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We recently visited the new and updated lien laws for the State of Texas in a recent newsletter.
Within those laws is a very specific subsection of residences that have additional restrictions for
liens that can be difficult to overcome for contractors: homesteads. What do you, a contractor,
need to do to secure a lien on the house if the house is declared a homestead?
The first thing is to determine if there is a homestead exemption covering the property. In
order to do so, you must review the property records and title for the residence in question. If the
residence is a homestead, then there are two types of mechanics liens that can be filed in Texas:
constitutional liens and statutory liens. The most commonly used are statutory liens but
constitutional liens can come in handy with a little pre-planning.
In order to be able to file a constitutional lien against a homestead a contractor must do
the following for a new improvement project or a project where work and materials have been
used to repair or renovate existing improvements:
1. a contractor needs a written contract with the owner stating the relevant terms and in a
manner similar to making a sale and conveyance of the homestead. Verbal contracts are
not valid for homestead liens;
2. the contract must be executed before any labor or materials are furnished;
3. the contract must be signed by both spouses if the owner is married;
4. the contract is not executed by the owner and spouse prior to the fifth day after the owner
makes a written application for any extension of credit for the work and materials unless
the work and materials are immediately necessary due to health and safety concerns;
5. the contract expressly states that the owner may rescind the contract within three days of
execution by all parties unless the work and materials are immediately necessary due to
health and safety concerns;
6. the contract for the work and materials is executed in one of the following locations:
a. office of a third-party lender;
b. an attorney’s office;
c. or a title companies office.
NOTICE: contracts signed by door-to-door salesmen in residences, e-signed, or
similarly executed contacts will not comply with this rule.
The constitutional lien requires a fair amount of up front work but it does alleviate the
need to meet certain deadlines and due dates as is necessary with the statutory lien.
The statutory lien is not so complicated at the beginning of the project but does require,
as mentioned, certain timing calculations. Please see the following link for our newsletter on
filing statutory liens generally: https://www.martinezhsu.com/post/martinezhsu-newsletter.
With regards to statutory liens on homesteads, the following regulations apply:
1. the contractor needs a written contract with the owner stating the relevant terms. Verbal
agreements are not valid for homestead liens;
2. the contract must be executed before any labor or materials are furnished;
3. the contract must be signed by both spouses if the owner is married;
4. the original contactor must take the above actions for subcontractors to be able to file a
lien against the homestead;
5. the contract must be filed with the county in which the homestead is located;
6. any affidavit for liens must contain the following language in 10-point boldface, or
equivalent, font: NOTICE: THIS IS NOT A LIEN. THIS IS ONLY AN AFFIDAVIT
CLAIMING A LIEN;
7. Texas Property Code 53.254(g) lays out an additional statement(s) that must be given to
the owner. (Excluded here due to size limitations);
In summation, homestead protection in Texas is very difficult to overcome and the process for
either form of liens must be followed precisely. Not only can you have your lien removed if
improperly filed but you may have to pay additional damages and attorney’s fees depending on
your contract and disclosures.
Please contact the Offices of Martinez Hsu, P.C. in order for us to help you analyze your
lien process and make sure you protect your rights and get paid.
