Lien & Bond Claim Masterclass — Everything They Don’t Tell You (But Should!) | Texas Webinar by Rebecca A. Hicks

In this SunRay Construction Solutions webinar, Texas construction law attorney Rebecca A. Hicks explains what steps to take to protect their lien and bond claim rights and, critically, the deadlines that govern those rights.

The Three Questions That Control Everything

There are three fundamental questions that must be answered before anyone can perfect a lien or bond claim in Texas. Without the answers to these questions, protecting payment rights is nearly impossible:

1. What kind of project is it?

2. What is the claimant’s position in the construction chain?

3. Is there a payment bond?

Each of these answers determines which rules apply, and which deadlines must be followed.

Gathering Accurate Project Information

Project information is the foundation of every lien or bond claim. Without accurate project details, even experienced professionals cannot properly calculate deadlines or determine the correct notice requirements.

The type of project and the contractual relationships on that project directly impact:

• The timing of required notices

• The identity of parties who must receive notice

• Whether a lien or bond claim applies

• The applicable statutory framework

The steps required to perfect a claim also depend heavily on where the claimant sits in the construction chain.

What Kind of Project Is It?

In Texas, projects generally fall into four categories:

• Private works projects

• State or local public works projects

• Federal public works projects

• Public-private partnerships

Correctly identifying the project type is critical because each category is governed by different statutes and procedures.

Private Projects: Governed by Chapter 53

A private project is any project owned by a private entity or individual. If an LLC, corporation, company, or individual holds title to the property (as shown on the deed), the project is private.

Private projects are governed by Chapter 53 of the Texas Property Code. Most projects handled by practitioners fall into this category.

On private projects:

• A mechanics lien is the primary remedy.

• Many projects are not bonded.

• Even if a private project is bonded, a mechanics lien must still typically be filed.

A common mistake is treating a private bonded project like a public job and sending only bond notices without filing a lien. That error can be fatal. Sureties will not assist claimants in correcting procedural mistakes. If the notice is incorrect or late, the surety will simply deny the claim after the deadline passes.

State and Local Public Works: Governed by Chapter 2253

State and local public works projects include work for entities such as

• TxDOT

• Cities (e.g., City of Dallas, City of Houston, City of Fort Worth)

• Counties

• School districts

These projects are governed by Chapter 2253 of the Texas Government Code. They are always bonded.

On these projects:

• Mechanics liens do not apply.

• A bond claim must be made.

• Notice requirements are strict and technical.

• Sending a “lien notice” on a public project will not perfect a bond claim. The surety will not notify the claimant of errors.

Federal Projects: Governed by the Miller Act

Federal projects, such as work on military bases, post offices, and federal buildings, are governed by the Miller Act (40 U.S.C. § 3131).

These projects:

• Always require a payment bond.

• Do not allow mechanics liens.

• Have comparatively simpler claim procedures.

In many respects, making a claim under federal law is more straightforward than under Texas state law.

Why Private Projects Allow Liens and Public Projects Do Not

The underlying policy is simple. On private projects, subcontractors and suppliers add value to privately owned property. The law gives them the right to assert a mechanic’s lien against that property. If all requirements are met, they can foreclose on that interest.

On public projects, foreclosure against public property (such as highways) would be inappropriate because taxpayers ultimately own it. Instead, the law substitutes a payment bond. Claims are made against the bond, not the property.

Public-Private Partnerships

Public-private partnerships are increasingly common. These involve collaboration between a government entity and a private developer.

Examples include:

• Clyde Warren Park in Dallas

• The Omni Hotel in downtown Dallas

• Tollway developments

Even though private entities may build or operate the improvements, Texas law treats these projects as government projects. Therefore, Chapter 2253 bond claim rules apply.

Position in the Construction Chain

The second critical question is the claimant’s position in the construction chain. Construction is contract-driven. The owner contracts with a general contractor (also known as a prime or original contractor). That contractor hires subcontractors, who may hire second-tier or third-tier subcontractors and suppliers.  

A prime or original contractor is simply anyone contracted directly with the owner. For example:

• If a plumber typically works as a first-tier subcontractor but is hired directly by the owner, that plumber is considered the general contractor for lien purposes on that job.

Additionally, when an owner and contractor are under common ownership or control, Texas law may treat them as one entity for notice purposes.

Is There a Payment Bond?

The third key question is whether a payment bond exists.

• On state or local public projects, there will always be a payment bond.

• On federal projects, there will always be a payment bond.

• On private projects, there may or may not be a payment bond.

Any private project can be bonded. Claimants must ask.

What Is a Payment Bond?

A payment bond is essentially an insurance policy purchased by the general contractor. It guarantees that subcontractors and suppliers will be paid if the general contractor fails to pay them.

The surety (an insurance company) stands behind the contractor’s payment obligations.

Claimants are entitled to request and review the payment bond. Confusion often arises between:

• Payment bonds (which protect subcontractors and suppliers)

• Performance bonds (which protect the owner by guaranteeing completion)

For payment claims, only the payment bond is relevant.

Subcontractor Bonds

Although Texas law does not require subcontractors to provide bonds, a general contractor may require it by contract. If a subcontract includes a bond requirement and the subcontractor signs it, the bond becomes enforceable. On large projects, subcontractor bonds are increasingly common.

Obtaining the Payment Bond

On government projects, a payment bond can be requested from the contracting agency. If necessary, an open records request may be submitted.

On private projects, the bond can be requested from:

• The general contractor

• The contractor’s bonding agent

Meeting minutes from public board approvals may also contain copies of bonds.

Verifying Ownership: Do Not Rely on Appraisal Records Alone

Ownership must be verified through the recorded deed in the county's real property records. Central Appraisal District records may be outdated for months. If notice is sent to the wrong owner based on outdated records, the claim may fail.

Texas law places the burden on the claimant to send notice to the correct party.

Deadlines: Strict and Unforgiving

Texas courts strictly enforce lien and bond claim deadlines. If a deadline is missed, the claim is lost. There is no do-over.

Deadlines run from the date labor or materials were furnished, not from the billing date.

For suppliers, the furnishing date controls—even if materials are never incorporated into the project.

Private Project Deadlines

General Contractors

• Must file a mechanics lien by the 15th day of the fourth month after the last month work was performed.

Subcontractors and Suppliers

• Must send notice by the 15th day of the third month after each month unpaid work was performed.

• Must file a mechanics lien by the 15th day of the fourth month after the last month work was performed.

Multiple monthly notices may be required if work continues without payment.

State and Local Government Deadlines

On these projects:

• A second-month preliminary notice may be required.

• A third-month notice serves as the formal bond claim.

These deadlines arise quickly. Missing the second-month notice can eliminate the claim.

Federal (Miller Act) Deadlines

• Notice must be sent within 90 days after the last day labor or materials were furnished.

The Statutory Form Requirement

For private projects, the third-month notice must substantially comply with the statutory form provided in Chapter 53.

Using outdated or informal notice templates can invalidate a claim.

There is no statutory form for the mechanics lien affidavit, but required elements are listed in the statute. A proper legal description—obtained from the deed—is critical.

Recording the Mechanics Lien

A mechanics lien must be:

1. Filed in the county with the property records.

2. Followed by notice to all parties in the construction chain within five days of recording.

The county clerk does not send notice on the claimant’s behalf.

A lawsuit to foreclose must be filed within one year of recording the lien.

Bond Claims on Private Projects

If a private project is bonded:

• The third-month notice should also be sent to the surety.

• That notice can serve as the bond claim.

• A mechanics lien should still be filed.

If unpaid, a suit must be filed within one year of making the bond claim.

Retainage

Retainage and reserved funds involve additional complexities under Texas law. The rules governing retainage notices are technical and often require separate analysis beyond basic lien and bond claim procedures.

Final Takeaway

Texas lien and bond claim law requires precision. Professionals must:

• Identify the project type correctly

• Determine their position in the construction chain

• Confirm whether a payment bond exists

• Verify ownership through recorded deeds

• Use the correct statutory forms

• Track and meet every deadline

Missing a deadline, sending notice to the wrong party, or using the wrong form can eliminate a claim entirely. In Texas, compliance is exacting and unforgiving, but with proper project information and careful attention to deadlines, payment rights can be protected.

Common Questions Contractors Ask

1. Are subcontractors required to have a performance and payment bond?

No. Nothing in Texas law requires a subcontractor to have a payment or performance bond. However, a general contractor may require a subcontractor to provide a bond through the subcontract agreement. If the subcontractor signs a contract requiring a bond, that contractual requirement governs.

2. Should a claimant send a separate third-month fund trapping notice and a separate third-month bond notice on a commercial private project?

No. The claimant should send the third-month fund trapping notice and add the bond company (surety) as a recipient. That notice will also act as the bond claim.

3. Why are bonds in Texas not recorded like they are required to be recorded in Florida?

Private bonds are supposed to be recorded in Texas. However, there is no meaningful enforcement mechanism to ensure that they are recorded.

4. As a supplier, what is considered the first day on the job, when materials are furnished or when they are incorporated?

The date materials are furnished controls. Incorporation into the project is not required for lien or bond rights to arise.

5. I’m confused about retainage notices. Should they be sent at the beginning of the project or at the end?

A notice for unpaid contractual retainage is not sent at the beginning of the project. It is sent near the end, after the relevant work is completed, terminated, or abandoned.

Under Texas law, a claimant (other than an original contractor) whose contract provides for retainage must send a notice of claim for unpaid retainage within a specific 30-day window tied to completion or termination events, not at project commencement.

6. I understand that the retainage notice must be sent within 30 days of completion of work. Is that the completion of my work as a subcontractor, or the GC’s work?

In most cases, it is based on your completion of work as the claimant (subcontractor or supplier).

Assuming the general contractor was not terminated and did not abandon the project, your deadline is calculated from your contract completion date, not the GC’s.

Specifically, under Texas Property Code § 53.057, a claimant must send notice no later than the earlier of:

1. The 30th day after the date the claimant’s contract is completed, terminated, or abandoned; or

2. The 30th day after the date the original contract is terminated or abandoned.

7. If I'm a supplier, does a retainage notice go out when you furnish the materials or is it when it's incorporated?

The retainage notice deadline would be in relation to the date the materials were furnished.