78R5804 QS-D

By:  Harris                                                       S.B. No. 551



A BILL TO BE ENTITLED

AN ACT

relating to the priority of a construction lender's lien over a 
mechanic's lien.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 53.124, Property Code, is amended by 
amending Subsections (a), (c), and (d) and adding Subsection (f) to 
read as follows:
	(a)  Except as provided by Subsections (d) and [Subsection] 
(e), for purposes of Section 53.123, the time of inception of a 
mechanic's lien is the commencement of construction of improvements 
or delivery of materials to the land on which the improvements are 
to be located and on which the materials are to be used.
	(c)  An owner and original contractor may jointly file an 
affidavit of commencement with the county clerk of the county in 
which the land is located not later than the 30th day after the date 
of actual commencement of construction of the improvements or 
delivery of materials to the land.  The affidavit must contain:
		(1)  the name and address of the owner;                                       
		(2)  the name and address of each original contractor, 
known at the time to the owner, that is furnishing labor, service, 
or materials for the construction of the improvements;
		(3)  a description, legally sufficient for 
identification, of the property being improved;
		(4)  an agreed commencement date [the date the work 
actually commenced];  and
		(5)  a general description of the improvement.                                
	(d)  [An affidavit filed in compliance with this section is 
prima facie evidence of the date of the commencement of the 
improvement described in the affidavit.]  The time of inception of a 
mechanic's lien arising from work described in an affidavit of 
commencement filed under this section is the agreed commencement
date [of commencement] of the work stated in the affidavit.
	(f)  If the owner obtains third-party financing for the 
construction of improvements under a residential construction 
contract, the owner and the original contractor must file an 
affidavit of commencement under Subsection (c).
	SECTION 2.  The change in law made by this Act applies only 
to the priority of liens for a construction project in which the 
commencement of construction of improvements or the delivery of 
materials to the land on which the improvements are to be located 
begins on or after the effective date of this Act.  If the 
commencement of construction of improvements or the delivery of 
materials to the land on which the improvements are to be located 
begins before the effective date of this Act, the priority of liens 
for that construction project is governed by the law in effect 
immediately before that date, and that law is continued in effect 
for that purpose.
	SECTION 3.  This Act takes effect September 1, 2003.