1. Purpose of a Mechanic’s Lien

A mechanic’s lien transforms unpaid labor or materials into a security interest against the improved real estate. If the debt remains unresolved, the lienholder may foreclose and force a sale, converting the property into the funds owed.

2. Texas Lien Paths

• Constitutional lien – Automatic for an original contractor in direct contract with the owner. No filing is required, but it covers only the unpaid contract balance still in the owner’s hands.
• Statutory lien – Available to subcontractors, suppliers, specialty fabricators, and laborers who strictly follow Chapter 53’s notice and filing rules.

3. Statutory Deadlines and the “Notice of Unpaid Balance”

Commercial projects

1. Notice of Unpaid Balance (third-month notice)
   
   • Send by certified mail on or before the fifteenth day of the third month following each month of work or delivery that remains unpaid.
   • Address it to both the owner and the prime contractor.
   • The notice must contain:
     
     • A bold, statutory warning header.
     • Claimant’s name, address, and employer’s name.
     • Description of the labor or materials.
     • The month(s) furnished.
     • The dollar amount unpaid.
     • A short property description sufficient for identification.
2. Lien affidavit
   
   • File with the county clerk no later than the fifteenth day of the fourth month after last furnishing.
3. Suit to foreclose
   
   • File within one year after the last day the affidavit could have been filed, unless a recorded written extension gives up to one additional year.

Residential projects

• A second-month notice (15th day of the second month) still applies, followed by the third-month Notice of Unpaid Balance.
• File the lien affidavit by the fifteenth day of the third month after last furnishing.

Retainage claims

• Deliver a separate Notice of Contractual Retainage early in the job.
• File the retainage lien affidavit within thirty days after completion, termination, or abandonment of the prime contract.

Homesteads

• The construction contract must be written, signed by both spouses, filed before work starts, and referenced in the lien affidavit—otherwise the lien is void.

4. Public and Federal Work

• Texas public projects – A payment bond replaces the lien. Send third-month notice, then sue the bond within one year after final completion of the prime contract.
• Federal projects (Miller Act) – Send a ninety-day notice to the prime and surety; file suit on the bond in federal court after day 91 but within one year of last furnishing.

5. Best Practices for Contractors, Subs, and Suppliers

1. Calendar every statutory date at contract award.
2. Mail the Notice of Unpaid Balance—even when payment merely feels slow—to preserve rights.
3. Keep meticulous records: contracts, change orders, delivery tickets, certified-mail receipts.
4. Monitor owner funding and prime-contractor payments to avoid trust-fund diversion.
5. File the lien or bond claim promptly if payment stalls.

6. Best Practices for Owners and Developers

1. Track all preliminary and Unpaid Balance notices to know who can perfect a lien.
2. Release funds only against unconditional lien waivers that mirror the pay-application amount.
3. Issue joint checks when payment risks surface.
4. Record notice of completion or termination to start the final lien clock.
5. Clear valid liens swiftly—by payment, bonding around, or negotiated release—to keep title marketable.

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Mechanic’s liens are both shield and sword: they secure payment for the project team and spur owners to police cash flow. Mastering Chapter 53 deadlines—including the mandatory Notice of Unpaid Balance—plus homestead nuances and public-bond substitutes, protects receivables and preserves title. When questions arise, our firm can guide parties through this statutory maze toward prompt, equitable resolution.

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