Texas Preliminary Notice, Private Works
Preliminary Notice-Private Works
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Note: This information is limited in scope and applies only to this document. Please see the general information, all forms memo, and the general information memo for this type of document, for additional information.
Document Title: Notice of the Right to Claim a Lien.
Scope: State of Texas, Private Works
Time Constraints: A Texas Notice of the Right to Claim a lien must be served in accordance with the type of job you are performing and the type of owner you dealing with.
Residential or Commercial Job?: Where noted, jobs are defined as Residential or Commercial. A residence is defined, by statute, as a one to four unit house or residential structure which is used for residential purposes and is owned by one or more adult persons and is actually used or intended to be used as a dwelling by one or more of those owners. All other structures are commercial for the purposes of the Mechanic's Lien statutes. Note that time frames for filing are different for Residential or Commercial projects.
An original contractor is defined as the Prime or General Contractor.
Texas has three types of preliminary notices, and each must be used before a Affidavit of Lien Claim can be made on a job unless a Notice of Completion has been filed, when an Affidavit of Lien may be filed immediately. A new, separate notice is done for each month of service, and three notices for each month may be sent in an attempt to get paid. In the event of non-payment. The Lien Affidavit is filed by the 15th of the 4th month (3rd month residential).
1) Balance Due Notice: A notice of the unpaid balance due the claimant must be delivered as follows:
Residential Projects: The first notice to the Contractor and Owner must be sent no later than the 15th day of the first month following the month in which the claimant's labor or material was furnished and a second notice to the Contractor and Owner by the 15th of the following month. Unless paid a Residential Lien Affidavit is filed by the 15th of the third month.
Commercial Projects: The first notice to the Contractor must be sent no later than the 15th day of the second month following the month in which the claimant's labor or material was furnished and second notice to the Contractor and Owner by the 15th of the month of the following month. Unless paid a Lien Affidavit is filed by the 15th of the fourth month.
Remember: If a residential job, said notice is required for both the owner and original contractor on for the first and subsequent notices. If a commercial job, notice to the original contractor is required for the first notice (send an optional notice to the owner if you want to have the verification of parties form filled out and returned), to the original contractor and owner on the 2nd notice. If a surety or bonding company exists, send them notice also.
2) Special Fabrication Notice: If the claim is based on items specially fabricated, notice to the owner and prime contractor must be given:
Residential Projects: Not later than the 15th day of the first month, following the month of the receipt and acceptance of the material order, stating that the order was received and accepted together with the price.
Commercial Projects: Not later than the 15th day of the second month, following the month of the receipt and acceptance of the material order, stating that the order was received and accepted together with the price.
Subsequent Notices will be Balance Due Notices.
In cases where indebtedness was incurred by one other than the original contractor, the claimant must also give notice to the original contractor.
When printing the form you will be asked what is the notice number of the preliminary notice (1 or 2). All Texas notices must include a copy of the invoices, or statement, for the month of service for each separate notice. In mass printing the program knows which forms should be printed, and when.
3) Retainage Notice: This is a separate notice sent at the completion or termination of a contract for retainage money held. If an agreement for retainage exists, you must give a retainage notice to the owner and original contractor within 30 days of the completion or termination of your contact with the owner or other contractor. The deadline to file al lien for the retainage is between 40 days (if the notice of completion is filed by the owner) and 4 months (if no notice of completion is filed by the owner). Make sure you leave time enough to file your lien claim! To complicate this right to claim, if the owner has sent a notice to the potential claimant to file his claims, you must send the retainage notice and file your lien claim within 30 days of the owner’s notice to you.
After the sending the retainage notice to the owner you are free to file your lien affidavit for the retainage amount.
Notices must be sent by certified mail or personal service, state the sum to be retained and include a copy of the retainage agreement (or a summary of the general nature of the agreement including the due dates). A lien for retainage may not be greater that the amount specified to be retained in contract between the claimant and contractor.
DO NOT MISTAKE A BALANCE DUE NOTICE FOR A RETAINAGE NOTICE. THEY ARE NOW TWO DIFFERENT THINGS.
In addition, an owner withholding retainage from the original contractor must pay a claim, which is not disputed by the original contractor, within 30 days after receiving a copy of the demand sent to the owner.
Information Requirements: The information required by program, the number of the preliminary notice you are sending and whether you intend to send an owner cover letter.
Form Types: Notice of the Right to Claim a Lien, Exhibits A-D (if needed) and Owner Letter (if used). When the 1st notice prints, the program will also print a verification letter to the owner or contractor.
Procedures: Enter the program data, including Additional Legal Parties or Releases for Other Companies. Copies of all of the forms (less the Owner Cover Letter) must be delivered within the time constraints listed above.
When in doubt, file your lien claim immediately.
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