Monthly Archives: July 2015

The Statutory Mechanic’s Lien: Perfection Is Key

This article will be the first of a series of articles on the Statutory Mechanic’s Lien. We will discuss the process of filing and perfecting the lien under The Texas Property Code. We will also discuss some common errors that occur when filing and how those errors could result in major problems for your company.

Today we will start with the Affidavit. With regard to the affidavit, The Texas Property code reads as follows:

53.052. Filing of Affidavit

(a)  Except as provided by Subsection (b), the person claiming the lien must file an affidavit with the county clerk of the county in which the property is located or into which the railroad extends not later than the 15th day of the fourth calendar month after the day on which the indebtedness accrues.

(b)  A person claiming a lien arising from a residential construction project must file an affidavit with the county clerk of the county in which the property is located not later than the 15th day of the third calendar month after the day on which the indebtedness accrues.

(c)  The county clerk shall record the affidavit in records kept for that purpose and shall index and cross-index the affidavit in the names of the claimant, the original contractor, and the owner. Failure of the county clerk to properly record or index a filed affidavit does not invalidate the lien.

It is important to understand that Chapter 53 of the Property code is very specific and requires knowledge of the statutory definitions of the phrases used in the code. For example, in the portion above, “the day on which the indebtedness accrues” is important. It actually helps to mark the filing deadline. However, “indebtedness accrues” is not a general term. Texas Property Code § 53.053 explains when indebtedness accrues.

53.053. Accrual of Indebtedness

(a)  For purposes of Section 53.052, indebtedness accrues on a contract under which a plan or plat is prepared, labor was performed, materials furnished, or specially fabricated materials are to be furnished in accordance with this section.

(b)  Indebtedness to an original contractor accrues:

(1)  on the last day of the month in which a written declaration by the original contractor or the owner is received by the other party to the original contract stating that the original contract has been terminated; or

(2)  on the last day of the month in which the original contract has been completed, finally settled, or abandoned.

(c)  Indebtedness to a subcontractor, or to any person not covered by Subsection (b) or (d), who has furnished labor or material to an original contractor or to another subcontractor accrues on the last day of the last month in which the labor was performed or the material furnished.

(d)  Indebtedness for specially fabricated material accrues:

(1)  on the last day of the last month in which materials were delivered;

(2)  on the last day of the last month in which delivery of the last of the material would normally have been required at the job site; or

(3)  on the last day of the month of any material breach or termination of the original contract by the owner or contractor or of the subcontract under which the specially fabricated material was furnished.

(e)  A claim for retainage accrues on the earliest of the last day of the month in which all work called for by the contract between the owner and the original contractor has been completed, finally settled, terminated, or abandoned.

As you can see, a lack of understanding could cause you to miss your deadline. Please check back next week as we continue the series and outline the specific requirements of the affidavit.

Nothing here is intended to be legal advice and should not be interpreted as such. Please consult a lawyer for any and all of your legal questions. Please feel free to call us at 832-930-0529 with any issues your company may be having. You can also visit our website www.StephensBell.com

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