNDS FOR BENEFIT OF
541	541	CLAIMANTS. [(a)] If a lien claim affidavit is filed by a
542	542	subcontractor or if an owner receives notice under Section 53.055
543	543	or 53.0563 [53.056, 53.057, 53.058, 53.252, or 53.253], the owner
544	544	may withhold from payments due or to become due to the original
545	545	contractor an amount necessary to pay the claim for which the owner
546	546	[he] receives notice or that is stated in the lien claim affidavit.
547	547	[(b) If notice is sent in a form that substantially complies
548	548	with Section 53.056 or 53.252, the owner may withhold the funds
549	549	immediately on receipt of the notice.
550	550	[(c) If notice is sent under Section 53.057, the owner may
551	551	withhold funds immediately on receipt of a copy of the claimant's
552	552	affidavit prepared in accordance with Sections 53.052 through
553	553	53.055.
554	554	[(d) If notice is sent under Section 53.058, the owner may
555	555	withhold funds immediately on receipt of the notices sent under
556	556	Subsection (e) of that section. If notice is sent as provided by
557	557	Section 53.253(b), the owner may withhold funds immediately on
558	558	receipt of the notice sent as required by Section 53.252.]
559	559	SECTION 17. Section 53.082, Property Code, is amended to
560	560	read as follows:
561	561	Sec. 53.082. TIME FOR WHICH FUNDS ARE WITHHELD. An owner
562	562	may retain funds under Section 53.081 until:
563	563	(1) the time for filing a lien claim affidavit has
564	564	passed;
565	565	(2) [Unless] payment is made under Section 53.0831;
566	566	(3) [53.083 or] the claim is otherwise settled or [,]
567	567	discharged [, indemnified against] under Section 53.157; or
568	568	(4) the claim is [Subchapter H or I, or] determined to
569	569	be invalid by a final judgment of a court [, the owner shall retain
570	570	the funds withheld until:
571	571	[(1) the time for filing the affidavit of mechanic's
572	572	lien has passed; or
573	573	[(2) if a lien affidavit has been filed, until the lien
574	574	claim has been satisfied or released].
575	575	SECTION 18. Subchapter D, Chapter 53, Property Code, is
576	576	amended by adding Sections 53.0831 and 53.0841 to read as follows:
577	577	Sec. 53.0831. DEMAND FOR NOTICE OF DISPUTE; PAYMENT OF
578	578	CLAIM. (a) An owner against whom a lien claim affidavit is filed by
579	579	a claimant other than an original contractor may send to the
580	580	original contractor and to any person identified by the claimant as
581	581	required by Section 53.054(a)(4) a written demand to receive notice
582	582	of whether the original contractor or the person intends to dispute
583	583	the claim.
584	584	(b) An owner must send a copy of the lien claim affidavit
585	585	with a written demand sent under Subsection (a).
586	586	(c) The owner may pay a claim when the claim becomes due if
587	587	the owner:
588	588	(1) sends the written demand and copy of the lien claim
589	589	affidavit as provided by this section; and
590	590	(2) does not, before the 30th day after the date the
591	591	demand is received, receive written notice from the original
592	592	contractor or the person of the intent to dispute the claim.
593	593	Sec. 53.0841. LIABILITY FOR LIENS. (a) Except as provided
594	594	by Subsections (b) and (c), if a claim has been reduced to final
595	595	judgment, the owner is liable and the owner's property is subject to
596	596	a claim for the contract price minus any amounts paid to the
597	597	original contractor.
598	598	(b) In addition to the liability under Subsection (a), the
599	599	owner's liability and the owner's property subject to the amount of
600	600	the lien by a subcontractor is the sum of:
601	601	(1) the greater of:
602	602	(A) 10 percent of the value of the contract price
603	603	of the work to the owner; or
604	604	(B) 10 percent of the value of the work, measured
605	605	by the proportion that the work done bears to the work to be done,
606	606	using the contract price or, if there is no contract price, using
607	607	the reasonable value of the completed work;
608	608	(2) any money paid to the original contractor after
609	609	the owner was authorized to withhold funds under this subchapter;
610	610	and
611	611	(3) for a subcontractor who gives notice under Section
612	612	53.0562, any money paid to the original contractor after the notice
613	613	is given.
614	614	(c) In addition to the liability under Subsections (a) and
615	615	(b), an owner is personally liable for an award of costs and
616	616	attorney's fees under Section 53.156.
617	617	(d) An owner's personal liability is not affected by a
618	618	subsequent foreclosure or other transfer of the owner's interest in
619	619	all or part of the property.
620	620	(e) Subject to Section 53.122(b), the aggregate amount of
621	621	liens of the original contractor and the subcontractors, including
622	622	liens of employees as described by Section 53.0563(a)(1), may not
623	623	exceed the contract price of the original contract, as may be
624	624	modified, for the work. Duplicated claims asserted by claimants
625	625	within the same chain of contract may not be added more than once in
626	626	determining the aggregate amount of liens.
627	627	(f) A purchaser of property subject to a lien claim under
628	628	this chapter is not personally liable for the lien claim in a
629	629	foreclosure action brought by a claimant, except the purchaser may
630	630	be held liable for costs and attorney's fees awarded under Section
631	631	53.156.
632	632	SECTION 19. The heading to Section 53.085, Property Code,
633	633	is amended to read as follows:
634	634	Sec. 53.085. BILLS-PAID AFFIDAVIT REQUIRED.
635	635	SECTION 20. Sections 53.085(a), (b), (c), and (d), Property
636	636	Code, are amended to read as follows:
637	637	(a) Any person who performs work [furnishes labor or
638	638	materials for the construction of improvements on real property]
639	639	shall, if requested and as a condition of payment for such work
640	640	[labor or materials], provide to the requesting party, or the
641	641	party's agent, a bills-paid [an] affidavit acknowledging the amount
642	642	claimed for payment and stating that the person has paid each of the
643	643	person's subcontractors, laborers, or materialmen in full for all
644	644	labor and materials provided to the person for the construction or
645	645	repair. In the event, however, that the person has not paid each of
646	646	the person's subcontractors, laborers, or materialmen in full, the
647	647	person shall state in the affidavit the amount owed and the name
648	648	and, if known, the address and telephone number of each
649	649	subcontractor, laborer, or materialman to whom the payment is owed.
650	650	(b) The seller of any real property shall, upon request by
651	651	the purchaser or the purchaser's agent prior to closing of the
652	652	purchase of the real property, provide to the purchaser or the
653	653	purchaser's agent, a written affidavit stating that the seller has
654	654	paid each of the seller's contractors, laborers, or materialmen in
655	655	full for all labor done and materials provided to the seller through
656	656	the date specified in the affidavit for any construction or repair
657	657	of improvements on the real property and that the seller is not
658	658	indebted to any person, firm, or corporation by reason of any such
659	659	construction or repair through the date specified in the affidavit.
660	660	In the event that the seller has not paid each of the seller's
661	661	contractors, laborers, or materialmen in full for labor done and
662	662	material provided through the date specified in the affidavit, the
663	663	seller shall state in the affidavit the amount owed and the name
664	664	and, if known, the address and telephone number of each contractor,
665	665	laborer, or materialman to whom the payment is owed.
666	666	(c) The affidavit may include:
667	667	(1) a waiver or release of lien rights or payment bond
668	668	claims by the affiant that is conditioned on the receipt of actual
669	669	payment or collection of funds when payment is made by check or
670	670	draft, as provided by Subchapter L;
671	671	(2) a warranty or representation that certain bills or
672	672	classes of bills will be paid by the affiant from funds paid in
673	673	reliance on the affidavit and an identification of the specific
674	674	bills that the affiant will not pay from the fund; and
675	675	(3) an indemnification by the affiant for any loss or
676	676	expense resulting from false or incorrect information in the
677	677	affidavit.
678	678	(d) A person, including a seller, commits an offense if the
679	679	person intentionally, knowingly, or recklessly makes a false or
680	680	misleading statement in an affidavit under this section. An
681	681	offense under this section is a misdemeanor. A person adjudged
682	682	guilty of an offense under this section shall be punished by a fine
683	683	not to exceed $4,000 or confinement in jail for a term not to exceed
684	684	one year or both a fine and confinement. [A person may not receive
685	685	community supervision for the offense.]
686	686	SECTION 21. Section 53.122(a), Property Code, is amended to
687	687	read as follows:
688	688	(a) Perfected [Except as provided by Subchapter E and
689	689	Section 53.124(e), perfected] mechanic's liens that have the same
690	690	inception date are on equal footing without reference to the date of
691	691	filing the lien claim affidavit [claiming the lien].
692	692	SECTION 22. Section 53.124, Property Code, is amended by
693	693	amending Subsections (a), (b), (c), (d), and (e) and adding
694	694	Subsection (f) to read as follows:
695	695	(a) Except as provided by Subsection (c) or (e), for
696	696	purposes of Section 53.123, the time of inception of a mechanic's
697	697	lien is the commencement of construction or repair of improvements
698	698	or delivery of materials to the land on which the improvements are
699	699	to be located and on which the materials are to be used.
700	700	(b) The construction, repair, or materials under Subsection
701	701	(a) must be visible from inspection of the land on which the
702	702	improvements are being made.
703	703	(c) The later of the date the notice of commencement is
704	704	filed or is posted on the lien website is the time of inception of a
705	705	mechanic's lien for the work or material described by the notice
706	706	that is performed or furnished on or after the later of the date the
707	707	notice is filed or posted. For work performed or material furnished
708	708	before the date a notice of commencement is filed and posted and for
709	709	work excluded by the notice of commencement, the time of inception
710	710	of a mechanic's lien is provided by Subsection (a). For work under
711	711	an original contract entered into after a notice of completion is
712	712	filed and posted under Section 53.059, the time of inception of a
713	713	mechanic's lien is the date provided by Subsection (a) or the date a
714	714	new notice of commencement is filed and posted. [An owner and
715	715	original contractor may jointly file an affidavit of commencement
716	716	with the county clerk of the county in which the land is located not
717	717	later than the 30th day after the date of actual commencement of
718	718	construction of the improvements or delivery of materials to the
719	719	land. The affidavit must contain:
720	720	[(1) the name and address of the owner;
721	721	[(2) the name and address of each original contractor,
722	722	known at the time to the owner, that is furnishing labor, service,
723	723	or materials for the construction of the improvements;
724	724	[(3) a description, legally sufficient for
725	725	identification, of the property being improved;
726	726	[(4) the date the work actually commenced; and
727	727	[(5) a general description of the improvement.]
728	728	(d) A lien, encumbrance, or mortgage securing an interest in
729	729	the land that is filed with the county clerk on or before the date
730	730	the notice of commencement is filed has priority over a mechanic's
731	731	lien with a time of inception that is the date of the notice of
732	732	commencement, regardless of the order in which the notice of
733	733	commencement and lien, encumbrance, or mortgage are filed with the
734	734	county clerk. [An affidavit filed in compliance with this section
735	735	is prima facie evidence of the date of the commencement of the
736	736	improvement described in the affidavit. The time of inception of a
737	737	mechanic's lien arising from work described in an affidavit of
738	738	commencement is the date of commencement of the work stated in the
739	739	affidavit.]
740	740	(e) The time of inception of a lien that is created under
741	741	Section 53.021(c)[, (d), or (e)] is the date of recording of a lien
742	742	claim [an] affidavit [of lien] under Section 53.052. The priority
743	743	of a lien claimed by a person entitled to a lien under Section
744	744	53.021(c)[, (d), or (e)] with respect to other mechanic's liens is
745	745	determined by the date of recording. A lien created under Section
746	746	53.021(c)[, (d), or (e)] is not valid or enforceable against a
747	747	grantee or purchaser who acquires an interest in the real property
748	748	before the time of inception of the lien.
749	749	(f) Unless the landscaping work for which a person may have
750	750	a lien under Section 53.021(d) or the demolition services for which
751	751	a person may have a lien under Section 53.021(e) are included in a
752	752	notice of commencement, the time of inception of a lien under
753	753	Section 53.021(d) or (e) is the date of recording of a lien claim
754	754	affidavit under Section 53.052, and priority is determined by the
755	755	date of recording. Except as provided by this subsection, a lien
756	756	created under Section 53.021(d) or (e) is not valid against a
757	757	grantee or purchaser who acquires an interest in the real property
758	758	before the time of inception of the lien.
759	759	SECTION 23. Subchapter F, Chapter 53, Property Code, is
760	760	amended by adding Section 53.125 to read as follows:
761	761	Sec. 53.125. NOTICE OF COMMENCEMENT. (a) An owner may file
762	762	a notice of commencement with the county clerk of the county in
763	763	which the real property being improved under an original contract
764	764	is located. An owner who elects to file a notice of commencement
765	765	must post the notice on the lien website. A notice under this
766	766	section must be acknowledged and be in a form that substantially
767	767	complies with the following:
768	768	"NOTICE OF COMMENCEMENT
769	769	"Improvements will be made to certain real property, and in
770	770	accordance with Chapter 53, Property Code, the following
771	771	information is provided by this notice of commencement:
772	772	"(1) Legal description and, if applicable, street
773	773	address of property: _______________.
774	774	"(2) Project name and brief description of work to be
775	775	performed or materials to be furnished: _______________.
776	776	"(3) Work or materials not included in this notice of
777	777	commencement: _______________.
778	778	"(4) Owner information or lessee information if the
779	779	lessee contracted for the work:
780	780	(A) Name and address: _______________.
781	781	(B) Interest in property (check appropriate
782	782	box):
783	783	□ Fee simple title
784	784	□ Lease
785	785	□ Other (explain): _______________.
786	786	(C) Name and address of fee simple titleholder to
787	787	property (if different from owner listed above): _______________.
788	788	"(5) Original contractor(s) for work or designated
789	789	portions of the work (repeat as necessary):
790	790	(A) Name and address: _______________.
791	791	(B) Contractor's phone number: _______________.
792	792	"(6) Surety or sureties for original contractor (if
793	793	applicable, a copy of the payment bond is attached):
794	794	(A) Name and address: _______________.
795	795	(B) Phone number: _______________.
796	796	"(7) Lender(s) providing financing for the work that
797	797	is securing a mortgage on or a security interest in the property
798	798	(repeat as necessary):
799	799	(A) Name and address: _______________.
800	800	(B) Lender's phone number: _______________.
801	801	"(8) Secretary of state's lien website address:
802	802	_______________.
803	803	"Date: ______________
804	804	"_____________ (Owner name)
805	805	"By:_______________ (Signature)
806	806	"(Insert acknowledgment)."
807	807	(b) Incorrect information contained in the notice of
808	808	commencement furnished by an owner does not adversely affect the
809	809	rights of a lien claimant reasonably relying on the information
810	810	against the owner or the property of the owner. If a subcontractor
811	811	performs labor or furnishes materials or specially fabricated
812	812	materials described by the notice of commencement and the notice of
813	813	commencement does not identify the original contractor under which
814	814	the labor was performed or materials were furnished or specially
815	815	fabricated at the time the subcontractor first performs the labor
816	816	or furnishes or specially fabricates the materials, the notice of
817	817	furnishing by the subcontractor preserves the lien claimant's
818	818	rights for the period provided by Section 53.0561(c).
819	819	(c) The owner shall send a copy of the notice of
820	820	commencement to each subcontractor not later than the fifth day
821	821	after the date the owner receives a written request for a copy from
822	822	the subcontractor, unless the subcontractor has received a physical
823	823	copy of the notice.
824	824	(d) Unless a notice of commencement has been filed and
825	825	posted under this section, a subcontractor who has not received a
826	826	physical copy of the notice may request in writing a copy from the
827	827	original contractor or a subcontractor with whom the requesting
828	828	subcontractor has privity of contract. If the original contractor
829	829	or subcontractor has a copy of the notice, the original contractor
830	830	or subcontractor shall send a copy of the notice to the requesting
831	831	subcontractor not later than the fifth day after the date of receipt
832	832	of the written request. If the requesting subcontractor does not
833	833	receive a copy of the notice as required by this section, the person
834	834	failing to send the copy under this subsection is liable to the
835	835	requesting subcontractor for all actual expenses reasonably
836	836	incurred by the requesting subcontractor in obtaining the
837	837	information that would have been contained in the notice.
838	838	(e) A notice of commencement posted on the lien website may
839	839	be amended by the owner by posting the amended notice on the lien
840	840	website. The effective date of the amended notice is the date the
841	841	amended notice is posted on the lien website. The owner shall send
842	842	notice of the amended notice to a person who has provided a notice
843	843	of furnishing to the owner before the effective date of the amended
844	844	notice of commencement.
845	845	SECTION 24. Section 53.151(b), Property Code, is amended to
846	846	read as follows:
847	847	(b) A surety issuing a payment bond or performance bond in
848	848	connection with the work [improvements] has a priority claim over
849	849	other creditors of its principal to contract funds to the extent of
850	850	any loss it suffers or incurs. That priority does not excuse the
851	851	surety from paying any obligations that it may have under its
852	852	payment bonds.
853	853	SECTION 25. Section 53.153(a), Property Code, is amended to
854	854	read as follows:
855	855	(a) If a lien claim [an] affidavit [claiming a mechanic's
856	856	lien] is filed by a person other than the original contractor, the
857	857	original contractor shall defend at the original contractor's [his]
858	858	own expense a suit brought on the claim unless the owner is in
859	859	breach of the owner's contractual obligations to the original
860	860	contractor under the original contract.
861	861	SECTION 26. Section 53.154, Property Code, is amended to
862	862	read as follows:
863	863	Sec. 53.154. FORECLOSURE. (a) A mechanic's lien may be
864	864	foreclosed only on judgment of a court of competent jurisdiction
865	865	foreclosing the lien and ordering the sale of the property subject
866	866	to the lien.
867	867	(b) A suit to foreclose the lien must be brought in a court
868	868	of competent jurisdiction in the county in which the real property
869	869	that is subject to the lien is located.
870	870	SECTION 27. Section 53.157, Property Code, is amended to
871	871	read as follows:
872	872	Sec. 53.157. DISCHARGE OF LIEN. A lien claim [mechanic's
873	873	lien or] affidavit [claiming a mechanic's lien] filed under Section
874	874	53.052 may be discharged of record by:
875	875	(1) recording a lien release signed by the claimant
876	876	under Section 53.152;
877	877	(2) failing to institute suit to foreclose the lien
878	878	[in the county in which the property is located] within the period
879	879	prescribed by Section 53.158, 53.175, or 53.208;
880	880	(3) recording the original or certified copy of a
881	881	final judgment or decree of a court of competent jurisdiction
882	882	providing for the discharge;
883	883	(4) filing the bond and notice in compliance with
884	884	Subchapter H;
885	885	(5) filing the bond in compliance with Subchapter I;
886	886	or
887	887	(6) recording a certified copy of the order removing
888	888	the lien under Section 53.160 and a certificate from the clerk of
889	889	the court that states that no bond or deposit as described by
890	890	Section 53.161 was filed by the claimant within 30 days after the
891	891	date the order was entered.
892	892	SECTION 28. Section 53.158, Property Code, is amended to
893	893	read as follows:
894	894	Sec. 53.158. PERIOD FOR BRINGING SUIT TO FORECLOSE LIEN.
895	895	(a) Except as provided by Subsection (b), suit must be brought to
896	896	foreclose the lien not later than the first anniversary of [within
897	897	two years after] the last date [day] a claimant may file the lien
898	898	claim affidavit under Section 53.052 [or within one year after
899	899	completion, termination, or abandonment of the work under the
900	900	original contract under which the lien is claimed, whichever is
901	901	later].
902	902	(b) The period of limitations under Subsection (a) may be
903	903	extended to not later than the second anniversary of the last date
904	904	the claimant may file the affidavit if the claimant enters into a
905	905	written agreement with the then-current record owner of the
906	906	property to extend the period and files the written agreement with
907	907	the clerk of the county in which all or part of the property is
908	908	located before the expiration of the period provided by Subsection
909	909	(a). [For a claim arising from a residential construction project,
910	910	suit must be brought to foreclose the lien within one year after the
911	911	last day a claimant may file a lien affidavit under Section 53.052
912	912	or within one year after completion, termination, or abandonment of
913	913	the work under the original contract under which the lien is
914	914	claimed, whichever is later.]
915	915	SECTION 29. Sections 53.159(a), (b), (c), (d), and (f),
916	916	Property Code, are amended to read as follows:
917	917	(a) If a notice of commencement has not been filed and
918	918	posted under Section 53.125, an [An] owner, on written request,
919	919	shall furnish the following information within a reasonable time,
920	920	but not later than the 10th day after the date the request is
921	921	received, to any person furnishing labor or materials for the
922	922	project:
923	923	(1) a description of the real property being improved
924	924	legally sufficient to identify it;
925	925	(2) whether there is a surety bond and if so, the name
926	926	and last known address of the surety and a copy of the bond;
927	927	(3) whether there are any prior recorded liens or
928	928	security interests on the real property being improved and if so,
929	929	the name and address of the person having the lien or security
930	930	interest; and
931	931	(4) the date on which the original contract for the
932	932	project was executed.
933	933	(b) If a notice of commencement has not been filed and
934	934	posted under Section 53.125, an [An] original contractor, on
935	935	written request by a person who furnished work under the original
936	936	contract, shall furnish to the person the following information
937	937	within a reasonable time, but not later than the 10th day after the
938	938	date the request is received:
939	939	(1) the name and last known address of the person to
940	940	whom the original contractor furnished labor or materials for the
941	941	construction project;
942	942	(2) whether the original contractor has furnished or
943	943	has been furnished a payment bond for any of the work on the
944	944	construction project and if so, the name and last known address of
945	945	the surety and a copy of the bond; and
946	946	(3) the date on which the original contract for the
947	947	project was executed.
948	948	(c) A subcontractor, on written request by an owner of the
949	949	property being improved, the original contractor, a surety on a
950	950	bond covering the original contract, or any person furnishing work
951	951	under the subcontract, shall furnish to the person the following
952	952	information within a reasonable time, but not later than the 10th
953	953	day after the date the request is received:
954	954	(1) the name and last known address of each person from
955	955	whom the subcontractor purchased labor or materials for the
956	956	construction project, other than those materials that were
957	957	furnished to the project from the subcontractor's inventory;
958	958	(2) the name and last known address of each person to
959	959	whom the subcontractor furnished labor or materials for the
960	960	construction project; [and]
961	961	(3) whether the subcontractor has furnished or has
962	962	been furnished a payment bond for any of the work on the
963	963	construction project and if so, the name and last known address of
964	964	the surety and a copy of the bond; and
965	965	(4) the date the subcontractor first performed labor,
966	966	furnished materials, or furnished specially fabricated materials
967	967	for the construction project for which any claim for payment is
968	968	being sought.
969	969	(d) Not later than the 30th day after the date a written
970	970	request is received from the owner, the contractor under whom a
971	971	claim of lien or under whom a bond is made, or a surety on a bond on
972	972	which a claim is made, a claimant for a lien or under a bond shall
973	973	furnish to the requesting person a copy of any applicable written
974	974	agreement, purchase order, or contract and any billing, statement,
975	975	or payment request of the claimant reflecting the amount claimed
976	976	and the work performed by the claimant for which the claim is made.
977	977	[If requested, the claimant shall provide the estimated amount due
978	978	for each calendar month in which the claimant has performed labor or
979	979	furnished materials.]
980	980	(f) A person, other than a claimant requested to furnish
981	981	information under Subsection (d), who fails to furnish information
982	982	as required by this section not posted on the lien website is liable
983	983	to the requesting person for that person's reasonable and necessary
984	984	costs incurred in procuring the requested information.
985	985	SECTION 30. Sections 53.160(b), (c), and (d), Property
986	986	Code, are amended to read as follows:
987	987	(b) The grounds for objecting to the validity or
988	988	enforceability of the claim or lien for purposes of the motion are
989	989	limited to the following:
990	990	(1) notice of furnishing or notice of unpaid balance
991	991	[claim] was not furnished to the owner or original contractor as
992	992	required by Section 53.0561 or 53.0563 [53.056, 53.057, 53.058,
993	993	53.252, or 53.253];
994	994	(2) a lien claim [an] affidavit [claiming a lien]
995	995	failed to comply with Section 53.054 or was not filed as required by
996	996	Section 53.052;
997	997	(3) notice of the filed lien claim affidavit was not
998	998	furnished to the owner or original contractor as required by
999	999	Section 53.055 and the owner or original contractor was materially
1000	1000	prejudiced by the violation;
1001	1001	(4) [the deadlines for perfecting a lien claim for
1002	1002	retainage under this chapter have expired and the owner complied
1003	1003	with the requirements of Section 53.101 and paid the retainage and
1004	1004	all other funds owed to the original contractor before:
1005	1005	[(A) the claimant perfected the lien claim; and
1006	1006	[(B) the owner received a notice of the claim as
1007	1007	required by this chapter;
1008	1008	[(5) all funds subject to the notice of a claim to the
1009	1009	owner and a notice regarding the retainage have been deposited in
1010	1010	the registry of the court and the owner has no additional liability
1011	1011	to the claimant;
1012	1012	[(6)] when the lien claim affidavit was filed on
1013	1013	homestead property:
1014	1014	(A) no contract was executed or filed as required
1015	1015	by Section 53.254; or
1016	1016	(B) the lien claim affidavit [claiming a lien]
1017	1017	failed to contain the notice as required by Section 53.254; [or
1018	1018	[(C) the notice of the claim failed to include
1019	1019	the statement required by Section 53.254;] and
1020	1020	(5) [(7)] the claimant executed a valid and
1021	1021	enforceable waiver or release of the claim or lien claimed in the
1022	1022	affidavit.
1023	1023	(c) The claimant is not required to file a response. The
1024	1024	claimant and any other party that has appeared in the proceeding
1025	1025	must be notified not later than the 21st day [by at least 21 days]
1026	1026	before the date of the hearing on the motion. A motion may not be
1027	1027	heard before the 21st day after the date the claimant answers or
1028	1028	appears in the proceeding.
1029	1029	(d) At the hearing on the motion, the burden is on:
1030	1030	(1) the claimant to prove that the notice of a filed
1031	1031	lien claim [and] affidavit was [of lien were] furnished to the
1032	1032	owner, reputed owner, and original contractor as required by
1033	1033	Section 53.055 [this chapter]; and
1034	1034	(2) the movant to establish that the lien should be
1035	1035	removed for any other ground authorized by this section.
1036	1036	SECTION 31. Section 53.161(f), Property Code, is amended to
1037	1037	read as follows:
1038	1038	(f) If the claimant fails to file the bond or the deposit in
1039	1039	lieu of the bond in compliance with this section, the owner may
1040	1040	file:
1041	1041	(1) a certified copy of the order; and
1042	1042	(2) a certificate from the clerk of the court stating
1043	1043	that:
1044	1044	(A) no bond or deposit in lieu of the bond was
1045	1045	filed before the later of:
1046	1046	(i) the 30th day [within 30 days] after the
1047	1047	date the order was entered by the court; or
1048	1048	(ii) the date ordered by the court under
1049	1049	Subsection (b); and
1050	1050	(B) no order staying the order to remove the lien
1051	1051	was entered by the court.
1052	1052	SECTION 32. Section 53.172, Property Code, is amended to
1053	1053	read as follows:
1054	1054	Sec. 53.172. BOND REQUIREMENTS. The bond must:
1055	1055	(1) describe the property on which the liens are
1056	1056	claimed;
1057	1057	(2) refer to each lien claimed in a manner sufficient
1058	1058	to identify it;
1059	1059	(3) be in an amount that is double the amount of the
1060	1060	liens referred to in the bond unless the total amount claimed in the
1061	1061	liens exceeds $60,000 [$40,000], in which case the bond must be in
1062	1062	an amount that is the greater of 1-1/2 times the amount of the liens
1063	1063	or the sum of $60,000 [$40,000] and the amount of the liens;
1064	1064	(4) be payable to the parties claiming the liens;
1065	1065	(5) be executed by:
1066	1066	(A) the party filing the bond as principal; and
1067	1067	(B) a corporate surety authorized and admitted to
1068	1068	do business under the law in this state and licensed by this state
1069	1069	to execute the bond as surety, subject to Section 3503.005,
1070	1070	Insurance Code [1, Chapter 87, Acts of the 56th Legislature,
1071	1071	Regular Session, 1959 (Article 7.19-1, Vernon's Texas Insurance
1072	1072	Code)]; and
1073	1073	(6) be conditioned substantially that the principal
1074	1074	and sureties will pay to the named obligees or to their assignees
1075	1075	the amount that the named obligees would have been entitled to
1076	1076	recover if their claims had been proved to be valid and enforceable
1077	1077	liens on the property.
1078	1078	SECTION 33. Sections 53.173(c) and (d), Property Code, are
1079	1079	amended to read as follows:
1080	1080	(c) The notice:
1081	1081	(1) must be served on each obligee by mailing a copy of
1082	1082	the notice and the bond to the obligee by certified United States
1083	1083	mail, return receipt requested, addressed to the claimant at the
1084	1084	address stated in the lien claim affidavit for the obligee; and
1085	1085	(2) may not be given by posting on the lien website or
1086	1086	by e-mail.
1087	1087	(d) If the claimant's lien claim affidavit does not state
1088	1088	the claimant's address, the notice is not required to be mailed to
1089	1089	the claimant.
1090	1090	SECTION 34. Section 53.201(b), Property Code, is amended to
1091	1091	read as follows:
1092	1092	(b) If a valid bond is filed, a claimant may not file suit
1093	1093	against the owner or the owner's property and the owner is not
1094	1094	authorized to withhold funds or pay a claimant on demand [relieved
1095	1095	of obligations] under Subchapter D [or E].
1096	1096	SECTION 35. Section 53.202, Property Code, is amended to
1097	1097	read as follows:
1098	1098	Sec. 53.202. BOND REQUIREMENTS. The bond must:
1099	1099	(1) be in a penal sum at least equal to the total of the
1100	1100	original contract amount;
1101	1101	(2) be in favor of the owner;
1102	1102	(3) have the written approval of the owner endorsed on
1103	1103	it;
1104	1104	(4) be executed by:
1105	1105	(A) the original contractor as principal; and
1106	1106	(B) a corporate surety authorized and admitted to
1107	1107	do business in this state and licensed by this state to execute
1108	1108	bonds as surety, subject to Section 3503.005, Insurance Code [1,
1109	1109	Chapter 87, Acts of the 56th Legislature, Regular Session, 1959
1110	1110	(Article 7.19-1, Vernon's Texas Insurance Code)];
1111	1111	(5) be conditioned on prompt payment for all labor,
1112	1112	subcontracts, materials, specially fabricated materials, and
1113	1113	normal and usual extras not exceeding 15 percent of the contract
1114	1114	price; and
1115	1115	(6) clearly and prominently display on the bond or on
1116	1116	an attachment to the bond:
1117	1117	(A) the name, mailing address, physical address,
1118	1118	and telephone number, including the area code, of the surety
1119	1119	company to which any notice of claim should be sent; or
1120	1120	(B) the toll-free telephone number maintained by
1121	1121	the Texas Department of Insurance under Subchapter B, Chapter 521,
1122	1122	Insurance Code, and a statement that the address of the surety
1123	1123	company to which any notice of claim should be sent may be obtained
1124	1124	from the Texas Department of Insurance by calling the toll-free
1125	1125	telephone number.
1126	1126	SECTION 36. Sections 53.206(a) and (b), Property Code, are
1127	1127	amended to read as follows:
1128	1128	(a) To perfect a claim against a bond in a manner other than
1129	1129	that prescribed by Subchapter C or K for fixing a lien, a person
1130	1130	must:
1131	1131	(1) give to the original contractor a notice of
1132	1132	furnishing or a notice of unpaid balance, unless the person has
1133	1133	contracted directly with the original contractor [all applicable
1134	1134	notices under the appropriate subchapter]; and
1135	1135	(2) give to the surety on the bond a written notice of
1136	1136	the amount and nature of the claim and a copy of the notice to the
1137	1137	original contractor within the period required for filing a lien
1138	1138	claim affidavit under Section 53.052 [, instead of the owner, all
1139	1139	notices under the appropriate subchapter required to be given to
1140	1140	the owner].
1141	1141	(b) To perfect a claim under this section, a person is not
1142	1142	required to [:
1143	1143	[(1) give notice to the surety under Section 53.057,
1144	1144	unless the claimant has a direct contractual relationship with the
1145	1145	original contractor and the agreed retainage is in excess of 10
1146	1146	percent of the contract;
1147	1147	[(2) give notice to the surety under Section 53.058(b)
1148	1148	or, if the claim relates to a residential construction project,
1149	1149	under Section 53.253(c); or
1150	1150	[(3)] file a lien claim [any] affidavit with the
1151	1151	county clerk.
1152	1152	SECTION 37. Section 53.254(f), Property Code, is amended to
1153	1153	read as follows:
1154	1154	(f) A lien claim [An] affidavit [for lien] filed under this
1155	1155	subchapter that relates to a homestead must contain the following
1156	1156	notice conspicuously printed, stamped, or typed in a size equal to
1157	1157	at least 10-point boldface or the computer equivalent, at the top of
1158	1158	the page:
1159	1159	"NOTICE: THIS IS NOT A LIEN. THIS IS ONLY AN AFFIDAVIT
1160	1160	CLAIMING A LIEN.
1161	1161	"If a subcontractor or supplier who furnishes materials or
1162	1162	performs labor for construction of improvements on your property is
1163	1163	not paid, your property may be subject to a lien for:
1164	1164	(1) the unpaid amount if you fail to withhold payment
1165	1165	to your contractor that is sufficient to cover the unpaid claim
1166	1166	after you receive notice of a filed lien claim affidavit; and
1167	1167	(2) an amount up to 10 percent of the contract price or
1168	1168	10 percent of the value of the work performed by your contractor."
1169	1169	SECTION 38. Section 53.255(b), Property Code, is amended to
1170	1170	read as follows:
1171	1171	(b) The disclosure statement must read substantially
1172	1172	similar to the following:
1173	1173	"KNOW YOUR RIGHTS AND RESPONSIBILITIES UNDER THE LAW. You
1174	1174	are about to enter into a transaction to build a new home or remodel
1175	1175	existing residential property. Texas law requires your contractor
1176	1176	to provide you with this brief overview of some of your rights,
1177	1177	responsibilities, and risks in this transaction.
1178	1178	"CONVEYANCE TO CONTRACTOR NOT REQUIRED. Your contractor may
1179	1179	not require you to convey your real property to your contractor as a
1180	1180	condition to the agreement for the construction of improvements on
1181	1181	your property.
1182	1182	"KNOW YOUR CONTRACTOR. Before you enter into your agreement
1183	1183	for the construction of improvements to your real property, make
1184	1184	sure that you have investigated your contractor. Obtain and verify
1185	1185	references from other people who have used the contractor for the
1186	1186	type and size of construction project on your property.
1187	1187	"GET IT IN WRITING. Make sure that you have a written
1188	1188	agreement with your contractor that includes: (1) a description of
1189	1189	the work the contractor is to perform; (2) the required or
1190	1190	estimated time for completion of the work; (3) the cost of the work
1191	1191	or how the cost will be determined; and (4) the procedure and
1192	1192	method of payment, including [provisions for statutory retainage
1193	1193	and] conditions for final payment. If your contractor made a
1194	1194	promise, warranty, or representation to you concerning the work the
1195	1195	contractor is to perform, make sure that promise, warranty, or
1196	1196	representation is specified in the written agreement. An oral
1197	1197	promise that is not included in the written agreement may not be
1198	1198	enforceable under Texas law.
1199	1199	"READ BEFORE YOU SIGN. Do not sign any document before you
1200	1200	have read and understood it. NEVER SIGN A DOCUMENT THAT INCLUDES AN
1201	1201	UNTRUE STATEMENT. Take your time in reviewing documents. If you
1202	1202	borrow money from a lender to pay for the improvements, you are
1203	1203	entitled to have the loan closing documents furnished to you for
1204	1204	review at least one business day before the closing. Do not waive
1205	1205	this requirement unless a bona fide emergency or another good cause
1206	1206	exists, and make sure you understand the documents before you sign
1207	1207	them. If you fail to comply with the terms of the documents, you
1208	1208	could lose your property. You are entitled to have your own
1209	1209	attorney review any documents. If you have any question about the
1210	1210	meaning of a document, consult an attorney.
1211	1211	"GET A LIST OF SUBCONTRACTORS AND SUPPLIERS. Before
1212	1212	construction commences, your contractor is required to provide you
1213	1213	with a list of the subcontractors and suppliers the contractor
1214	1214	intends to use on your project. Your contractor is required to
1215	1215	supply updated information on any subcontractors and suppliers
1216	1216	added after the list is provided. Your contractor is not required
1217	1217	to supply this information if you sign a written waiver of your
1218	1218	rights to receive this information.
1219	1219	"MONITOR THE WORK. Lenders and governmental authorities may
1220	1220	inspect the work in progress from time to time for their own
1221	1221	purposes. These inspections are not intended as quality control
1222	1222	inspections. Quality control is a matter for you and your
1223	1223	contractor. To ensure that your home is being constructed in
1224	1224	accordance with your wishes and specifications, you should inspect
1225	1225	the work yourself or have your own independent inspector review the
1226	1226	work in progress.
1227	1227	"MONITOR PAYMENTS. If you use a lender, your lender is
1228	1228	required to provide you with a periodic statement showing the money
1229	1229	disbursed by the lender from the proceeds of your loan. Each time
1230	1230	your contractor requests payment from you or your lender for work
1231	1231	performed, your contractor is also required to furnish you with a
1232	1232	disbursement statement that lists the name and address of each
1233	1233	subcontractor or supplier that the contractor intends to pay from
1234	1234	the requested funds. Review these statements and make sure that the
1235	1235	money is being properly disbursed.
1236	1236	"CLAIMS BY SUBCONTRACTORS AND SUPPLIERS. Under Texas law, if
1237	1237	a subcontractor or supplier who furnishes labor or materials for
1238	1238	the construction of improvements on your property is not paid, you
1239	1239	may be [become] liable and your property may be subject to a lien
1240	1240	for the unpaid amount, even if you have not contracted directly with
1241	1241	the subcontractor or supplier. To minimize your [avoid] liability,
1242	1242	you should take the following actions:
1243	1243	(1) If you receive a written notice from a
1244	1244	subcontractor or supplier, you should withhold payment from your
1245	1245	contractor for the amount of the claim stated in the notice until
1246	1246	the dispute between your contractor and the subcontractor or
1247	1247	supplier is resolved.
1248	1248	(2) If your lender is disbursing money directly to
1249	1249	your contractor, you should immediately provide a copy of the
1250	1250	notice to your lender and instruct the lender to withhold payment in
1251	1251	the amount of the claim stated in the notice. If you continue to pay
1252	1252	the contractor after receiving the written notice without
1253	1253	withholding the amount of the claim, you may be liable and your
1254	1254	property may be subject to a lien for the amount you failed to
1255	1255	withhold.
1256	1256	[(2) During construction and for 30 days after final
1257	1257	completion, termination, or abandonment of the contract by the
1258	1258	contractor, you should withhold or cause your lender to withhold 10
1259	1259	percent of the amount of payments made for the work performed by
1260	1260	your contractor. This is sometimes referred to as "statutory
1261	1261	retainage.' If you choose not to withhold the 10 percent for at
1262	1262	least 30 days after final completion, termination, or abandonment
1263	1263	of the contract by the contractor and if a valid claim is timely
1264	1264	made by a claimant and your contractor fails to pay the claim, you
1265	1265	may be personally liable and your property may be subject to a lien
1266	1266	up to the amount that you failed to withhold.]
1267	1267	"If a claim is not paid within a certain time period, the
1268	1268	claimant is required to file a [mechanic's] lien claim affidavit in
1269	1269	the real property records in the county where the property is
1270	1270	located. A [mechanic's] lien claim affidavit is not a lien on your
1271	1271	property, but the filing of the affidavit could result in a court
1272	1272	imposing a lien on your property if the claimant is successful in
1273	1273	litigation to enforce the lien claim.
1274	1274	"SOME CLAIMS MAY NOT BE VALID. When you receive a written
1275	1275	notice of unpaid balance [a claim] or when a [mechanic's] lien claim
1276	1276	affidavit is filed on your property, you should know your legal
1277	1277	rights and responsibilities regarding the claim. Not all claims are
1278	1278	valid. [A notice of a claim by a subcontractor or supplier is
1279	1279	required to be sent, and the mechanic's lien affidavit is required
1280	1280	to be filed, within strict time periods. The notice and the
1281	1281	affidavit must contain certain information.] All claimants may not
1282	1282	fully comply with the legal requirements to collect on a claim. If
1283	1283	your property is a homestead and you did not enter into a written
1284	1284	contract with your contractor that complies with the statutory
1285	1285	requirements for a lien on a homestead, your contractor, the
1286	1286	subcontractor, or the supplier may not claim a valid lien on your
1287	1287	property. [If you have paid the contractor in full before receiving
1288	1288	a notice of a claim and have fully complied with the law regarding
1289	1289	statutory retainage, you may not be liable for that claim.]
1290	1290	Accordingly, you should consult your attorney when you receive a
1291	1291	written notice of a claim to determine the true extent of your
1292	1292	liability or potential liability for that claim.
1293	1293	"OBTAIN A LIEN RELEASE AND A BILLS-PAID AFFIDAVIT. When you
1294	1294	receive a notice of unpaid balance or a notice of a filed lien claim
1295	1295	affidavit [claim], do not release withheld funds without obtaining
1296	1296	a signed and notarized release of lien and claim from the claimant.
1297	1297	You can [also] reduce the risk of having a claim filed by a
1298	1298	subcontractor or supplier by requiring as a condition of each
1299	1299	payment made by you or your lender that your contractor furnish you
1300	1300	with an affidavit stating that all bills have been paid. Under
1301	1301	Texas law, on final completion of the work and before final payment,
1302	1302	the contractor is required to furnish you with an affidavit stating
1303	1303	that all bills have been paid. If the contractor discloses any
1304	1304	unpaid bill in the affidavit, you should withhold payment in the
1305	1305	amount of the unpaid bill until you receive a waiver of lien or
1306	1306	release from that subcontractor or supplier.
1307	1307	"OBTAIN TITLE INSURANCE PROTECTION. You may be able to obtain
1308	1308	a title insurance policy to insure that the title to your property
1309	1309	and the existing improvements on your property are free from liens
1310	1310	claimed by subcontractors and suppliers. If your policy is issued
1311	1311	before the improvements are completed and covers the value of the
1312	1312	improvements to be completed, you should obtain, on the completion
1313	1313	of the improvements and as a condition of your final payment,
1314	1314	a 'completion of improvements' policy endorsement. This
1315	1315	endorsement will protect your property from liens claimed by
1316	1316	subcontractors and suppliers that may arise from the date the
1317	1317	original title policy is issued to the date of the endorsement."
1318	1318	SECTION 39. Sections 53.259(a) and (c), Property Code, are
1319	1319	amended to read as follows:
1320	1320	(a) As a condition of final payment under a residential
1321	1321	construction contract, the original contractor shall, at the time
1322	1322	the final payment is tendered, execute and deliver to the owner, or
1323	1323	the owner's agent, an affidavit acknowledging the amount claimed
1324	1324	for payment and stating that the original contractor has paid each
1325	1325	person in full for all labor and materials used in the construction
1326	1326	of improvements on the real property. If the original contractor
1327	1327	has not paid each person in full, the original contractor shall
1328	1328	state in the affidavit the amount owed and the name and, if known,
1329	1329	the address and telephone number of each person to whom a payment is
1330	1330	owed.
1331	1331	(c) A person commits an offense if the person intentionally,
1332	1332	knowingly, or recklessly makes a false or misleading statement in
1333	1333	an affidavit under this section. An offense under this section is a
1334	1334	misdemeanor. A person adjudged guilty of an offense under this
1335	1335	section shall be punished by a fine not to exceed $4,000 or
1336	1336	confinement in jail for a term not to exceed one year or both a fine
1337	1337	and confinement. [A person may not receive community supervision
1338	1338	for the offense.]
1339	1339	SECTION 40. Section 53.281, Property Code, is amended to
1340	1340	read as follows:
1341	1341	Sec. 53.281. WAIVER AND RELEASE OF LIEN OR PAYMENT BOND
1342	1342	CLAIM. (a) Except as provided by Section 53.287, any [Any] waiver
1343	1343	and release of a lien or payment bond claim under this chapter is
1344	1344	unenforceable unless a waiver and release is executed and delivered
1345	1345	in accordance with this subchapter.
1346	1346	(b) A waiver and release is effective to release the owner,
1347	1347	the owner's property, the contractor, and the surety on a payment
1348	1348	bond from claims and liens only if:
1349	1349	(1) the waiver and release substantially complies with
1350	1350	one of the forms prescribed by Section 53.284;
1351	1351	(2) the waiver and release is signed by the claimant or
1352	1352	the claimant's authorized agent and acknowledged [notarized]; and
1353	1353	(3) in the case of a conditional release, evidence of
1354	1354	payment to the claimant exists.
1355	1355	(c) A waiver and release that substantially complies with a
1356	1356	form required by Section 53.284 may be combined with a bills-paid
1357	1357	affidavit that substantially conforms to the requirements of
1358	1358	Section 53.085 or 53.259.
1359	1359	SECTION 41. Section 53.282(b), Property Code, is amended to
1360	1360	read as follows:
1361	1361	(b) The filing of a lien rendered unenforceable by a lien
1362	1362	waiver under Subsection (a)(3) does not violate Section 12.002,
1363	1363	Civil Practice and Remedies Code, unless:
1364	1364	(1) an owner or original contractor sends a written
1365	1365	explanation of the basis for nonpayment, evidence of the
1366	1366	contractual waiver of lien rights, and a notice of request for
1367	1367	release of the lien to the claimant at the claimant's address stated
1368	1368	in the lien claim affidavit; and
1369	1369	(2) the lien claimant does not release the filed lien
1370	1370	claim affidavit on or before the 14th day after the date the owner
1371	1371	or the original contractor sends the items required by Subdivision
1372	1372	(1).
1373	1373	SECTION 42. Section 53.283, Property Code, is amended to
1374	1374	read as follows:
1375	1375	Sec. 53.283. UNCONDITIONAL WAIVER AND RELEASE: PAYMENT
1376	1376	REQUIRED. (a) A person may not require a claimant or potential
1377	1377	claimant to execute an unconditional waiver and release for a
1378	1378	progress payment or final payment amount unless the claimant or
1379	1379	potential claimant received payment in that amount in good and
1380	1380	sufficient funds.
1381	1381	(b) Notwithstanding Subsection (a), a contractual
1382	1382	requirement for a claimant to waive or release the claimant's lien
1383	1383	rights under this chapter before performance of the work for which
1384	1384	the claim for payment is asserted is void.
1385	1385	(c) A claimant may tender an unconditional waiver and
1386	1386	release for payment before the actual receipt of a payment to be
1387	1387	delivered in trust to an attorney, title insurance company, title
1388	1388	insurance agent, or federally insured financial institution acting
1389	1389	as an escrow agent. The escrow agent may deliver the waiver and
1390	1390	release only after the claimant has confirmed receipt of payment in
1391	1391	good and sufficient funds.
1392	1392	SECTION 43. Section 53.284, Property Code, is amended by
1393	1393	amending Subsections (b), (c), (d), and (e) and adding Subsection
1394	1394	(f) to read as follows:
1395	1395	(b) If a claimant or potential claimant is required to
1396	1396	execute a waiver and release in exchange for or to induce the
1397	1397	payment of a progress payment and is not paid in exchange for the
1398	1398	waiver and release or if a single payee check or joint payee check
1399	1399	is given in exchange for the waiver and release, the waiver and
1400	1400	release must read:
1401	1401	"CONDITIONAL WAIVER AND RELEASE ON PROGRESS PAYMENT
1402	1402	"Project ___________________
1403	1403	"Job No. ___________________
1404	1404	"On receipt by the signer of this document of a check from
1405	1405	________________ (maker of check) in the sum of $__________ payable
1406	1406	to _____________________ (payee or payees of check) and when the
1407	1407	check has been properly endorsed and has been paid by the bank on
1408	1408	which it is drawn, this document becomes effective to release any
1409	1409	mechanic's lien right, any right arising from a payment bond that
1410	1410	complies with a state or federal statute, any common law payment
1411	1411	bond right, any claim for payment, and any rights under any similar
1412	1412	ordinance, rule, or statute related to claim or payment rights for
1413	1413	persons in the signer's position that the signer has on the property
1414	1414	of ________________ (owner) located at ______________________
1415	1415	(location) for [to] the following project [extent]:
1416	1416	______________________ ([job] description of the type of work,
1417	1417	materials, equipment, or services provided).
1418	1418	"This release covers a progress payment for all labor,
1419	1419	services, equipment, or materials furnished to the property or to
1420	1420	__________________ (person with whom signer contracted) as
1421	1421	indicated in the attached statement(s) or progress payment
1422	1422	request(s), except for unpaid retention or [,] pending
1423	1423	modifications and changes [, or other items furnished].
1424	1424	"Before any recipient of this document relies on this
1425	1425	document, the recipient should verify evidence of payment to the
1426	1426	signer.
1427	1427	"The signer warrants that the signer has already paid or will
1428	1428	use the funds received from this progress payment to promptly pay in
1429	1429	full all of the signer's laborers, subcontractors, materialmen, and
1430	1430	suppliers for all work, materials, equipment, or services provided
1431	1431	for or to the above referenced project in regard to the attached
1432	1432	statement(s) or progress payment request(s).
1433	1433	"Date ____________________________
1434	1434	"_________________________________ (Company name)
1435	1435	"By ______________________________ (Signature)
1436	1436	"_________________________________ (Title)
1437	1437	"(Insert acknowledgment)"
1438	1438	(c) If a claimant or potential claimant is required to
1439	1439	execute an unconditional waiver and release to prove the receipt of
1440	1440	good and sufficient funds for a progress payment and the claimant or
1441	1441	potential claimant asserts in the waiver and release that the
1442	1442	claimant or potential claimant has been paid the progress payment,
1443	1443	the waiver and release must:
1444	1444	(1) contain a notice at the top of the document,
1445	1445	printed in bold type at least as large as the largest type used in
1446	1446	the document, but not smaller than 10-point type, that reads:
1447	1447	"NOTICE:
1448	1448	"This document waives rights unconditionally and states that
1449	1449	you have been paid for giving up those rights. It is prohibited for
1450	1450	a person to require you to sign this document if you have not been
1451	1451	paid the payment amount set forth below. If you have not been paid,
1452	1452	use a conditional release form."; and
1453	1453	(2) below the notice, read:
1454	1454	"UNCONDITIONAL WAIVER AND RELEASE ON PROGRESS PAYMENT
1455	1455	"Project ___________________
1456	1456	"Job No. ___________________
1457	1457	"The signer of this document has been paid and has received a
1458	1458	progress payment in the sum of $___________ for all labor,
1459	1459	services, equipment, or materials furnished to the property or to
1460	1460	_____________________ (person with whom signer contracted) on the
1461	1461	property of _______________________ (owner) located at
1462	1462	______________________ (location) for [to] the following project
1463	1463	[extent]: ______________________ ([job] description of the type of
1464	1464	work, materials, equipment, or services provided). The signer
1465	1465	therefore waives and releases any mechanic's lien right, any right
1466	1466	arising from a payment bond that complies with a state or federal
1467	1467	statute, any common law payment bond right, any claim for payment,
1468	1468	and any rights under any similar ordinance, rule, or statute
1469	1469	related to claim or payment rights for persons in the signer's
1470	1470	position that the signer has on the above referenced project to the
1471	1471	following extent:
1472	1472	"This release covers a progress payment for all labor,
1473	1473	services, equipment, or materials furnished to the property or to
1474	1474	__________________ (person with whom signer contracted) as
1475	1475	indicated in the attached statement(s) or progress payment
1476	1476	request(s), except for unpaid retention or [,] pending
1477	1477	modifications and changes [, or other items furnished].
1478	1478	"The signer warrants that the signer has already paid or will
1479	1479	use the funds received from this progress payment to promptly pay in
1480	1480	full all of the signer's laborers, subcontractors, materialmen, and
1481	1481	suppliers for all work, materials, equipment, or services provided
1482	1482	for or to the above referenced project in regard to the attached
1483	1483	statement(s) or progress payment request(s).
1484	1484	"Date ____________________________
1485	1485	"_________________________________ (Company name)
1486	1486	"By ______________________________ (Signature)
1487	1487	"_________________________________ (Title)
1488	1488	"(Insert acknowledgment)"
1489	1489	(d) If a claimant or potential claimant is required to
1490	1490	execute a waiver and release in exchange for or to induce the
1491	1491	payment of a final payment and is not paid in good and sufficient
1492	1492	funds in exchange for the waiver and release or if a single payee
1493	1493	check or joint payee check is given in exchange for the waiver and
1494	1494	release, the waiver and release must read:
1495	1495	"CONDITIONAL WAIVER AND RELEASE ON FINAL PAYMENT
1496	1496	"Project ___________________
1497	1497	"Job No. ___________________
1498	1498	"On receipt by the signer of this document of a check from
1499	1499	________________ (maker of check) in the sum of $____________
1500	1500	payable to _____________________ (payee or payees of check) and
1501	1501	when the check has been properly endorsed and has been paid by the
1502	1502	bank on which it is drawn, this document becomes effective to
1503	1503	release any mechanic's lien right, any right arising from a payment
1504	1504	bond that complies with a state or federal statute, any common law
1505	1505	payment bond right, any claim for payment, and any rights under any
1506	1506	similar ordinance, rule, or statute related to claim or payment
1507	1507	rights for persons in the signer's position that the signer has on
1508	1508	the property of _____________________ (owner) located at
1509	1509	______________________ (location) for [to] the following project
1510	1510	[extent]: ______________________ ([job] description of the type of
1511	1511	work, materials, equipment, or services provided).
1512	1512	"This release covers the final payment to the signer for all
1513	1513	labor, services, equipment, or materials furnished to the property
1514	1514	or to __________________ (person with whom signer contracted).
1515	1515	"Before any recipient of this document relies on this
1516	1516	document, the recipient should verify evidence of payment to the
1517	1517	signer.
1518	1518	"The signer warrants that the signer has already paid or will
1519	1519	use the funds received from this final payment to promptly pay in
1520	1520	full all of the signer's laborers, subcontractors, materialmen, and
1521	1521	suppliers for all work, materials, equipment, or services provided
1522	1522	for or to the above referenced project up to the date of this waiver
1523	1523	and release.
1524	1524	"Date ____________________________
1525	1525	"_________________________________ (Company name)
1526	1526	"By ______________________________ (Signature)
1527	1527	"_________________________________ (Title)
1528	1528	"(Insert acknowledgment)"
1529	1529	(e) If a claimant or potential claimant is required to
1530	1530	execute an unconditional waiver and release to prove the receipt of
1531	1531	good and sufficient funds for a final payment and the claimant or
1532	1532	potential claimant asserts in the waiver and release that the
1533	1533	claimant or potential claimant has been paid the final payment, the
1534	1534	waiver and release must:
1535	1535	(1) contain a notice at the top of the document,
1536	1536	printed in bold type at least as large as the largest type used in
1537	1537	the document, but not smaller than 10-point type, that reads:
1538	1538	"NOTICE:
1539	1539	"This document waives rights unconditionally and states that
1540	1540	you have been paid for giving up those rights. It is prohibited for
1541	1541	a person to require you to sign this document if you have not been
1542	1542	paid in full as stated [the payment amount set forth] below. If you
1543	1543	have not been paid, use a conditional release form."; and
1544	1544	(2) below the notice, read:
1545	1545	"UNCONDITIONAL WAIVER AND RELEASE ON FINAL PAYMENT
1546	1546	"Project ___________________
1547	1547	"Job No. ___________________
1548	1548	"The signer of this document has been paid in full for all
1549	1549	labor, services, equipment, or materials furnished to the property
1550	1550	or to ___________________ (person with whom signer contracted) on
1551	1551	the property of ______________________ (owner) located at
1552	1552	______________________ (location) for [to] the following project
1553	1553	[extent]: ______________________ ([job] description of the type of
1554	1554	work, materials, equipment, or services provided). The signer
1555	1555	therefore waives and releases any mechanic's lien right, any right
1556	1556	arising from a payment bond that complies with a state or federal
1557	1557	statute, any common law payment bond right, any claim for payment,
1558	1558	and any rights under any similar ordinance, rule, or statute
1559	1559	related to claim or payment rights for persons in the signer's
1560	1560	position.
1561	1561	"The signer warrants that the signer has already paid or will
1562	1562	use the funds received from this final payment to promptly pay in
1563	1563	full all of the signer's laborers, subcontractors, materialmen, and
1564	1564	suppliers for all work, materials, equipment, or services provided
1565	1565	for or to the above referenced project up to the date of this waiver
1566	1566	and release.
1567	1567	"Date ____________________________
1568	1568	"_________________________________ (Company name)
1569	1569	"By ______________________________ (Signature)
1570	1570	"_________________________________ (Title)
1571	1571	"(Insert acknowledgment)"
1572	1572	(f) If the owner has filed and posted a notice of
1573	1573	commencement under Section 53.125, the owner may require, as a
1574	1574	condition for final payment, a claimant who has provided a notice of
1575	1575	furnishing to post on the lien website a conditional waiver and
1576	1576	release on final payment described by Subsection (d).
1577	1577	SECTION 44. The following provisions of the Property Code
1578	1578	are repealed:
1579	1579	(1) Section 53.001(11);
1580	1580	(2) Section 53.022(b);
1581	1581	(3) Section 53.025;
1582	1582	(4) Section 53.053;
1583	1583	(5) Section 53.056;
1584	1584	(6) Section 53.057;
1585	1585	(7) Section 53.058;
1586	1586	(8) Section 53.083;
1587	1587	(9) Section 53.084;
1588	1588	(10) Subchapter E, Chapter 53;
1589	1589	(11) Section 53.206(c);
1590	1590	(12) Section 53.252;
1591	1591	(13) Section 53.253; and
1592	1592	(14) Section 53.254(g).
1593	1593	SECTION 45. The changes in law made by this Act apply only
1594	1594	to an original contract entered into on or after the effective date
1595	1595	of this Act. An original contract entered into before the effective
1596	1596	date of this Act is governed by the law as it existed immediately
1597	1597	before the effective date of this Act, and that law is continued in
1598	1598	effect for that purpose.
1599	1599	SECTION 46. This Act takes effect May 1, 2020.