How can I prevent suppliers from placing liens on my house if the general contractor doesn't pay them?

Full question:

I am having a room built onto my house. How can do so such that sub-contractors and materials suppliers cannot place liens on my house if the general contractor does not pay them?

• Category: Judgment Liens
• Date: 04/07/2025
• State: Texas

Answer:

An original contractor must furnish a list of suppliers and subcontractors to the owner on a residential construction project, unless this list is waived by the owner. Before receiving final payment, the original contractor must provide the owner with an affidavit stating that the original contractor has paid each person in full for all labor and materials used in the construction of improvements on the real property. If the original contractor has not paid each person in full, the original contractor shall state in the affidavit the amount owed and the name and, if known, the address and telephone number of each person to whom a payment is owed.

In order for a subcontractor or materialman to place a lien on the owner's home, the owner must be given notice and the lien must be filed within 30 days of the completion or abandonment of work, or termination of the contract. The owner may file a notice of completion with the county recorder's office to start this time period.

During construction and for 30 days after completion of construction, the owner must retain 10 percent of the contract price or 10 percent of the value of the work performed by the original contractor. If the owner receives notice of an unpaid claim from a subcontractor or materialman, the owner must withhold payment to the original contractor that is sufficient to cover the unpaid claim until the dispute is resolved.

If If you have complied with the law regarding the 10 percent retainage and you have withheld payment to the original contractor sufficient to cover any written notice of claim and have paid that amount, if any, to the claimant, any lien claim filed on your property by a subcontractor or
supplier, other than a person who contracted directly with you, will not be a valid lien on your property. In addition, except for the required 10 percent retainage, you are not liable to a subcontractor or supplier for any amount paid to your contractor before you received written notice of the claim.

The following are TX statutes:

§ 53.081 PROP. Authority to Withhold Funds for Benefit of Claimants

(a) If an owner receives notice under Section 53.056, 53.057, 53.058,
53.252, or 53.253, the owner may withhold from payments to the original
contractor an amount necessary to pay the claim for which he receives
notice.

(b) If notice is sent in a form that substantially complies with
Section 53.056 or 53.252, the owner may withhold the funds immediately on
receipt of the notice.

(c) If notice is sent under Section 53.057, the owner may withhold
funds immediately on receipt of a copy of the claimant's affidavit
prepared in accordance with Sections 53.052 through 53.055.

(d) If notice is sent under Section 53.058, the owner may withhold
funds immediately on receipt of the notices sent under Subsection (e) of
that section. If notice is sent as provided by Section 53.253(b), the
owner may withhold funds immediately on receipt of the notice sent as
required by Section 53.252.

§ 53.084 PROP. Owner's Liability

(a) Except for the amount required to be retained under Subchapter E,
the owner is not liable for any amount paid to the original contractor
before the owner is authorized to withhold funds under this subchapter.

(b) If the owner has received the notices required by Subchapter C or
K, if the lien has been secured, and if the claim has been reduced to
final judgment, the owner is liable and the owner's property is subject
to a claim for any money paid to the original contractor after the owner
was authorized to withhold funds under this subchapter. The owner is
liable for that amount in addition to any amount for which he is liable
under Subchapter E.

§ 53.259 PROP. Final Bills-Paid Affidavit Required

(a) As a condition of final payment under a residential construction
contract, the original contractor shall, at the time the final payment is
tendered, execute and deliver to the owner, or the owner's agent, an
affidavit stating that the original contractor has paid each person in
full for all labor and materials used in the construction of improvements
on the real property. If the original contractor has not paid each person
in full, the original contractor shall state in the affidavit the amount
owed and the name and, if known, the address and telephone number of each
person to whom a payment is owed.

(b) The seller of any real property on which a structure of not more
than four units is constructed and that is intended as the principal
place of residence for the purchaser shall, at the closing of the purchase
of the real property, execute and deliver to the purchaser, or the
purchaser's agent, an affidavit stating that the seller has paid each
person in full for all labor and materials used in the construction of
improvements on the real property and that the seller is not indebted to
any person by reason of any construction. In the event that the seller
has not paid each person in full, the seller shall state in the affidavit
the amount owed and the name and, if known, the address and telephone
number of each person to whom a payment is owed.

(c) A person commits an offense if the person intentionally,
knowingly, or recklessly makes a false or misleading statement in an
affidavit under this section. An offense under this section is a
misdemeanor. A person adjudged guilty of an offense under this
section shall be punished by a fine not to exceed $4,000 or confinement in jail
for a term not to exceed one year or both a fine and confinement. A
person may not receive community supervision for the offense.

(d) A person signing an affidavit under this section is personally
liable for any loss or damage resulting from any false or incorrect
information in the affidavit.

§ 53.101 PROP. Required Retainage

(a) During the progress of work under an original contract for which a
mechanic's lien may be claimed and for 30 days after the work is
completed, the owner shall retain:

(1) 10 percent of the contract price of the work to the owner; or

(2) 10 percent of the value of the work, measured by the proportion
that the work done bears to the work to be done, using the contract price
or, if there is no contract price, using the reasonable value of the
completed work.

(b) In this section, "owner" includes the owner's agent, trustee, or
receiver.

§ 53.102 PROP. Payment Secured by Retainage

The retained funds secure the payment of artisans and mechanics who
perform labor or service and the payment of other persons who furnish
material, material and labor, or specially fabricated material for any
contractor, subcontractor, agent, or receiver in the performance of the
work.

§ 53.103 PROP. Lien on Retained Funds

A claimant has a lien on the retained funds if the claimant:

(1) sends the notices required by this chapter in the time and manner
required; and

(2) files an affidavit claiming a lien not later than the 30th day
after the earlier of the date:

(A) the work is completed;

(B) the original contract is terminated; or

(C) the original contractor abandons performance under the original
contract.

§ 53.106 PROP. Affidavit of Completion

(a) An owner may file with the county clerk of the county in which the
property is located an affidavit of completion. The affidavit 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 description of the improvements furnished under the original
contract;

(5) a statement that the improvements under the original contract have
been completed and the date of completion; and

(6) a conspicuous statement that a claimant may not have a lien on
retained funds unless the claimant files the affidavit claiming a lien
not later than the 30th day after the date of completion.

(b) A copy of the affidavit must be sent by certified or registered
mail to the original contractor not later than the date the affidavit is
filed and to each claimant who sends a notice of lien liability to the
owner under Section 53.056, 53.057, 53.058, 53.252, or 53.253 not later
than the date the affidavit is filed or the 10th day after the date the
owner receives the notice of lien liability, whichever is later.

(c) A copy of the affidavit must also be sent to each person who
furnishes labor or materials for the property and who furnishes the owner
with a written request for the copy. The owner must furnish the copy to
the person not later than the date the affidavit is filed or the 10th day
after the date the request is received, whichever is later.

(d) Except as provided by this subsection, an affidavit filed under
this section on or before the 10th day after the date of completion of
the improvements is prima facie evidence of the date the work under the
original contract is completed for purposes of this subchapter. If the
affidavit is filed after the 10th day after the date of completion, the
date of completion for purposes of this subchapter is the date the
affidavit is filed. This subsection does not apply to a person to whom
the affidavit was not sent as required by this section.

§ 53.256 PROP. List of Subcontractors and Suppliers

(a) Except as provided by Subsection (d), for the construction of
improvements under a residential construction contract, the original
contractor shall:

(1) furnish to the owner before the commencement of construction a
written list that identifies by name, address, and telephone number each
subcontractor and supplier the contractor intends to use in the work to
be performed; and

(2) provide the owner with an updated list of subcontractors and
suppliers not later than the 15th day after the date a subcontractor or
supplier is added or deleted.

(b) The list must contain the following notice conspicuously printed,
stamped, or typed in a size equal to at least 10-point boldface or the
computer equivalent:

"NOTICE: THIS LIST OF SUBCONTRACTORS AND SUPPLIERS MAY NOT BE A FINAL
LISTING. UNLESS YOU SIGN A WAIVER OF YOUR RIGHT TO RECEIVE UPDATED
INFORMATION, THE CONTRACTOR IS REQUIRED BY LAW TO SUPPLY UPDATED
INFORMATION, AS THE INFORMATION BECOMES AVAILABLE, FOR EACH SUBCONTRACTOR
OR SUPPLIER USED IN THE WORK PERFORMED ON YOUR RESIDENCE."

(c) The failure of a contractor to comply with this section does not
invalidate a lien under this chapter, a contract lien, or a deed of
trust.

(d) An owner may waive the right to receive the list of subcontractors
and suppliers or any updated information required by this section only as
provided by this subsection. The waiver must be in writing and may be
included in the residential construction contract. If the waiver is not
included as a provision of the residential construction contract, the
separate waiver statement must be signed by the owner. The waiver must be
conspicuously printed in at least 10-point bold-faced type and read
substantially similar to the following:

"WAIVER OF THE LIST OF SUBCONTRACTORS AND SUPPLIERS. AN OWNER IS NOT
REQUIRED TO WAIVE THE RIGHT GRANTED BY SECTION 53.256, PROPERTY CODE, TO
RECEIVE FROM THE CONTRACTOR AN ORIGINAL OR UPDATED LIST OF SUBCONTRACTORS
AND SUPPLIERS.

"BY SIGNING THIS DOCUMENT, I AGREE TO WAIVE MY RIGHT TO RECEIVE FROM
THE CONTRACTOR AN ORIGINAL OR UPDATED LIST OF SUBCONTRACTORS AND
SUPPLIERS.

"I UNDERSTAND AND ACKNOWLEDGE THAT, AFTER SIGNING THIS DOCUMENT, THIS
WAIVER MAY NOT BE CANCELED AT A LATER DATE.

"I HAVE VOLUNTARILY CONSENTED TO THIS WAIVER."

§ 53.252 PROP. Derivative Claimant: Notice to Owner or Original
Contractor

(a) A claimant other than an original contractor must give the notice
prescribed by this section for the lien to be valid. If the property that
is the subject of the lien is a homestead, the notice must also comply
with Section 53.254.

(b) The claimant must give to the owner or reputed owner and the
original contractor written notice of the unpaid balance. The claimant
must give the notice not later than the 15th day of the second month
following each month in which all or part of the claimant's labor was
performed or material or specially fabricated material was delivered.

(c) To authorize the owner to withhold funds under Subchapter D, the
notice to the owner must state that if the claim remains unpaid, the
owner may be personally liable and the owner's property may be subjected
to a lien unless:

(1) the owner withholds payments from the contractor for payment of the
claim; or

(2) the claim is otherwise paid or settled.

(d) The notice must be sent by registered or certified mail and must be
addressed to the owner or reputed owner and the original contractor, as
applicable, at the person's last known business or residence address.

(e) A copy of the statement or billing in the usual and customary form
is sufficient as notice under this section.