Texas 2021 - 87th Regular

Texas House Bill HB2237 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	H.B. No. 2237
	1	+	By: Burrows, Deshotel, Romero, Jr. H.B. No. 2237
	2	+	(Senate Sponsor - Johnson)
	3	+	(In the Senate - Received from the House May 10, 2021;
	4	+	May 10, 2021, read first time and referred to Committee on Business &
	5	+	Commerce; May 21, 2021, reported adversely, with favorable
	6	+	Committee Substitute by the following vote: Yeas 9, Nays 0;
	7	+	May 21, 2021, sent to printer.)
	8	+	Click here to see the committee vote
	9	+	COMMITTEE SUBSTITUTE FOR H.B. No. 2237 By: Hancock
2	10
3	11
	12	+	A BILL TO BE ENTITLED
4	13		AN ACT
5	14		relating to mechanic's, contractor's, or materialman's liens.
6	15		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
7	16		SECTION 1. Section 3503.051(3), Insurance Code, is amended
8	17		to read as follows:
9	18		(3) "Notice of claim" means a written notification by
10	19		a claimant who makes a claim for payment from the surety company.
11	20		The term does not include a routine statutory notice required by
12	21		Section 53.056 or [53.056(b),] 53.057, [53.058, 53.252(b), or
13	22		53.253,] Property Code, or Section 2253.047, Government Code.
14	23		SECTION 2. Section 53.001, Property Code, is amended by
15	24		amending Subdivisions (2), (3), (4), (8), (11), (13), and (14) and
16	25		adding Subdivision (7-a) to read as follows:
17	26		(2) "Improvement" includes:
18	27		(A) a house, building, structure, parking
19	28		structure, physical appurtenance, pool, utility, railroad, well,
20	29		storage facility, abutting sidewalks and streets, [and] utilities
21	30		in or on those sidewalks and streets, land reclaimed from overflow,
22	31		and other fixtures or modifications to real property;
23	32		(B) clearing, grubbing, draining, or fencing of
24	33		land;
25	34		(C) machinery or apparatuses used for raising
26	35		water or for supplying or storing water for stock, domestic use, or
27	36		irrigation [wells, cisterns, tanks, reservoirs, or artificial
28	37		lakes or pools made for supplying or storing water];
29	38		(D) work described by Section 53.021(4) [pumps,
30	39		siphons, and windmills or other machinery or apparatuses used for
31	40		raising water for stock, domestic use, or irrigation]; and
32	41		(E) a design, drawing, plan, plat, survey, or
33	42		specification provided by a licensed architect, engineer, or
34	43		surveyor [planting orchard trees, grubbing out orchards and
35	44		replacing trees, and pruning of orchard trees].
36	45		(3) "Labor" means:
37	46		(A) labor used in the direct performance
38	47		[prosecution] of the work; or
39	48		(B) a professional service used in the direct
40	49		preparation for the work of a design, drawing, plan, plat, survey,
41	50		or specification.
42	51		(4) "Material" means all or part of:
43	52		(A) the material, machinery, fixtures, or tools:
44	53		(i) incorporated into the work;
45	54		(ii) used [, consumed] in the direct
46	55		performance [prosecution] of the work;
47	56		(iii) specially fabricated for an
48	57		improvement; [,] or
49	58		(iv) ordered and delivered for
50	59		incorporation or use [consumption];
51	60		(B) rent at a reasonable rate and actual running
52	61		repairs at a reasonable cost for construction equipment used or
53	62		reasonably required and delivered for use in the direct performance
54	63		[prosecution] of the work at the site of the construction or repair;
55	64		or
56	65		(C) power, water, fuel, and lubricants consumed
57	66		or ordered and delivered for consumption in the direct performance
58	67		[prosecution] of the work.
59	68		(7-a) "Purported original contractor" means an
60	69		original contractor who can effectively control the owner or is
61	70		effectively controlled by the owner through common ownership of
62	71		voting stock or ownership interests, interlocking directorships,
63	72		common management, or otherwise, or who was engaged by the owner for
64	73		the construction or repair of improvements without a good faith
65	74		intention of the parties that the purported original contractor was
66	75		to perform under the contract. For purposes of this subdivision,
67	76		the term "owner" does not include a person who has or claims a
68	77		security interest only.
69	78		(8) "Residence" means the real property and
70	79		improvements for a single-family house, duplex, triplex, or
71	80		quadruplex or a unit in a multiunit structure used for residential
72	81		purposes in which title to the individual units is transferred to
73	82		the owners under a condominium or cooperative system that is:
74	83		(A) owned by one or more adult persons; and
75	84		(B) used or intended to be used as a dwelling by
76	85		one of the owners.
77	86		(11) "Retainage" means an amount representing part of
78	87		a contract payment that is not required to be paid to the claimant
79	88		within the month following the month in which labor is performed,
80	89		material is furnished, or specially fabricated material is
81	90		delivered. [The term does not include retainage under Subchapter
82	91		E.]
83	92		(13) "Subcontractor" means a person who labors or has
84	93		furnished labor or materials to fulfill an obligation to an
85	94		original contractor or to a subcontractor of any tier to perform all
86	95		or part of the work required by an original contract.
87	96		(14) "Work" means any part of construction or repair
88	97		of an improvement performed under an original contract.
89	98		SECTION 3. Section 53.003, Property Code, is amended by
90	99		amending Subsections (b) and (c) and adding Subsection (e) to read
91	100		as follows:
92	101		(b) Except as provided by Subsection (c) or (d), any [Any]
93	102		notice or other written communication required by this chapter must
94	103		[may] be delivered:
95	104		(1) in person to the party entitled to the notice or to
96	105		that party's agent;
97	106		(2) by certified mail; or
98	107		(3) by any other form of traceable, private delivery
99	108		or mailing service that can confirm proof of receipt[, regardless
100	109		of the manner prescribed by law].
101	110		(c) If notice is sent by [registered or] certified mail,
102	111		deposit or mailing of the notice in the United States mail in the
103	112		form required constitutes compliance with the notice requirement.
104	113		This subsection does not apply if the law requires receipt of the
105	114		notice by the person to whom it is directed.
106	115		(e) In computing the period of days in which to provide a
107	116		notice or to take any action required under this chapter, if the
108	117		last day of the period is a Saturday, Sunday, or legal holiday, the
109	118		period is extended to include the next day that is not a Saturday,
110	119		Sunday, or legal holiday.
111	120		SECTION 4. Section 53.021, Property Code, is amended to
112	121		read as follows:
113	122		Sec. 53.021. PERSONS ENTITLED TO LIEN. [(a)] A person has
114	123		a lien if[:
115	124		[(1)] the person, under a contract with the owner or
116	125		the owner's agent, trustee, receiver, contractor, or
117	126		subcontractor:
118	127		(1) labors[, specially fabricates material,] or
119	128		furnishes labor or materials for construction or repair of an
120	129		improvement; [in this state of:
121	130		[(A) a house, building, or improvement;
122	131		[(B) a levee or embankment to be erected for the
123	132		reclamation of overflow land along a river or creek; or
124	133		[(C) a railroad; and]
125	134		(2) [the person labors, specially fabricates the
126	135		material, or furnishes the labor or materials under or by virtue of
127	136		a contract with the owner or the owner's agent, trustee, receiver,
128	137		contractor, or subcontractor.
129	138		[(b) A person who] specially fabricates material, [has a
130	139		lien] even if the material is not delivered;
131	140		(3) is a licensed [.
132	141		[(c) An] architect, engineer, or surveyor providing
133	142		services to prepare a design, drawing, [who prepares a] plan, [or]
134	143		plat, survey, or specification;
135	144		(4) [under or by virtue of a written contract with the
136	145		owner or the owner's agent, trustee, or receiver in connection with
137	146		the actual or proposed design, construction, or repair of
138	147		improvements on real property or the location of the boundaries of
139	148		real property has a lien on the property.
140	149		[(d) A person who] provides labor, plant material, or other
141	150		supplies for the installation of landscaping for an [a house,
142	151		building, or] improvement, including the construction of a
143	152		retention pond, retaining wall, berm, irrigation system, fountain,
144	153		or other similar installation; or
145	154		(5) [, under or by virtue of a written contract with
146	155		the owner or the owner's agent, contractor, subcontractor, trustee,
147	156		or receiver has a lien on the property.
148	157		[(e) A person who] performs labor as part of, or [who]
149	158		furnishes labor or materials for, the demolition of an improvement
150	159		[a structure] on real property [under or by virtue of a written
151	160		contract with the owner of the property or the owner's agent,
152	161		trustee, receiver, contractor, or subcontractor has a lien on the
153	162		property].
154	163		SECTION 5. Sections 53.022(a), (c), and (d), Property Code,
155	164		are amended to read as follows:
156	165		(a) The lien extends to the [house, building, fixtures, or]
157	166		improvements [, the land reclaimed from overflow, or the railroad
158	167		and all of its properties,] and to each lot of land necessarily
159	168		connected [or reclaimed].
160	169		(c) A lien against land in a city, town, or village extends
161	170		to each lot on which the [house, building, or] improvement is
162	171		situated or on which the labor was performed.
163	172		(d) A lien against land not in a city, town, or village
164	173		extends to not more than 50 acres on which the [house, building, or]
165	174		improvement is situated or on which the labor was performed.
166	175		SECTION 6. Section 53.023, Property Code, is amended to
167	176		read as follows:
168	177		Sec. 53.023. PAYMENT SECURED BY LIEN. The lien secures
169	178		payment for:
170	179		(1) the labor done or material furnished for the
171	180		construction, [or] repair, design, survey, or demolition; or
172	181		(2) the specially fabricated material, even if the
173	182		material has not been delivered or incorporated into the
174	183		construction or repair, less its fair salvage value[; or
175	184		[(3) the preparation of a plan or plat by an architect,
176	185		engineer, or surveyor in accordance with Section 53.021(c)].
177	186		SECTION 7. Section 53.026(a), Property Code, is amended to
178	187		read as follows:
179	188		(a) A person who labors[, specially fabricates materials,]
180	189		or furnishes labor or materials under a direct contractual
181	190		relationship with a purported original contractor [another person]
182	191		is considered to be [in direct contractual relationship with the
183	192		owner and has a lien as] an original contractor for purposes of
184	193		perfecting a mechanic's lien [, if:
185	194		[(1) the owner contracted with the other person for
186	195		the construction or repair of a house, building, or improvements
187	196		and the owner can effectively control that person through ownership
188	197		of voting stock, interlocking directorships, or otherwise;
189	198		[(2) the owner contracted with the other person for
190	199		the construction or repair of a house, building, or improvements
191	200		and that other person can effectively control the owner through
192	201		ownership of voting stock, interlocking directorships, or
193	202		otherwise; or
194	203		[(3) the owner contracted with the other person for
195	204		the construction or repair of a house, building, or improvements
196	205		and the contract was made without good faith intention of the
197	206		parties that the other person was to perform the contract].
198	207		SECTION 8. Section 53.052, Property Code, is amended to
199	208		read as follows:
200	209		Sec. 53.052. FILING OF AFFIDAVIT. (a) An original
201	210		contractor claiming the lien must file an affidavit with the county
202	211		clerk:
203	212		(1) for projects other than residential construction
204	213		projects, not later than the 15th day of the fourth month after the
205	214		month in which the original contractor's work was completed,
206	215		terminated, or abandoned; or
207	216		(2) for residential construction projects, not later
208	217		than the 15th day of the third month after the month in which the
209	218		original contractor's work was completed, terminated, or
210	219		abandoned.
211	220		(b) Except as provided by Subsection (c) or (d) [(b)], a
212	221		claimant other than an original contractor [the person] claiming
213	222		the lien must file an affidavit with the county clerk [of the county
214	223		in which the property is located or into which the railroad extends]
215	224		not later than the 15th day of the fourth [calendar] month after the
216	225		later of:
217	226		(1) the month the claimant last provided labor or
218	227		materials; or
219	228		(2) the month the claimant would normally have been
220	229		required to deliver the last of specially fabricated materials that
221	230		have not been actually delivered [day on which the indebtedness
222	231		accrues].
223	232		(c) [(b)] A claimant other than an original contractor
224	233		[person] claiming a lien arising from a residential construction
225	234		project must file an affidavit with the county clerk [of the county
226	235		in which the property is located] not later than the 15th day of the
227	236		third [calendar] month after the later of:
228	237		(1) the month the claimant last provided labor or
229	238		materials; or
230	239		(2) the month the claimant would normally have been
231	240		required to deliver the last of specially fabricated materials that
232	241		have not been actually delivered.
233	242		(d) A claimant other than an original contractor claiming a
234	243		lien for retainage must file an affidavit with the county clerk not
235	244		later than the 15th day of the third month after the month in which
236	245		the original contract under which the claimant performed was
237	246		completed, terminated, or abandoned.
238	247		(e) An affidavit under this chapter must be filed in the
239	248		county where the improvements are located [day on which the
240	249		indebtedness accrues].
241	250		[(c)] The county clerk shall record the affidavit in records
242	251		kept for that purpose and shall index and cross-index the affidavit
243	252		in the names of the claimant, the original contractor, and the
244	253		owner. Failure of the county clerk to properly record or index a
245	254		filed affidavit does not invalidate the lien.
246	255		SECTION 9. Section 53.055(a), Property Code, is amended to
247	256		read as follows:
248	257		(a) A person who files an affidavit must send a copy of the
249	258		affidavit [by registered or certified mail] to the owner or reputed
250	259		owner at the owner's last known business or residence address not
251	260		later than the fifth day after the date the affidavit is filed with
252	261		the county clerk.
253	262		SECTION 10. The heading to Section 53.056, Property Code,
254	263		is amended to read as follows:
255	264		Sec. 53.056. DERIVATIVE CLAIMANT: NOTICE TO OWNER AND [OR]
256	265		ORIGINAL CONTRACTOR.
257	266		SECTION 11. Section 53.056, Property Code, is amended by
258	267		amending Subsection (a) and adding Subsections (a-1), (a-2), (a-3),
259	268		and (a-4) to read as follows:
260	269		(a) Except as provided by Section 53.057 [Subchapter K], a
261	270		claimant other than an original contractor must give the notice
262	271		prescribed by Subsections (a-1) and (a-2) [this section] for the
263	272		lien to be valid.
264	273		(a-1) For all unpaid labor or materials provided, the
265	274		claimant must send a notice of claim for unpaid labor or materials
266	275		to the owner or reputed owner and the original contractor. The
267	276		notice must be sent:
268	277		(1) for projects other than residential construction
269	278		projects, not later than the 15th day of the third month after the
270	279		month during which:
271	280		(A) the labor or materials were provided; or
272	281		(B) the undelivered specially fabricated
273	282		materials would normally have been delivered; or
274	283		(2) for residential construction projects, not later
275	284		than the 15th day of the second month after the month during which:
276	285		(A) the labor or materials were provided; or
277	286		(B) the undelivered specially fabricated
278	287		materials would normally have been delivered.
279	288		(a-2) The notice must be in substantially the following
280	289		form:
281	290		"NOTICE OF CLAIM FOR UNPAID LABOR OR MATERIALS
282	291		"WARNING: This notice is provided to preserve lien rights.
283	292		"Owner's property may be subject to a lien if sufficient funds are
284	293		not withheld from future payments to the original contractor to
285	294		cover this debt.
286	295		"Date:_______________
287	296		"Project description and/or address: _______________
288	297		"Claimant's name: _______________
289	298		"Type of labor or materials provided: _______________
290	299		"Original contractor's name: _______________
291	300		"Party with whom claimant contracted if different from
292	301		original contractor: _______________
293	302		"Claim amount: _______________
294	303		"_______________ (Claimant's contact person)
295	304		"_______________ (Claimant's address)"
296	305		(a-3) The notice may include an invoice or billing
297	306		statement.
298	307		(a-4) A claimant may give to the original contractor a
299	308		written notice of an unpaid labor or materials invoice that is past
300	309		due. A notice under this subsection is not required for a lien to be
301	310		valid.
302	311		SECTION 12. The heading to Section 53.057, Property Code,
303	312		is amended to read as follows:
304	313		Sec. 53.057. DERIVATIVE CLAIMANT: NOTICE OF CLAIM FOR
305	314		UNPAID [CONTRACTUAL] RETAINAGE [CLAIM].
306	315		SECTION 13. Section 53.057, Property Code, is amended by
307	316		amending Subsections (a) and (f) and adding Subsections (a-1),
308	317		(a-2), and (a-3) to read as follows:
309	318		(a) To the extent that a claim for unpaid retainage is not
310	319		included wholly or partly in a notice provided under Section
311	320		53.056, a claimant other than an original contractor whose contract
312	321		provides for retainage must [A claimant may] give notice under this
313	322		section for a lien for unpaid retainage to be valid [instead of or
314	323		in addition to notice under Section 53.056 or 53.252 if the claimant
315	324		is to labor, furnish labor or materials, or specially fabricate
316	325		materials, or has labored, furnished labor or materials, or
317	326		specially fabricated materials, under an agreement with an original
318	327		contractor or a subcontractor providing for retainage].
319	328		(a-1) The claimant must send the notice of claim for unpaid
320	329		retainage to the owner or reputed owner and the original contractor
321	330		not later than the earlier of:
322	331		(1) the 30th day after the date the claimant's contract
323	332		is completed, terminated, or abandoned; or
324	333		(2) the 30th day after the date the original contract
325	334		is terminated or abandoned.
326	335		(a-2) The notice must be in substantially the following
327	336		form:
328	337		"NOTICE OF CLAIM FOR UNPAID RETAINAGE
329	338		"WARNING: This notice is provided to preserve lien rights.
330	339		"Owner's property may be subject to a lien if sufficient funds are
331	340		not withheld from future payments to the original contractor to
332	341		cover this debt.
333	342		"Date:________________
334	343		"Project description and/or address: ________________
335	344		"Claimant's name: ________________
336	345		"Type of labor or materials provided: ________________
337	346		"Original contractor's name: ________________
338	347		"Party with whom claimant contracted if different from
339	348		original contractor: ________________
340	349		"Total retainage unpaid: ________________
341	350		"________________ (Claimant's contact person)
342	351		"________________ (Claimant's address)"
343	352		(a-3) The notice may include an invoice or billing
344	353		statement.
345	354		(f) A claimant has a lien on, and the owner is personally
346	355		liable to the claimant for, the reserved [retained] funds under
347	356		Subchapter E if the claimant:
348	357		(1) gives notice in accordance with this section and:
349	358		(A) complies with Subchapter E; or
350	359		(B) files an affidavit claiming a lien not later
351	360		than [the earliest of:
352	361		[(i)] the date required for filing an
353	362		affidavit under the applicable provision of Section 53.052[;
354	363		[(ii) the 40th day after the date stated in
355	364		an affidavit of completion as the date of completion of the work
356	365		under the original contract, if the owner sent the claimant notice
357	366		of an affidavit of completion in the time and manner required;
358	367		[(iii) the 40th day after the date of
359	368		termination or abandonment of the original contract, if the owner
360	369		sent the claimant a notice of such termination or abandonment in the
361	370		time and manner required; or
362	371		[(iv) the 30th day after the date the owner
363	372		sent to the claimant to the claimant's address provided in the
364	373		notice for contractual retainage, as required under Subsection (c),
365	374		a written notice of demand for the claimant to file the affidavit
366	375		claiming a lien]; and
367	376		(2) gives the notice of the filed affidavit as
368	377		required by Section 53.055.
369	378		SECTION 14. Sections 53.081(a) and (b), Property Code, are
370	379		amended to read as follows:
371	380		(a) If an owner receives notice under Section 53.056 or [,]
372	381		53.057, [53.058, 53.252, or 53.253,] the owner may withhold from
373	382		payments to the original contractor an amount necessary to pay the
374	383		claim for which he receives notice. The withholding may be in
375	384		addition to any reserved funds.
376	385		(b) If notice is sent under [in a form that substantially
377	386		complies with] Section 53.056 [or 53.252], the owner may withhold
378	387		the funds immediately on receipt of the notice.
379	388		SECTION 15. Section 53.082, Property Code, is amended to
380	389		read as follows:
381	390		Sec. 53.082. TIME FOR WHICH FUNDS ARE WITHHELD. Unless
382	391		[payment is made under Section 53.083 or] the claim is otherwise
383	392		settled, discharged, indemnified against under Subchapter H or I,
384	393		or determined to be invalid by a final judgment of a court, the
385	394		owner shall retain the funds withheld until:
386	395		(1) the time for filing the affidavit of mechanic's
387	396		lien has passed; or
388	397		(2) if a lien affidavit has been filed, [until] the
389	398		lien claim has been satisfied or released.
390	399		SECTION 16. Section 53.084, Property Code, is amended to
391	400		read as follows:
392	401		Sec. 53.084. OWNER'S LIABILITY. (a) Except for the amount
393	402		the owner fails to reserve [required to be retained] under
394	403		Subchapter E, the owner is not liable for any amount paid to the
395	404		original contractor before the owner is authorized to withhold
396	405		funds under this subchapter.
397	406		(b) If the owner has received a notice [the notices]
398	407		required by Section 53.056 or 53.057 [Subchapter C or K], if the
399	408		lien has been secured, and if the claim has been reduced to final
400	409		judgment, the owner is liable and the owner's property is subject to
401	410		a claim for any money paid to the original contractor after the
402	411		owner was authorized to withhold funds under this subchapter. The
403	412		owner is liable for that amount in addition to any amount for which
404	413		the owner [he] is liable under Subchapter E.
405	414		SECTION 17. The heading to Subchapter E, Chapter 53,
406	415		Property Code, is amended to read as follows:
407	416		SUBCHAPTER E. FUNDS RESERVED [REQUIRED RETAINAGE] FOR BENEFIT OF
408	417		LIEN CLAIMANTS
409	418		SECTION 18. Sections 53.101, 53.102, 53.103, 53.104, and
410	419		53.105, Property Code, are amended to read as follows:
411	420		Sec. 53.101. FUNDS REQUIRED TO BE RESERVED [RETAINAGE].
412	421		(a) During the progress of work under an original contract for
413	422		which a mechanic's lien may be claimed and for 30 days after the
414	423		work under the contract is completed, the owner shall reserve
415	424		[retain]:
416	425		(1) 10 percent of the contract price of the work to the
417	426		owner; or
418	427		(2) 10 percent of the value of the work, measured by
419	428		the proportion that the work done bears to the work to be done,
420	429		using the contract price or, if there is no contract price, using
421	430		the reasonable value of the completed work.
422	431		(b) In this section, "owner" includes the owner's agent,
423	432		trustee, or receiver.
424	433		Sec. 53.102. PAYMENT SECURED BY RESERVED FUNDS [RETAINAGE].
425	434		The reserved [retained] funds secure the payment of artisans and
426	435		mechanics who perform labor or service and the payment of other
427	436		persons who furnish material, material and labor, or specially
428	437		fabricated material for any contractor, subcontractor, agent, or
429	438		receiver in the performance of the work.
430	439		Sec. 53.103. LIEN ON RESERVED [RETAINED] FUNDS. A claimant
431	440		has a lien on the reserved [retained] funds if the claimant:
432	441		(1) sends the notices required by this chapter in the
433	442		time and manner required; and
434	443		(2) except as allowed by Section 53.057(f), files an
435	444		affidavit claiming a lien not later than the 30th day after the
436	445		earliest of the date:
437	446		(A) the work is completed;
438	447		(B) the original contract is terminated; or
439	448		(C) the original contractor abandons performance
440	449		under the original contract.
441	450		Sec. 53.104. PREFERENCES. (a) Individual artisans and
442	451		mechanics are entitled to a preference to the reserved [retained]
443	452		funds and shall share proportionately to the extent of their claims
444	453		for wages and fringe benefits earned.
445	454		(b) After payment of artisans and mechanics who are entitled
446	455		to a preference under Subsection (a), other participating claimants
447	456		share proportionately in the balance of the reserved [retained]
448	457		funds.
449	458		Sec. 53.105. OWNER'S LIABILITY FOR FAILURE TO RESERVE FUNDS
450	459		[RETAIN]. (a) If the owner fails or refuses to comply with this
451	460		subchapter, the claimants complying with Subchapter C or this
452	461		subchapter have a lien, at least to the extent of the amount that
453	462		should have been reserved [retained] from the original contract
454	463		under which they are claiming, against the improvements [house,
455	464		building, structure, fixture, or improvement] and all of its
456	465		properties and against the lot or lots of land necessarily
457	466		connected.
458	467		(b) The claimants share the lien proportionately in
459	468		accordance with the preference provided by Section 53.104.
460	469		SECTION 19. Sections 53.106(a), (b), and (d), Property
461	470		Code, are amended to read as follows:
462	471		(a) An owner may file with the county clerk of the county in
463	472		which the property is located an affidavit of completion. The
464	473		affidavit must contain:
465	474		(1) the name and address of the owner;
466	475		(2) the name and address of the original contractor;
467	476		(3) a description, legally sufficient for
468	477		identification, of the real property on which the improvements are
469	478		located;
470	479		(4) a description of the improvements furnished under
471	480		the original contract;
472	481		(5) a statement that the improvements under the
473	482		original contract have been completed and the date of completion;
474	483		and
475	484		(6) a conspicuous statement that a claimant may not
476	485		have a lien on retained funds unless the claimant files an affidavit
477	486		claiming a lien in the time and manner required by this chapter [not
478	487		later than the 40th day after the date the work under the original
479	488		contract is completed].
480	489		(b) A copy of the affidavit must be sent [by certified or
481	490		registered mail] to the original contractor [not later than the
482	491		date the affidavit is filed] and to each claimant who sends a notice
483	492		[of lien liability] to the owner under Section 53.056 or [,] 53.057
484	493		[, 53.058, 53.252, or 53.253] not later than the third day after the
485	494		date the affidavit is filed or the 10th day after the date the owner
486	495		receives the notice of lien liability, whichever is later.
487	496		(d) An [Except as provided by this subsection, an] affidavit
488	497		filed under this section [on or before the 10th day after the date
489	498		of completion of the improvements] is prima facie evidence of the
490	499		date the work under the original contract is completed for purposes
491	500		of this chapter [subchapter and Section 53.057]. If the affidavit
492	501		is filed after the 10th day after the date of completion, the date
493	502		of completion for purposes of this subchapter [and Section 53.057]
494	503		is the date the affidavit is filed. This subsection does not apply
495	504		to a person to whom the affidavit was not sent as required by this
496	505		section.
497	506		SECTION 20. Sections 53.107(a) and (b), Property Code, are
498	507		amended to read as follows:
499	508		(a) Not later than the 10th day after the date an original
500	509		contract is terminated or the original contractor abandons
501	510		performance under the original contract, the owner shall give
502	511		notice to each subcontractor who, before the date of termination or
503	512		abandonment, has:
504	513		(1) given notice to the owner as provided by Section
505	514		53.056 or [,] 53.057 [, or 53.058]; or
506	515		(2) sent to the owner [by certified or registered
507	516		mail] a written request for notice of termination or abandonment.
508	517		(b) The notice must contain:
509	518		(1) the name and address of the owner;
510	519		(2) the name and address of the original contractor;
511	520		(3) a description, legally sufficient for
512	521		identification, of the real property on which the improvements are
513	522		located;
514	523		(4) a general description of the improvements agreed
515	524		to be furnished under the original contract;
516	525		(5) a statement that the original contract has been
517	526		terminated or that performance under the contract has been
518	527		abandoned;
519	528		(6) the date of the termination or abandonment; and
520	529		(7) a conspicuous statement that a claimant may not
521	530		have a lien on the retained funds unless the claimant files an
522	531		affidavit claiming a lien in the time and manner required by this
523	532		chapter [not later than the 40th day after the date of the
524	533		termination or abandonment].
525	534		SECTION 21. Section 53.155, Property Code, is amended to
526	535		read as follows:
527	536		Sec. 53.155. TRANSFER OF PROPERTY SOLD. If the [house,
528	537		building,] improvement [, or any piece of railroad property] is
529	538		sold separately from the land, the officer making the sale shall
530	539		provide [place] the purchaser [in possession. The purchaser is
531	540		entitled to] a reasonable time after the date of purchase within
532	541		which to remove and take possession of the purchased improvement
533	542		[property].
534	543		SECTION 22. Section 53.157, Property Code, is amended to
535	544		read as follows:
536	545		Sec. 53.157. DISCHARGE OF LIEN. An [A mechanic's lien or]
537	546		affidavit claiming a mechanic's lien filed under Section 53.052 may
538	547		be discharged of record by:
539	548		(1) recording a lien release signed by the claimant
540	549		under Section 53.152;
541	550		(2) failing to institute suit to foreclose the lien in
542	551		the county in which the improvement [property] is located within
543	552		the period prescribed by Section 53.158, 53.175, or 53.208;
544	553		(3) recording the original or certified copy of a
545	554		final judgment or decree of a court of competent jurisdiction
546	555		providing for the discharge;
547	556		(4) filing the bond and notice in compliance with
548	557		Subchapter H;
549	558		(5) filing the bond in compliance with Subchapter I;
550	559		or
551	560		(6) recording a certified copy of the order removing
552	561		the lien under Section 53.160, provided [and a certificate from the
553	562		clerk of the court that states] that no bond or deposit as described
554	563		by Section 53.161 was filed by the claimant within 30 days after the
555	564		date the order was entered.
556	565		SECTION 23. Section 53.158, Property Code, is amended by
557	566		amending Subsection (a) and adding Subsections (a-1) and (a-2) to
558	567		read as follows:
559	568		(a) Except as provided by Subsection (a-2) [(b)], suit must
560	569		be brought to foreclose the lien not later than the first
561	570		anniversary of [within two years after] the last day a claimant may
562	571		file the lien affidavit under Section 53.052 [or within one year
563	572		after completion, termination, or abandonment of the work under the
564	573		original contract under which the lien is claimed, whichever is
565	574		later].
566	575		(a-1) Notwithstanding Section 16.069, Civil Practice and
567	576		Remedies Code, or any other law, if suit is pursued solely to
568	577		discharge a lien because limitations have expired on bringing a
569	578		lien foreclosure suit, the lien claimant's rights to pursue a suit
570	579		to foreclose a lien are not revived.
571	580		(a-2) The limitations period established under Subsection
572	581		(a) may be extended to not later than the second anniversary of the
573	582		date the claimant filed the lien affidavit under Section 53.052 if,
574	583		before the expiration of the limitations period established under
575	584		Subsection (a), the claimant enters into a written agreement with
576	585		the then-current record owner of the property to extend the
577	586		limitations period. The agreement must be recorded with the clerk
578	587		of the same county where the lien was recorded and is considered to
579	588		be notice of the extension to any subsequent purchaser.
580	589		SECTION 24. Sections 53.160(b) and (c), Property Code, are
581	590		amended to read as follows:
582	591		(b) The grounds for objecting to the validity or
583	592		enforceability of the claim or lien for purposes of the motion are
584	593		limited to the following:
585	594		(1) notice of claim was not timely furnished to the
586	595		owner or original contractor as required by Section 53.056 or [,]
587	596		53.057 [, 53.058, 53.252, or 53.253];
588	597		(2) an affidavit claiming a lien failed to comply with
589	598		Section 53.054 or was not filed as required by Section 53.052;
590	599		(3) notice of the filed affidavit was not furnished to
591	600		the owner or original contractor as required by Section 53.055;
592	601		(4) the deadlines for perfecting a lien claim for
593	602		retainage under this chapter have expired and the owner complied
594	603		with the requirements of Section 53.101 and paid the retainage and
595	604		all other funds owed to the original contractor before:
596	605		(A) the claimant perfected the lien claim; and
597	606		(B) the owner received a notice of the claim as
598	607		required by this chapter;
599	608		(5) all funds subject to the notice of a claim to the
600	609		owner and a notice regarding the retainage have been deposited in
601	610		the registry of the court and the owner has no additional liability
602	611		to the claimant;
603	612		(6) when the lien affidavit was filed on homestead
604	613		property:
605	614		(A) no contract was executed or filed as required
606	615		by Section 53.254;
607	616		(B) the affidavit claiming a lien failed to
608	617		contain the notice as required by Section 53.254; or
609	618		(C) the notice of the claim failed to include the
610	619		statement required by Section 53.254; and
611	620		(7) the claimant executed a valid and enforceable
612	621		waiver or release of the claim or lien claimed in the affidavit.
613	622		(c) The claimant is not required to file a response. The
614	623		claimant and any other party that has appeared in the proceeding
615	624		must be notified by at least 30 [21] days before the date of the
616	625		hearing on the motion. A motion may not be heard before the 30th
617	626		[21st] day after the date the claimant answers or appears in the
618	627		proceeding. The claimant must be allowed expedited discovery
619	628		regarding information relevant to the issues listed under
620	629		Subsection (b).
621	630		SECTION 25. Section 53.173(c), Property Code, is amended to
622	631		read as follows:
623	632		(c) The notice must be served on each obligee by mailing a
624	633		copy of the notice and the bond to the obligee by certified [United
625	634		States] mail[, return receipt requested,] addressed to the claimant
626	635		at the address stated in the lien affidavit for the obligee.
627	636		SECTION 26. Section 53.205(a), Property Code, is amended to
628	637		read as follows:
629	638		(a) The bond protects all persons with a claim that is:
630	639		(1) perfected in the manner prescribed for fixing a
631	640		lien under Subchapter C [or, if the claim relates to a residential
632	641		construction project, under Subchapter K]; or
633	642		(2) perfected in the manner prescribed by Section
634	643		53.206.
635	644		SECTION 27. Section 53.206, Property Code, is amended to
636	645		read as follows:
637	646		Sec. 53.206. PERFECTION OF CLAIM. (a) Except as provided
638	647		by Subsection (b), to [To] perfect a claim against a bond in a
639	648		manner other than that prescribed by Subchapter C [or K] for fixing
640	649		a lien, a person must [:
641	650		[(1)] give notice under Sections 53.056 and 53.057, as
642	651		applicable, to the original contractor and surety on the bond [all
643	652		applicable notices under the appropriate subchapter; and
644	653		[(2) give to the surety on the bond, instead of the
645	654		owner, all notices under the appropriate subchapter required to be
646	655		given to the owner].
647	656		(b) To perfect a claim for retainage under this section, a
648	657		claimant [person] is not required to[:
649	658		[(1)] give notice to the surety under Section 53.057
650	659		if [, unless] the claimant has a direct contractual relationship
651	660		with the original contractor [and the agreed retainage is in excess
652	661		of 10 percent of the contract;
653	662		[(2) give notice to the surety under Section 53.058(b)
654	663		or, if the claim relates to a residential construction project,
655	664		under Section 53.253(c); or
656	665		[(3) file any affidavit with the county clerk].
657	666		(c) A claimant that provides the notices described by this
658	667		section is not required to file an affidavit claiming a mechanic's
659	668		lien to perfect a claim under the bond [For the claim to be valid, a
660	669		person must give notice in the time and manner required by this
661	670		section, but the content of the notices need only provide fair
662	671		notice of the amount and the nature of the claim asserted].
663	672		(d) A person satisfies the requirements of this section
664	673		relating to providing notice to the surety if the person mails the
665	674		notice by certified [or registered] mail to the surety:
666	675		(1) at the address stated on the bond or on an
667	676		attachment to the bond;
668	677		(2) at the address on file with the Texas Department of
669	678		Insurance; or
670	679		(3) at any other address allowed by law.
671	680		SECTION 28. Section 53.207(a), Property Code, is amended to
672	681		read as follows:
673	682		(a) If the owner receives any of the notices or a lien is
674	683		fixed under this chapter [Subchapter C or K], the owner shall mail
675	684		to the surety on the bond a copy of all notices received.
676	685		SECTION 29. Section 53.208(a), Property Code, is amended to
677	686		read as follows:
678	687		(a) A claimant may sue the principal and surety on the bond
679	688		either jointly or severally, if the [his] claim remains unpaid for
680	689		60 days after the claimant perfects the claim.
681	690		SECTION 30. Section 53.232, Property Code, is amended to
682	691		read as follows:
683	692		Sec. 53.232. TO WHOM NOTICE GIVEN; MANNER. The lien
684	693		claimant must send written notice of his claim by [registered or]
685	694		certified mail to:
686	695		(1) the officials of the state, county, town, or
687	696		municipality whose duty it is to pay the contractor; and
688	697		(2) the contractor at the contractor's last known
689	698		business or residence address.
690	699		SECTION 31. Section 53.238, Property Code, is amended to
691	700		read as follows:
692	701		Sec. 53.238. NOTICE OF BOND. The official with whom the
693	702		bond is filed shall send an exact copy of the bond by [registered
694	703		mail or] certified mail, return receipt requested, to all
695	704		claimants.
696	705		SECTION 32. The heading to Section 53.254, Property Code,
697	706		is amended to read as follows:
698	707		Sec. 53.254. CONTRACTUAL REQUIREMENTS FOR LIEN ON
699	708		HOMESTEAD.
700	709		SECTION 33. Section 53.254(g), Property Code, is amended to
701	710		read as follows:
702	711		(g) For the lien on a homestead to be valid, the notice
703	712		required to be given to the owner under Subchapter C [Section
704	713		53.252] must include or have attached the following statement:
705	714		"If a subcontractor or supplier who furnishes materials or
706	715		performs labor for construction of improvements on your property is
707	716		not paid, your property may be subject to a lien for the unpaid
708	717		amount if:
709	718		(1) after receiving notice of the unpaid claim from
710	719		the claimant, you fail to withhold payment to your contractor that
711	720		is sufficient to cover the unpaid claim until the dispute is
712	721		resolved; or
713	722		(2) during construction and for 30 days after
714	723		completion of your contractor's work [construction], you fail to
715	724		reserve [retain] 10 percent of the contract price or 10 percent of
716	725		the value of the work performed by your contractor.
717	726		"If you have complied with the law regarding the reservation
718	727		of 10 percent of the contract price or value of work [retainage] and
719	728		you have withheld payment to the contractor sufficient to cover any
720	729		written notice of claim and have paid that amount, if any, to the
721	730		claimant, any lien claim filed on your property by a subcontractor
722	731		or supplier, other than a person who contracted directly with you,
723	732		will not be a valid lien on your property. In addition, except for
724	733		the required 10 percent reservation [retainage], you are not liable
725	734		to a subcontractor or supplier for any amount paid to your
726	735		contractor before you received written notice of the claim."
727	736		SECTION 34. Section 53.255(b), Property Code, is amended to
728	737		read as follows:
729	738		(b) The disclosure statement must read substantially
730	739		similar to the following:
731	740		"KNOW YOUR RIGHTS AND RESPONSIBILITIES UNDER THE LAW. You
732	741		are about to enter into a transaction to build a new home or remodel
733	742		existing residential property. Texas law requires your contractor
734	743		to provide you with this brief overview of some of your rights,
735	744		responsibilities, and risks in this transaction.
736	745		"CONVEYANCE TO CONTRACTOR NOT REQUIRED. Your contractor may
737	746		not require you to convey your real property to your contractor as a
738	747		condition to the agreement for the construction of improvements on
739	748		your property.
740	749		"KNOW YOUR CONTRACTOR. Before you enter into your agreement
741	750		for the construction of improvements to your real property, make
742	751		sure that you have investigated your contractor. Obtain and verify
743	752		references from other people who have used the contractor for the
744	753		type and size of construction project on your property.
745	754		"GET IT IN WRITING. Make sure that you have a written
746	755		agreement with your contractor that includes: (1) a description of
747	756		the work the contractor is to perform; (2) the required or
748	757		estimated time for completion of the work; (3) the cost of the work
749	758		or how the cost will be determined; and (4) the procedure and
750	759		method of payment, including provisions for statutory reservation
751	760		of funds [retainage] and conditions for final payment. If your
752	761		contractor made a promise, warranty, or representation to you
753	762		concerning the work the contractor is to perform, make sure that
754	763		promise, warranty, or representation is specified in the written
755	764		agreement. An oral promise that is not included in the written
756	765		agreement may not be enforceable under Texas law.
757	766		"READ BEFORE YOU SIGN. Do not sign any document before you
758	767		have read and understood it. NEVER SIGN A DOCUMENT THAT INCLUDES AN
759	768		UNTRUE STATEMENT. Take your time in reviewing documents. If you
760	769		borrow money from a lender to pay for the improvements, you are
761	770		entitled to have the loan closing documents furnished to you for
762	771		review at least one business day before the closing. Do not waive
763	772		this requirement unless a bona fide emergency or another good cause
764	773		exists, and make sure you understand the documents before you sign
765	774		them. If you fail to comply with the terms of the documents, you
766	775		could lose your property. You are entitled to have your own
767	776		attorney review any documents. If you have any question about the
768	777		meaning of a document, consult an attorney.
769	778		"GET A LIST OF SUBCONTRACTORS AND SUPPLIERS. Before
770	779		construction commences, your contractor is required to provide you
771	780		with a list of the subcontractors and suppliers the contractor
772	781		intends to use on your project. Your contractor is required to
773	782		supply updated information on any subcontractors and suppliers
774	783		added after the list is provided. Your contractor is not required
775	784		to supply this information if you sign a written waiver of your
776	785		rights to receive this information.
777	786		"MONITOR THE WORK. Lenders and governmental authorities may
778	787		inspect the work in progress from time to time for their own
779	788		purposes. These inspections are not intended as quality control
780	789		inspections. Quality control is a matter for you and your
781	790		contractor. To ensure that your home is being constructed in
782	791		accordance with your wishes and specifications, you should inspect
783	792		the work yourself or have your own independent inspector review the
784	793		work in progress.
785	794		"MONITOR PAYMENTS. If you use a lender, your lender is
786	795		required to provide you with a periodic statement showing the money
787	796		disbursed by the lender from the proceeds of your loan. Each time
788	797		your contractor requests payment from you or your lender for work
789	798		performed, your contractor is also required to furnish you with a
790	799		disbursement statement that lists the name and address of each
791	800		subcontractor or supplier that the contractor intends to pay from
792	801		the requested funds. Review these statements and make sure that the
793	802		money is being properly disbursed.
794	803		"CLAIMS BY SUBCONTRACTORS AND SUPPLIERS. Under Texas law, if
795	804		a subcontractor or supplier who furnishes labor or materials for
796	805		the construction of improvements on your property is not paid, you
797	806		may become liable and your property may be subject to a lien for the
798	807		unpaid amount, even if you have not contracted directly with the
799	808		subcontractor or supplier. To avoid liability, you should take the
800	809		following actions:
801	810		(1) If you receive a written notice from a
802	811		subcontractor or supplier, you should withhold payment from your
803	812		contractor for the amount of the claim stated in the notice until
804	813		the dispute between your contractor and the subcontractor or
805	814		supplier is resolved. If your lender is disbursing money directly
806	815		to your contractor, you should immediately provide a copy of the
807	816		notice to your lender and instruct the lender to withhold payment in
808	817		the amount of the claim stated in the notice. If you continue to pay
809	818		the contractor after receiving the written notice without
810	819		withholding the amount of the claim, you may be liable and your
811	820		property may be subject to a lien for the amount you failed to
812	821		withhold.
813	822		(2) During construction and for 30 days after final
814	823		completion, termination, or abandonment of the contract by the
815	824		contractor, you should reserve [withhold] or cause your lender to
816	825		reserve [withhold] 10 percent of the amount of payments made for the
817	826		work performed by your contractor. [This is sometimes referred to
818	827		as 'statutory retainage.'] If you choose not to reserve [withhold]
819	828		the 10 percent for at least 30 days after final completion,
820	829		termination, or abandonment of the contract by the contractor and
821	830		if a valid claim is timely made by a claimant and your contractor
822	831		fails to pay the claim, you may be personally liable and your
823	832		property may be subject to a lien up to the amount that you failed to
824	833		reserve [withhold].
825	834		"If a claim is not paid within a certain time period, the
826	835		claimant is required to file a mechanic's lien affidavit in the real
827	836		property records in the county where the property is located. A
828	837		mechanic's lien affidavit is not a lien on your property, but the
829	838		filing of the affidavit could result in a court imposing a lien on
830	839		your property if the claimant is successful in litigation to
831	840		enforce the lien claim.
832	841		"SOME CLAIMS MAY NOT BE VALID. When you receive a written
833	842		notice of a claim or when a mechanic's lien affidavit is filed on
834	843		your property, you should know your legal rights and
835	844		responsibilities regarding the claim. Not all claims are valid. A
836	845		notice of a claim by a subcontractor or supplier is required to be
837	846		sent, and the mechanic's lien affidavit is required to be filed,
838	847		within strict time periods. The notice and the affidavit must
839	848		contain certain information. All claimants may not fully comply
840	849		with the legal requirements to collect on a claim. If you have paid
841	850		the contractor in full before receiving a notice of a claim and have
842	851		withheld the 10 percent of the contract price or value of work
843	852		[fully complied with the law regarding statutory retainage], you
844	853		may not be liable for that claim. Accordingly, you should consult
845	854		your attorney when you receive a written notice of a claim to
846	855		determine the true extent of your liability or potential liability
847	856		for that claim.
848	857		"OBTAIN A LIEN RELEASE AND A BILLS-PAID AFFIDAVIT. When you
849	858		receive a notice of claim, do not release withheld funds without
850	859		obtaining a signed and notarized release of lien and claim from the
851	860		claimant. You can also reduce the risk of having a claim filed by a
852	861		subcontractor or supplier by requiring as a condition of each
853	862		payment made by you or your lender that your contractor furnish you
854	863		with an affidavit stating that all bills have been paid. Under
855	864		Texas law, on final completion of the work and before final payment,
856	865		the contractor is required to furnish you with an affidavit stating
857	866		that all bills have been paid. If the contractor discloses any
858	867		unpaid bill in the affidavit, you should withhold payment in the
859	868		amount of the unpaid bill until you receive a waiver of lien or
860	869		release from that subcontractor or supplier.
861	870		"OBTAIN TITLE INSURANCE PROTECTION. You may be able to obtain
862	871		a title insurance policy to insure that the title to your property
863	872		and the existing improvements on your property are free from liens
864	873		claimed by subcontractors and suppliers. If your policy is issued
865	874		before the improvements are completed and covers the value of the
866	875		improvements to be completed, you should obtain, on the completion
867	876		of the improvements and as a condition of your final payment,
868	877		a 'completion of improvements' policy endorsement. This
869	878		endorsement will protect your property from liens claimed by
870	879		subcontractors and suppliers that may arise from the date the
871	880		original title policy is issued to the date of the endorsement."
872	881		SECTION 35. Section 53.281(b), Property Code, is amended to
873	882		read as follows:
874	883		(b) A waiver and release is effective to release the owner,
875	884		the owner's property, the contractor, and the surety on a payment
876	885		bond from claims and liens only if:
877	886		(1) the waiver and release substantially complies with
878	887		one of the forms prescribed by Section 53.284;
879	888		(2) the waiver and release is signed by the claimant or
880	889		the claimant's authorized agent [and notarized]; and
881	890		(3) in the case of a conditional release, evidence of
882	891		payment to the claimant exists.
883	892		SECTION 36. The following provisions of the Property Code
884	893		are repealed:
885	894		(1) Section 53.003(a);
886	895		(2) Section 53.026(b);
887	896		(3) Section 53.053;
888	897		(4) Sections 53.056(b), (c), (d), (e), and (f);
889	898		(5) Sections 53.057(b), (b-1), (c), (d), (e), and (g);
890	899		(6) Section 53.058;
891	900		(7) Section 53.081(d);
892	901		(8) Section 53.083;
893	902		(9) Section 53.158(b); and
894	903		(10) Sections 53.252 and 53.253.
895	904		SECTION 37. The changes in law made by this Act apply only
896	905		to an original contract entered into on or after the effective date
897	906		of this Act. An original contract entered into before the effective
898	907		date of this Act is governed by the law as it existed immediately
899	908		before the effective date of this Act, and that law is continued in
900	909		effect for that purpose.
901	910		SECTION 38. This Act takes effect January 1, 2022.
902		-	______________________________ ______________________________
903		-	President of the Senate Speaker of the House
904		-	I certify that H.B. No. 2237 was passed by the House on May 8,
905		-	2021, by the following vote: Yeas 136, Nays 1, 1 present, not
906		-	voting; and that the House concurred in Senate amendments to H.B.
907		-	No. 2237 on May 28, 2021, by the following vote: Yeas 141, Nays 1,
908		-	2 present, not voting.
909		-	______________________________
910		-	Chief Clerk of the House
911		-	I certify that H.B. No. 2237 was passed by the Senate, with
912		-	amendments, on May 22, 2021, by the following vote: Yeas 30, Nays
913		-	0.
914		-	______________________________
915		-	Secretary of the Senate
916		-	APPROVED: __________________
917		-	Date
918		-	__________________
919		-	Governor
	911	+	* * * * *