Starting January 2022, Texas Legislature enacted some significant changes to the Texas Lien statute. Although these changes do not affect bond claims on public projects in Texas, the new legislature significantly modified the existing laws related to the private project in Texas. It should be noted, these changes only apply to original contracts entered on or after January 1, 2022. For those contracts entered prior to January 1, 202, the previous law applies.
The following notable changes are:
- The second-month notice requirements for the second-tier claimants on non-residential projects are now eliminated. This means that prime contractors will no longer have a notice from remote subcontractors and material suppliers that they have not been paid. Prior to the enacted changes, the remote subcontractors and suppliers on commercial private jobs were required to provide the general contractor with a notice of non-payment a month in advance of the notice to the Owner. As the result, it gave the general contractor the ability to resolve the payment issue with the remote claimant prior to the Owner’s involvement. Without the second-month notice, the general contractor will have to be more vigilant and heavily rely on its subcontractors to secure waivers from the remote subcontractor and suppliers.
- The statute of limitation to file suit to foreclose on a lien has been reduced from two years to one year with the ability to extend it for an additional year.
- There are now forms for notices and retainage that have been included in the statute. Claimant’s notices must substantially match the forms in the statute.