Texas construction law runs mostly on three chapters of the Property Code: Chapter 53 for mechanic’s liens, Chapter 28 for prompt payment, and Chapter 27 for residential defect disputes, plus a constitutional lien provision and a 10-year outer deadline on defect suits in the Civil Practice and Remedies Code. The deadlines are short, strict, and unforgiving. Miss a preliminary notice window by a day and your lien is void. Miss the one-year foreclosure deadline and the lien on record is worthless. This guide walks through what each statute actually requires, in the order the deadlines come at you.
Why the Statutes Carry So Much Weight
Texas does not require a statewide license for general contractors or builders. You can operate as a general contractor without passing a state exam or registering with a central licensing board. Specialty trades are the exception: plumbers, electricians, HVAC technicians, fire sprinkler installers, well drillers, mold remediation contractors, and elevator installers all need state licenses, and some cities and counties add their own permitting rules on top.
Without a licensing board to discipline bad actors, the lien system and the Residential Construction Liability Act do most of the accountability work on a Texas project. That is why the notice rules below matter so much: they are the primary leverage anyone in the payment chain has.
Who Gets a Lien
Texas gives two kinds of mechanic’s liens, and which one you have depends entirely on who hired you.
Article XVI, Section 37 of the Texas Constitution grants mechanics, artisans, and material suppliers a lien on buildings and articles they construct or repair for the value of their labor or materials.1Justia. Texas Constitution Article 16 Section 37 – Liens of Mechanics, Artisans, and Material Men This constitutional lien is self-executing. It exists automatically, without any filing or notice. The catch: it only protects parties with a direct contract with the property owner. If a general hired you, you have no constitutional lien.
Chapter 53 of the Property Code fills that gap with a statutory lien available to subcontractors, suppliers, and anyone else down the payment chain. The tradeoff is paperwork. Statutory liens come with strict notice and filing requirements, and missing any of them voids the lien. For subcontractors, this is the only realistic option.
Preliminary Notice: The Deadline Most People Miss
If you are anyone other than the original contractor, you must send written notice to both the property owner and the original contractor before your lien rights are secure. Timing depends on project type.
On non-residential projects, the notice must be sent no later than the 15th day of the third month after the month you provided the labor or materials. On residential projects, the deadline tightens to the 15th day of the second month after the month you did the work.2State of Texas. Texas Property Code PROP 53.056 – Derivative Claimant The notice must identify the project, the claimant, the type of work or materials, the amount claimed, the original contractor, and the party who hired you if different.
A separate notice applies to unpaid retainage. If the money you are owed is being held back by the original contractor, you must send a retainage notice to the owner and original contractor no later than the 30th day after your contract is completed, terminated, or abandoned, or the 30th day after the original contract ends, whichever comes first.3State of Texas. Texas Property Code PROP 53.057 – Derivative Claimant
Most sub-tier lien claims die here. Work gets done, months pass, payment does not come, and by the time anyone thinks about filing a lien the preliminary notice window has closed. Calendar the notice deadlines from the first month you supply labor or materials, not from the month you stop getting paid.
Filing the Lien Affidavit
After satisfying any preliminary notice obligations, the next step is filing a lien affidavit with the county clerk where the property sits. The affidavit creates a formal encumbrance on title and can ultimately be used to force a sale.
Original contractors on non-residential projects must file the affidavit no later than the 15th day of the fourth month after the month work was completed, terminated, or abandoned. On residential projects, that window shortens to the 15th day of the third month.4State of Texas. Texas Property Code PROP 53.052 – Filing of Affidavit There is no grace period and no good-cause extension.
The affidavit must contain a sworn statement of the amount claimed, the name and last known address of the property owner, a general description of the work or materials, the name and address of the person who hired you, and a legal description of the property sufficient for identification. Anyone other than the original contractor must also state the date each preliminary notice was sent and the method used.5State of Texas. Texas Property Code 53.054 – Contents of Affidavit Pull the legal description from the deed records; a street address alone is not enough, and a wrong owner name or garbled description can invalidate the whole lien. The document must be notarized before filing.
After Filing: Notice to the Owner and the One-Year Clock
Filing with the county clerk is not the end. You must send a copy of the filed affidavit to the property owner at the last known address no later than the fifth day after filing. If you are not the original contractor, send a copy to the original contractor within the same five-day window.6State of Texas. Texas Property Code 53.055 – Notice of Filed Affidavit The statute does not require a specific delivery method, but certified mail gives you proof if the owner later claims no notice.
Once the lien is recorded, you have one year from the last day you could have filed the affidavit to sue to foreclose. That one-year deadline can be extended to two years if you and the current property owner sign a written agreement to extend and record it with the county clerk.7State of Texas. Texas Property Code 53.158 – Period for Bringing Suit to Foreclose Lien A lien on record feels like protection even after the clock has run, and that is how claimants lose money they thought was secured.
Retainage and Fund Trapping
Texas law requires the property owner to reserve 10 percent of the contract price during construction. This statutory retainage protects subcontractors and suppliers if the original contractor fails to pay. It cannot be released until the statutory lien deadlines have passed.
Beyond retainage, the Property Code gives owners authority to withhold additional funds from payments to the original contractor once they receive a preliminary notice from a subcontractor or supplier. This fund-trapping mechanism kicks in immediately on receipt. The owner holds back enough to cover the claimed amount, redirecting money that would otherwise flow to the general.8State of Texas. Texas Property Code PROP 53.081 – Authority to Withhold Funds for Benefit of Claimants This is the practical payoff of a timely preliminary notice: the owner is now legally obligated to set aside money for your claim.
Prompt Pay Act Deadlines
Chapter 28 of the Property Code controls how fast money has to move. Once a contractor submits a written payment request, the owner has 35 days to pay for properly performed work. After receiving that payment, the contractor must pay each subcontractor within seven days.9State of Texas. Texas Property Code Chapter 28 – Prompt Payment to Contractors and Subcontractors
When payment is late without a legitimate dispute, the unpaid balance accrues interest at 1.5 percent per month, or 18 percent annually. Interest begins the day after payment becomes due and stops on the date payment is delivered or judgment is entered.10State of Texas. Texas Property Code 28.004 – Interest on Overdue Payment Funds can be withheld for legitimately disputed work, but using a dispute as a pretext triggers the interest penalty. The rules apply to private projects and many public ones.
Residential Projects: Disclosures Before the Contract
Before a homeowner signs a residential construction contract, the original contractor must deliver a written disclosure statement under Property Code Section 53.255. The disclosure warns that the property can be subject to liens if subcontractors and suppliers go unpaid, and it explains that the contractor cannot require the homeowner to convey the property as a condition of the agreement.11State of Texas. Texas Property Code 53.255 – Disclosure Statement
The contractor must also provide a list of the subcontractors and suppliers who will work on the project before construction begins, and update that list as new parties are added. For a homestead, both spouses must sign if the owners are married. A contractor who skips these disclosures weakens any later attempt to enforce a lien.
Construction Defect Claims: The RCLA Process
Chapter 27 of the Property Code, the Residential Construction Liability Act, controls how construction defect disputes play out for homes. It forces a structured negotiation before anyone can file suit, and it limits what homeowners can recover.
A homeowner must send the contractor a written notice describing the defects in reasonable detail at least 60 days before filing suit or starting arbitration. The contractor then has 35 days to request an inspection and 45 days from receipt of the notice to make a written settlement offer.12Justia. Texas Property Code Chapter 27 – Residential Construction Liability Skipping the 60-day notice is one of the fastest ways to derail a defect claim.
Recoverable damages are limited to specific economic categories: reasonable cost of repairs, replacement or repair of damaged goods in the home, engineering and consulting fees, temporary housing during repairs, reduction in market value when the defect involves structural failure, reasonable attorney’s fees, and arbitration costs.13State of Texas. Texas Property Code PROP 27.004 – Notice and Offer of Settlement Pain and suffering and emotional distress are not on that list.
There is a real penalty for rejecting a reasonable settlement offer. If a homeowner turns down a reasonable offer and goes to trial, recovery is capped at the fair market value of the contractor’s last offer, and attorney’s fees are limited to those incurred before the rejection.13State of Texas. Texas Property Code PROP 27.004 – Notice and Offer of Settlement Homeowners who push past a reasonable offer on principle often recover less than what was on the table.
The 10-Year Outer Deadline
Separate from RCLA, Texas imposes a hard outer deadline on all construction defect claims. Under Section 16.009 of the Civil Practice and Remedies Code, suit must be filed no later than 10 years after substantial completion of the improvement, regardless of when the defect was discovered.14State of Texas. Texas Civil Practice and Remedies Code 16.009 – Persons Furnishing Construction or Repair of Improvements This is a statute of repose, not a statute of limitations. The discovery rule does not extend it. A hidden foundation crack that surfaces in year nine must still make the 10-year window.
The timeline shortens in two situations. Government entities suing over defective construction must file within eight years. For residential projects where the contractor provided a written warranty covering one year for workmanship, two years for mechanical systems, and six years for structural elements, the deadline drops to six years. Submitting a written claim during the repose period adds a two-year extension from the date of submission for general claims, or one year for government and residential claims. If damage occurs during the final year of the repose period, you have two years from the date the cause of action accrues to file.14State of Texas. Texas Civil Practice and Remedies Code 16.009 – Persons Furnishing Construction or Repair of Improvements