Lien Laws Update: Georgia
Texas passed a litany of new lien laws back in March of 2022. Knowing more about those lien laws and how they can impact both contractors and owners is a crucial part of the construction process
On the whole, it extends the ability to make a claim against a project to design professionals and subcontractors. Let's take a deeper look at the changes and the impact they can make.
The Biggest Changes
There are a few big changes to lien laws in Texas worth noting. Let's go through them all and see how
they can impact a project. First is that persons entitled to lien have been expanded. They now include a
licensed architect, surveyor, or engineer that provides services for preparing a design, plan, survey, plat,
drawing, or any other specification.
Moreover, the subcontractor category now includes anyone who furnishes materials or labor to either the original contractor or a related subcontractor. Previous laws indicated that subcontractors were of a different tier, which is now different.
There have also been updates to the definition of retainage. The old rules described the 10% that the owner was required to withhold from payments according to the original contract, lasting throughout the project. Retainage now refers to how much is withheld according to the contract; it can be determined through the contract.
There have also been statutory changes worth noting. The first statutory notice change is a notice to
protect a claim for any unclaimed labor. The second statutory notice is to protect the claim for any
unpaid contractual retainage.
There is also the matter of notice timeline. Previously, there had been a second-month notice option. That has since been removed for both unpaid material and labor. Only the third-month notice is required now, though it has to be sent by the 15th day following the third month since the initial labor or materials were provided.
There are also lien waivers that need to be notarized. Any notices can be serviced through common couriers like UPS or FedEx, so long as they are traceable or offer private delivery that can confirm proof that the recipient has received it.
Finally, there has been a reduction to the statute of limitations for filing a suit to foreclose on a lien. The original timeline was two years; it is now just one, though there is an option to be able to extend the statute of limitations for an additional year should it be needed.
Understand the Lien laws
At the end of the day, contractors and project owners alike need to know the new lien laws in Texas.
Having a better understanding means knowing who can file a lien against the property for work done
The laws can be a bit difficult to decipher, but it has opened doors for filing a lien, particularly when it comes to subcontractors. Having a better understanding of the lien laws can allow your next project to cover all bases. If you have a construction company and need assistance getting your construction payments, Nationwide Notice, Inc is here to help. As a self-service and full-service preliminary notice and lien service company, we specialize in helping protect receivables for construction companies of all sizes. We assist with lien laws and related documents for construction companies based on the requirements of their state. If you are interested in learning more about our services, click here. You can also learn about what sets us apart on this page to get started on securing your payments with Nationwide Notice, Inc.