The Retainer

February 22, 2022


Most contractors have dealt with RETAINAGE or RETENTION. In Texas, there are two types of retainage. The first is statutory, under TexasProperty Code 53.101, in which owners are required to withhold 10% of the value of the work during the project and for 30 days following completion. Statutory retainage should be written into the prime contract. The second type is contractual retainage, and just like it sounds, the provision is built into a contract, usually between a general contractor and a subcontractor

Securing your withheld retainage can be a tricky path.  The following guideline is for contractors, other than general contractors, who have a retainage clause built into their contract or a reasonable retainage amount (based on materials and labor) that was withheld where there is no contract. Different deadlines apply to unpaid materials and/or labor.

First, you must send a notice to the owner of the property and to the general contractor. This notice should be sent when the contractual retainage contract is entered into.  If not sent immediately, the deadline for the notice are the earlier of: 30 days after contract is completed, terminated, or abandoned; or 30 days after the contract between the owner and general contractor is completed, terminated, or abandoned.  This notice must comply with a set form and include an invoice or billing statement. Texas property code provides for the form in Section 53.057 (a-2) and we have included an example of the form below:

Following the notice, the claimant must file an affidavit for a lien per the normal filing schedule we discussed last month regarding liens.   Click here for that article.

These deadlines are strictly enforced and failure to comply will result in you losing a valuable remedy.  

Should you run into a similar situation, please do not hesitate to contact our office. The sooner you act the better with regards to liens.

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