Bill Text: TX HB3553 | 2013-2014 | 83rd Legislature | Introduced
Bill Title: Relating to mechanic's, contractor's, or materialman's liens.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2013-03-25 - Referred to Business & Industry [HB3553 Detail]
Download: Texas-2013-HB3553-Introduced.html
2013S0542-1 03/06/13 | ||
By: Oliveira | H.B. No. 3553 |
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relating to mechanic's, contractor's, or materialman's liens. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subchapter A, Chapter 53, Property Code, is | ||
amended by adding Section 53.0001 to read as follows: | ||
Sec. 53.0001. LEGISLATIVE INTENT; LIBERAL CONSTRUCTION. | ||
(a) It is the intent of the legislature to provide assurance of | ||
payment to laborers, contractors, subcontractors, and certain | ||
service providers who make improvements to real property. | ||
(b) This chapter shall be liberally construed in favor of a | ||
claimant for payment under a contract for labor or material for an | ||
improvement to real property. | ||
SECTION 2. Subdivision (15), Section 53.001, Property Code, | ||
is amended to read as follows: | ||
(15) "Completion" [ |
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later of: | ||
(A) the 30th day after the date of the final | ||
inspection and written final acceptance by the governmental body | ||
that issued the building permit for the house, building, or | ||
improvement; or | ||
(B) the date of actual completion of the work, | ||
including any extras or change orders reasonably required or | ||
contemplated under the original contract, other than warranty work | ||
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contract. | ||
SECTION 3. Subsections (a), (c), (d), and (e), Section | ||
53.021, Property Code, are amended to read as follows: | ||
(a) A person has a lien if: | ||
(1) the person [ |
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(A) for construction or repair [ |
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of[ |
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fixture,[ |
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(B) that enhance the value, use, productivity, | ||
enjoyment, or aesthetics of real property; and | ||
(2) the person [ |
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a contract with the owner or the owner's agent, [ |
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(c) An architect, engineer, or surveyor who prepares a plan | ||
or plat under or by virtue of a written contract with the owner or | ||
the owner's agent[ |
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actual or proposed design, construction, or repair of improvements | ||
on real property or the location of the boundaries of real property | ||
has a lien on the property. | ||
(d) A person who provides labor, plant material, or other | ||
supplies for the installation of landscaping for a house, building, | ||
or improvement, including the construction of a retention pond, | ||
retaining wall, berm, irrigation system, fountain, or other similar | ||
installation, under or by virtue of a written contract with the | ||
owner or the owner's agent, contractor, or subcontractor[ |
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(e) A person who performs labor as part of, or who furnishes | ||
labor or materials for, the demolition of a structure on real | ||
property under or by virtue of a written contract with the owner of | ||
the property or the owner's agent, [ |
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or subcontractor has a lien on the property. | ||
SECTION 4. Subchapter B, Chapter 53, Property Code, is | ||
amended by adding Section 53.0211 to read as follows: | ||
Sec. 53.0211. OWNER'S REPRESENTATIVE; NOTICES. (a) An | ||
owner of real property who enters into an original contract | ||
creating a lien under this chapter may designate a person in this | ||
state as the owner's representative to whom a notice or other | ||
documents may be sent under this chapter. | ||
(b) Any notices required by this chapter to be sent to the | ||
owner may be sent to the owner or to the owner's representative. | ||
SECTION 5. Section 53.022, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.022. PROPERTY TO WHICH LIEN EXTENDS. (a) The lien | ||
extends to the real property on which the labor was performed or | ||
materials furnished and to any house, building, fixtures, or | ||
improvements on the property[ |
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(b) If the real property is located [ |
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lien extends to each lot on which the house, building, fixture, or | ||
improvement is located. | ||
(c) If the real property is [ |
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the lien extends to not more than 50 acres of the real property on | ||
which the house, building, fixture, or improvement is located | ||
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SECTION 6. Subsection (a), Section 53.026, Property Code, | ||
is amended to read as follows: | ||
(a) A person who labors[ |
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or furnishes labor or materials under a direct contractual | ||
relationship with another person is considered to be in direct | ||
contractual relationship with the owner and has a lien as an | ||
original contractor, if: | ||
(1) [ |
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ownership of voting stock, interlocking directorships, or | ||
otherwise,[ |
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that other person can effectively control the owner [ |
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(2) the contract between [ |
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without good faith intention of the parties that the other person | ||
was to perform the contract. | ||
SECTION 7. Chapter 53, Property Code, is amended by adding | ||
Subchapter B-1 to read as follows: | ||
SUBCHAPTER B-1. NOTICE OF COMMENCEMENT | ||
Sec. 53.031. NOTICE OF COMMENCEMENT. (a) If an owner | ||
enters into an original contract that creates a lien under Section | ||
53.021(a) on the owner's property, the owner shall, before the | ||
contractor furnishes any labor or materials to the property: | ||
(1) file a notice of commencement that complies with | ||
this subchapter with the county clerk of each county in which the | ||
property is located; | ||
(2) post the notice of commencement in a conspicuous | ||
place on the property; and | ||
(3) furnish the notice of commencement to the original | ||
contractor. | ||
(b) The owner shall ensure that the notice of commencement | ||
remains posted on the property until completion of the work. | ||
Sec. 53.032. PAYMENT BOND. A copy of the payment bond, if | ||
any, must be filed with the notice of commencement filed with the | ||
county clerk and attached to the back of the notice of commencement | ||
at the time the notice is posted on the property. | ||
Sec. 53.033. CONTENTS OF NOTICE. The notice of | ||
commencement must be in the form of an affidavit sworn to by the | ||
owner and must contain: | ||
(1) a description of the property, legally sufficient | ||
for identification, and the street address of the property, if the | ||
street address is available; | ||
(2) a general description of the work to be performed | ||
on the property; | ||
(3) the name and address of all persons who own all or | ||
part of the property, and a description of the type of interest of | ||
each owner of the property; | ||
(4) the name and address of each person who owns all or | ||
part of the fee simple title to the property, if different than the | ||
owner; | ||
(5) the name and address of the original contractor; | ||
(6) the name and address of the surety on a payment | ||
bond applicable to the construction or repair, if any, and the | ||
amount of the bond; | ||
(7) the name and address of any person making a loan | ||
for the work; and | ||
(8) the name and address of the owner's | ||
representative, if any. | ||
Sec. 53.034. SUBCONTRACTOR REQUEST FOR NOTICE. (a) A | ||
subcontractor may make a written request for a copy of the notice of | ||
commencement from the owner or reputed owner. | ||
(b) The owner shall provide a copy of the notice of | ||
commencement to the subcontractor not later than the 10th day after | ||
receipt of the subcontractor's request. | ||
(c) If the owner fails to give the notice to the | ||
subcontractor as required by Subsection (b), the subcontractor may | ||
delay sending the notice required under Section 53.056(c) until not | ||
later than the 20th day after the date the notice of commencement is | ||
provided to the subcontractor. | ||
Sec. 53.035. LIEN NOTICE BY SUBCONTRACTOR NOT REQUIRED. A | ||
subcontractor is not required to send the notice required by | ||
Section 53.056(c) if, at the time the subcontractor furnishes the | ||
first labor or material to an owner's property, the owner has not | ||
complied with Sections 53.031 and 53.032. | ||
Sec. 53.036. AMENDED NOTICE OF COMMENCEMENT. (a) The | ||
owner shall file with the county clerk of each county in which the | ||
owner's property is located and post on the owner's property an | ||
amended notice of commencement if any information contained in an | ||
existing notice of commencement changes or is determined to be | ||
incorrect. | ||
(b) The owner shall provide a copy of the amended notice to | ||
each subcontractor who sent a notice to the owner under Section | ||
53.056(c) or made a request for a notice under Section 53.034. | ||
(c) If the owner fails to provide the copy of the amended | ||
notice to the subcontractor, any new or changed information in the | ||
amended notice of commencement may not be used as a basis to | ||
invalidate a notice provided or a lien claim filed by the | ||
subcontractor under this chapter. | ||
Sec. 53.037. RELIANCE ON NOTICE. (a) An original | ||
contractor or subcontractor required to send or file a notice or | ||
file a lien claim under this chapter may rely on the validity of the | ||
information contained in a notice of commencement and any amended | ||
notice of commencement. | ||
(b) A deficiency or error in a notice provided or a lien | ||
claim filed under this chapter may not be used to invalidate the | ||
notice or lien claim if the deficiency or error resulted from | ||
reliance on incorrect information provided in the notice of | ||
commencement or applicable amended notice of commencement. | ||
Sec. 53.038. LIABILITY OF OWNER FOR INCORRECT INFORMATION. | ||
If the notice of commencement or amended notice of commencement | ||
contains incorrect information, the owner and an individual signing | ||
the notice on behalf of the owner, if any, are liable to a lien | ||
claimant for all damages, including damages for any loss of lien or | ||
bond rights, attorney's fees, expenses, and costs suffered as a | ||
result of the lien claimant's reliance on the incorrect | ||
information. | ||
SECTION 8. Section 53.052, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.052. FILING OF LIEN CLAIM [ |
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as provided by Subsection (b), the person claiming the lien must | ||
file a lien claim [ |
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in which the property is located [ |
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the original contract [ |
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(b) A person claiming a lien arising from a residential | ||
construction project must file a lien claim [ |
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county clerk of the county in which the property is located not | ||
later than the 110th [ |
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the date of completion, termination, or abandonment of the original | ||
contract [ |
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(c) Not later than the 10th day after the date a | ||
subcontractor files a lien claim, the subcontractor must send a | ||
copy of the lien claim to the owner or reputed owner and the | ||
original contractor to the owner's and contractor's last known | ||
addresses. Unless the owner was prejudiced by receiving late | ||
notice of a lien claim under this subsection, the receipt of a late | ||
notice of the lien claim [ |
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lien. | ||
SECTION 9. Section 53.054, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.054. CONTENTS OF LIEN CLAIM [ |
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lien claim [ |
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[ |
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(1) a sworn statement of the amount of the claim; | ||
(2) the name and last known address of the owner or | ||
reputed owner; | ||
(3) a general statement of the kind of work done and | ||
materials furnished by the claimant [ |
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(4) the name and last known address of the person by | ||
whom the claimant was employed or to whom the claimant furnished the | ||
materials or labor; | ||
(5) the name and last known address of the original | ||
contractor; | ||
(6) a description, legally sufficient for | ||
identification, of the property sought to be charged with the lien; | ||
and | ||
(7) the claimant's name, mailing address, and, if | ||
different, physical address[ |
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(b) The claimant may attach the information required by | ||
Subsection (a) to the lien claim [ |
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(c) The lien claim [ |
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individual items of work done or material furnished [ |
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terms, [ |
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SECTION 10. Section 53.056, Property Code, is amended to | ||
read as follows: | ||
Sec. 53.056. SUBCONTRACTOR [ |
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TO OWNER OR ORIGINAL CONTRACTOR. (a) Except as provided by | ||
Section 53.035 [ |
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section to the owner, or reputed owner, and the original contractor | ||
for the lien to be valid. | ||
(b) The notice must include: | ||
(1) a general description of the labor and materials | ||
furnished or to be furnished by the subcontractor; | ||
(2) the name, address, and telephone number of the | ||
subcontractor; | ||
(3) the name of the person who contracted with the | ||
subcontractor for the labor or materials; and | ||
(4) a sufficient description of the real property to | ||
which the labor and materials are furnished, or are to be furnished, | ||
including a legal description, subdivision plat, or street address | ||
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(c) Except as provided by Section 53.034(c), the | ||
subcontractor's notice must be sent not later than the 30th day | ||
after the first date the subcontractor provides the labor or | ||
materials for the improvement of the owner's property. If a | ||
subcontractor fails to send a timely notice under this subsection | ||
or Section 53.034(c), the subcontractor may claim a lien only for | ||
the labor and materials furnished not earlier than the 30th day | ||
before the date the notice was sent and for all labor and materials | ||
furnished after the date the notice was sent [ |
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(d) A subcontractor may send only one notice to an owner | ||
under this section with respect to all labor and materials | ||
furnished or to be furnished for the improvement of the owner's | ||
property [ |
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(e) If the notice is sent by registered or certified mail, | ||
the effective date of the notice is the date the notice is deposited | ||
for mailing. The effective date of a notice delivered by other | ||
means is the date the notice is received [ |
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(f) The notice is not defective if, after the date of the | ||
notice, the subcontractor furnishes labor or materials that are not | ||
within the scope of the notice's general description of the labor | ||
and materials furnished or to be furnished [ |
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SECTION 11. The heading to Subchapter D, Chapter 53, | ||
Property Code, is amended to read as follows: | ||
SUBCHAPTER D. BILLS PAID AFFIDAVIT [ |
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SECTION 12. The heading to Section 53.085, Property Code, | ||
is amended to read as follows: | ||
Sec. 53.085. BILLS PAID AFFIDAVIT REQUIRED. | ||
SECTION 13. The heading to Subchapter E, Chapter 53, | ||
Property Code, is amended to read as follows: | ||
SUBCHAPTER E. TERMINATION OR ABANDONMENT OF WORK [ |
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SECTION 14. Subsections (a) and (b), Section 53.107, | ||
Property Code, are amended to read as follows: | ||
(a) Not later than the 10th day after the date an original | ||
contract is terminated or the original contractor abandons | ||
performance under the original contract, the owner shall give | ||
notice to each subcontractor who[ |
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(1) before the date of termination or abandonment, | ||
sent [ |
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(2) before the date of termination or abandonment, | ||
sent to the owner [ |
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request for notice of termination or abandonment; or | ||
(3) did not send a written request for notice of | ||
termination or abandonment or a notice required under Section | ||
53.056, but provided to the owner written notice that the | ||
subcontractor provided labor, material, or services to the owner's | ||
property. | ||
(b) The notice must contain: | ||
(1) the name and address of the owner; | ||
(2) the name and address of the original contractor; | ||
(3) a description, legally sufficient for | ||
identification, of the real property on which the improvements are | ||
located; | ||
(4) a general description of the improvements agreed | ||
to be furnished under the original contract; | ||
(5) a statement that the original contract has been | ||
terminated or that performance under the contract has been | ||
abandoned; and | ||
(6) the date of the termination or abandonment[ |
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SECTION 15. Subsection (a), Section 53.122, Property Code, | ||
is amended to read as follows: | ||
(a) Except as provided by [ |
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53.124(e), perfected mechanic's liens that have the same inception | ||
date are on equal footing without reference to the date of filing | ||
the [ |
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SECTION 16. The heading to Section 53.124, Property Code, | ||
is amended to read as follows: | ||
Sec. 53.124. INCEPTION OF [ |
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SECTION 17. Subsections (a) and (e), Section 53.124, | ||
Property Code, are amended to read as follows: | ||
(a) Except as provided by Subsection (e), [ |
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original contractor and subcontractor is the commencement of | ||
construction of improvements or delivery of materials to the land | ||
on which the improvements are to be located and on which the | ||
materials are to be used. | ||
(e) The time of inception of a lien for an architect, | ||
engineer, surveyor, landscape original contractor or | ||
subcontractor, or demolition original contractor or subcontractor | ||
is the date the person files a lien claim [ |
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SECTION 18. Sections 53.152, 53.154, 53.156, 53.157, | ||
53.158, and 53.172, Property Code, are amended to read as follows: | ||
Sec. 53.152. RELEASE OF CLAIM OR LIEN. (a) If an owner, | ||
the original contractor, or a person who pays or satisfies any | ||
indebtedness secured by a lien filed under this chapter submits to | ||
the lien holder [ |
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holder shall[ |
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indebtedness and any lien claimed[ |
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indebtedness paid. [ |
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(b) A release of lien must be furnished not later than the | ||
10th day after the date of receipt of a written request and must be | ||
in a form that would permit it to be filed of record. | ||
Sec. 53.154. FORECLOSURE OF LIEN; VENUE. (a) A mechanic's | ||
lien may be foreclosed only on judgment of a court of competent | ||
jurisdiction foreclosing the lien and ordering the sale of the | ||
property subject to the lien. | ||
(b) A suit to foreclose the lien must be brought in a court | ||
of competent jurisdiction in the county in which the real property | ||
that is subject to the lien is located. | ||
Sec. 53.156. COSTS AND ATTORNEY'S FEES. In any proceeding | ||
to foreclose a lien or to enforce a claim against a bond issued | ||
under Subchapter H[ |
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any lien or claim is invalid or unenforceable in whole or in part, | ||
the court shall award costs and reasonable attorney's fees as are | ||
equitable and just. With respect to a lien or claim arising out of | ||
a residential construction contract, the court is not required to | ||
order the property owner to pay costs and attorney's fees under this | ||
section. | ||
Sec. 53.157. DISCHARGE OF LIEN. A mechanic's lien claim [ |
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may be discharged of record by: | ||
(1) recording a lien release signed by the claimant | ||
under Section 53.152; | ||
(2) failing to institute suit to foreclose the lien in | ||
the county in which the property is located within the period | ||
prescribed by Section 53.158[ |
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(3) recording the original or certified copy of a | ||
final judgment or decree of a court of competent jurisdiction | ||
providing for the discharge[ |
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Sec. 53.158. PERIOD FOR BRINGING SUIT TO FORECLOSE LIEN. | ||
(a) Except as provided by Subsection (b), suit must be brought to | ||
foreclose the lien within two years after the last day a claimant | ||
may file the lien claim [ |
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(b) For a claim arising from a residential construction | ||
project, suit must be brought to foreclose the lien within one year | ||
after the last day a claimant may file a lien claim [ |
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under Section 53.052 [ |
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Sec. 53.172. BOND REQUIREMENTS. The bond must: | ||
(1) describe the property on which the liens are | ||
claimed; | ||
(2) refer to each lien claimed in a manner sufficient | ||
to identify it; | ||
(3) be in an amount that is double the amount of the | ||
liens referred to in the bond unless the total amount claimed in the | ||
liens exceeds $60,000 [ |
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an amount that is the greater of 1-1/2 times the amount of the liens | ||
or the sum of $60,000 [ |
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(4) be payable to the parties claiming the liens; | ||
(5) be executed by: | ||
(A) the party filing the bond as principal; and | ||
(B) a corporate surety authorized and admitted to | ||
do business under the law in this state and licensed by this state | ||
to execute the bond as surety, subject to Sections | ||
3503.001-3503.005, Insurance Code [ |
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(6) be conditioned substantially that the principal | ||
and sureties will pay to the named obligees or to their assignees | ||
the amount that the named obligees would have been entitled to | ||
recover if their claims had been proved to be valid and enforceable | ||
liens on the property. | ||
SECTION 19. The heading to Section 53.173, Property Code, | ||
is amended to read as follows: | ||
Sec. 53.173. NOTICE OF BOND TO INDEMNIFY. | ||
SECTION 20. Subsections (c) and (d), Section 53.173, | ||
Property Code, are amended to read as follows: | ||
(c) The notice must be served on each obligee by mailing a | ||
copy of the notice and the bond to the obligee by certified United | ||
States mail, return receipt requested, addressed to the claimant at | ||
the address stated in the lien claim [ |
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(d) If the claimant's lien claim [ |
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the claimant's address and the address is not available to the | ||
principal in a notice sent by the lien claimant under Section | ||
53.056, the notice is not required to be mailed to the claimant. | ||
SECTION 21. Subsection (f), Section 53.254, Property Code, | ||
is amended to read as follows: | ||
(f) A [ |
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subchapter that relates to a homestead must contain the following | ||
notice conspicuously printed, stamped, or typed in a size equal to | ||
at least 10-point boldface or the computer equivalent, at the top of | ||
the page: | ||
"NOTICE: THIS IS NOT A LIEN. THIS IS ONLY [ |
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SECTION 22. Subsection (b), Section 53.255, Property Code, | ||
is amended to read as follows: | ||
(b) The disclosure statement must read substantially | ||
similar to the following: | ||
"KNOW YOUR RIGHTS AND RESPONSIBILITIES UNDER THE LAW. You | ||
are about to enter into a transaction to build a new home or remodel | ||
existing residential property. Texas law requires your contractor | ||
to provide you with this brief overview of some of your rights, | ||
responsibilities, and risks in this transaction. | ||
"CONVEYANCE TO CONTRACTOR NOT REQUIRED. Your contractor may | ||
not require you to convey your real property to your contractor as a | ||
condition to the agreement for the construction of improvements on | ||
your property. | ||
"KNOW YOUR CONTRACTOR. Before you enter into your agreement | ||
for the construction of improvements to your real property, make | ||
sure that you have investigated your contractor. Obtain and verify | ||
references from other people who have used the contractor for the | ||
type and size of construction project on your property. | ||
"GET IT IN WRITING. Make sure that you have a written | ||
agreement with your contractor that includes: (1) a description of | ||
the work the contractor is to perform; (2) the required or estimated | ||
time for completion of the work; (3) the cost of the work or how the | ||
cost will be determined; and (4) the procedure and method of | ||
payment, including [ |
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conditions for final payment. If your contractor made a promise, | ||
warranty, or representation to you concerning the work the | ||
contractor is to perform, make sure that promise, warranty, or | ||
representation is specified in the written agreement. An oral | ||
promise that is not included in the written agreement may not be | ||
enforceable under Texas law. | ||
"READ BEFORE YOU SIGN. Do not sign any document before you | ||
have read and understood it. NEVER SIGN A DOCUMENT THAT INCLUDES AN | ||
UNTRUE STATEMENT. Take your time in reviewing documents. If you | ||
borrow money from a lender to pay for the improvements, you are | ||
entitled to have the loan closing documents furnished to you for | ||
review at least one business day before the closing. Do not waive | ||
this requirement unless a bona fide emergency or another good cause | ||
exists, and make sure you understand the documents before you sign | ||
them. If you fail to comply with the terms of the documents, you | ||
could lose your property. You are entitled to have your own | ||
attorney review any documents. If you have any question about the | ||
meaning of a document, consult an attorney. | ||
"GET A LIST OF SUBCONTRACTORS AND SUPPLIERS. Before | ||
construction commences, your contractor is required to provide you | ||
with a list of the subcontractors and suppliers the contractor | ||
intends to use on your project. Your contractor is required to | ||
supply updated information on any subcontractors and suppliers | ||
added after the list is provided. Your contractor is not required | ||
to supply this information if you sign a written waiver of your | ||
rights to receive this information. | ||
"MONITOR THE WORK. Lenders and governmental authorities may | ||
inspect the work in progress from time to time for their own | ||
purposes. These inspections are not intended as quality control | ||
inspections. Quality control is a matter for you and your | ||
contractor. To ensure that your home is being constructed in | ||
accordance with your wishes and specifications, you should inspect | ||
the work yourself or have your own independent inspector review the | ||
work in progress. | ||
"MONITOR PAYMENTS. If you use a lender, your lender is | ||
required to provide you with a periodic statement showing the money | ||
disbursed by the lender from the proceeds of your loan. Each time | ||
your contractor requests payment from you or your lender for work | ||
performed, your contractor is also required to furnish you with a | ||
disbursement statement that lists the name and address of each | ||
subcontractor or supplier that the contractor intends to pay from | ||
the requested funds. Review these statements and make sure that the | ||
money is being properly disbursed. | ||
"CLAIMS BY SUBCONTRACTORS AND SUPPLIERS. Under Texas law, if | ||
a subcontractor or supplier who furnishes labor or materials for | ||
the construction of improvements on your property is not paid, you | ||
may become liable and your property may be subject to a lien for the | ||
unpaid amount, even if you have not contracted directly with the | ||
subcontractor or supplier. [ |
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"If a subcontractor or supplier who furnishes labor or | ||
materials for the construction of improvements on your property is | ||
not paid, the subcontractor or supplier [ |
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lien claim [ |
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where the property is located. A mechanic's lien claim [ |
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is not a lien on your property, but the filing of the claim | ||
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if the claimant is successful in litigation to enforce the lien | ||
claim. | ||
"SOME CLAIMS MAY NOT BE VALID. When [ |
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filed on your property, you should know your legal rights and | ||
responsibilities regarding the claim. Not all claims are valid. A | ||
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send a notice and file [ |
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The notice and the lien claim [ |
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information. All claimants may not fully comply with the legal | ||
requirements to collect on a claim. [ |
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attorney when you receive a written notice of a claim to determine | ||
the true extent of your liability or potential liability for that | ||
claim. | ||
"OBTAIN A LIEN RELEASE AND A BILLS-PAID AFFIDAVIT. [ |
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by a subcontractor or supplier by requiring as a condition of each | ||
payment made by you or your lender that your contractor furnish you | ||
with an affidavit stating that all bills have been paid. Under | ||
Texas law, on final completion of the work and before final payment, | ||
the contractor is required to furnish you with an affidavit stating | ||
that all bills have been paid. If the contractor discloses any | ||
unpaid bill in the affidavit, you should withhold payment in the | ||
amount of the unpaid bill until you receive a waiver of lien or | ||
release from that subcontractor or supplier. | ||
"OBTAIN TITLE INSURANCE PROTECTION. You may be able to | ||
obtain a title insurance policy to insure that the title to your | ||
property and the existing improvements on your property are free | ||
from liens claimed by subcontractors and suppliers. If your policy | ||
is issued before the improvements are completed and covers the | ||
value of the improvements to be completed, you should obtain, on the | ||
completion of the improvements and as a condition of your final | ||
payment, a 'completion of improvements' policy endorsement. This | ||
endorsement will protect your property from liens claimed by | ||
subcontractors and suppliers that may arise from the date the | ||
original title policy is issued to the date of the endorsement." | ||
SECTION 23. Subsection (d), Section 56.054, Business & | ||
Commerce Code, is amended to read as follows: | ||
(d) A contingent payor is considered to have exercised | ||
diligence for purposes of Subsection (b)(1) under a contract for a | ||
private project governed by Chapter 53, Property Code, if the | ||
contingent payee receives in writing from the contingent payor: | ||
(1) the name, address, and business telephone number | ||
of the primary obligor; | ||
(2) a description, legally sufficient for | ||
identification, of the property on which the improvements are being | ||
constructed; | ||
(3) [ |
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of improvements: | ||
(A) a statement, furnished by the primary obligor | ||
and supported by reasonable and credible evidence from all | ||
applicable lenders, of the amount of the loan; | ||
(B) a summary of the terms of the loan; | ||
(C) a statement of whether there is foreseeable | ||
default of the primary obligor; and | ||
(D) the name, address, and business telephone | ||
number of the borrowers and lenders; and | ||
(4) [ |
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obligor and supported by reasonable and credible evidence from all | ||
applicable banks or other depository institutions, of the amount, | ||
source, and location of funds available to pay the balance of the | ||
contract amount if there is no loan or the loan is not sufficient to | ||
pay for all of the construction of the improvements. | ||
SECTION 24. Subdivision (3), Section 3503.051, Insurance | ||
Code, is amended to read as follows: | ||
(3) "Notice of claim" means a written notification by | ||
a claimant who makes a claim for payment from the surety company. | ||
The term does not include a routine statutory notice required by | ||
Section 53.056 [ |
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Property Code, or Section 2253.047, Government Code. | ||
SECTION 25. The following provisions of the Property Code | ||
are repealed: | ||
(1) Subdivisions (1), (2), (11), and (12), Section | ||
53.001; | ||
(2) Sections 53.002 and 53.003; | ||
(3) Subsection (b), Section 53.021; | ||
(4) Sections 53.023, 53.024, and 53.025; | ||
(5) Sections 53.051, 53.053, 53.055, 53.057, 53.058, | ||
53.081, 53.082, 53.083, and 53.084; | ||
(6) Subsections (b), (c), and (d), Section 53.085; | ||
(7) Sections 53.101, 53.102, 53.103, 53.104, 53.105, | ||
and 53.106; | ||
(8) Subsection (d), Section 53.107, Subsection (c), | ||
Section 53.122, and Subsections (c) and (d), Section 53.124; | ||
(9) Sections 53.153, 53.155, 53.159, 53.160, 53.161, | ||
and 53.162; | ||
(10) Subchapter I, Chapter 53; | ||
(11) Sections 53.252 and 53.253; and | ||
(12) Subsection (g), Section 53.254. | ||
SECTION 26. The changes in law made by this Act apply only | ||
to an original contract entered into on or after the effective date | ||
of this Act. An original contract entered into before the effective | ||
date of this Act is governed by the law as it existed immediately | ||
before the effective date of this Act, and that law is continued in | ||
effect for that purpose. | ||
SECTION 27. This Act takes effect January 1, 2014. |