By: Burrows, Deshotel, Romero, Jr. H.B. No. 2237
        (Senate Sponsor - Johnson)
         (In the Senate - Received from the House May 10, 2021;
  May 10, 2021, read first time and referred to Committee on Business &
  Commerce; May 21, 2021, reported adversely, with favorable
  Committee Substitute by the following vote:  Yeas 9, Nays 0;
  May 21, 2021, sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR H.B. No. 2237 By:  Hancock
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to mechanic's, contractor's, or materialman's liens.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 3503.051(3), Insurance Code, is amended
  to read as follows:
               (3)  "Notice of claim" means a written notification by
  a claimant who makes a claim for payment from the surety company.
  The term does not include a routine statutory notice required by
  Section 53.056 or [53.056(b),] 53.057, [53.058, 53.252(b), or
  53.253,] Property Code, or Section 2253.047, Government Code.
         SECTION 2.  Section 53.001, Property Code, is amended by
  amending Subdivisions (2), (3), (4), (8), (11), (13), and (14) and
  adding Subdivision (7-a) to read as follows:
               (2)  "Improvement" includes:
                     (A)  a house, building, structure, parking
  structure, physical appurtenance, pool, utility, railroad, well,
  storage facility, abutting sidewalks and streets, [and] utilities
  in or on those sidewalks and streets, land reclaimed from overflow,
  and other fixtures or modifications to real property;
                     (B)  clearing, grubbing, draining, or fencing of
  land;
                     (C)  machinery or apparatuses used for raising
  water or for supplying or storing water for stock, domestic use, or
  irrigation [wells, cisterns, tanks, reservoirs, or artificial
  lakes or pools made for supplying or storing water];
                     (D)  work described by Section 53.021(4) [pumps,
  siphons, and windmills or other machinery or apparatuses used for
  raising water for stock, domestic use, or irrigation]; and
                     (E)  a design, drawing, plan, plat, survey, or
  specification provided by a licensed architect, engineer, or
  surveyor [planting orchard trees, grubbing out orchards and
  replacing trees, and pruning of orchard trees].
               (3)  "Labor" means:
                     (A)  labor used in the direct performance
  [prosecution] of the work; or
                     (B)  a professional service used in the direct
  preparation for the work of a design, drawing, plan, plat, survey,
  or specification.
               (4)  "Material" means all or part of:
                     (A)  the material, machinery, fixtures, or tools:
                           (i)  incorporated into the work;
                           (ii)  used [, consumed] in the direct
  performance [prosecution] of the work;
                           (iii)  specially fabricated for an
  improvement; [,] or
                           (iv)  ordered and delivered for
  incorporation or use [consumption];
                     (B)  rent at a reasonable rate and actual running
  repairs at a reasonable cost for construction equipment used or
  reasonably required and delivered for use in the direct performance
  [prosecution] of the work at the site of the construction or repair;
  or
                     (C)  power, water, fuel, and lubricants consumed
  or ordered and delivered for consumption in the direct performance
  [prosecution] of the work.
               (7-a)  "Purported original contractor" means an
  original contractor who can effectively control the owner or is
  effectively controlled by the owner through common ownership of
  voting stock or ownership interests, interlocking directorships,
  common management, or otherwise, or who was engaged by the owner for
  the construction or repair of improvements without a good faith
  intention of the parties that the purported original contractor was
  to perform under the contract. For purposes of this subdivision,
  the term "owner" does not include a person who has or claims a
  security interest only.
               (8)  "Residence" means the real property and
  improvements for a single-family house, duplex, triplex, or
  quadruplex or a unit in a multiunit structure used for residential
  purposes in which title to the individual units is transferred to
  the owners under a condominium or cooperative system that is:
                     (A)  owned by one or more adult persons; and
                     (B)  used or intended to be used as a dwelling by
  one of the owners.
               (11)  "Retainage" means an amount representing part of
  a contract payment that is not required to be paid to the claimant
  within the month following the month in which labor is performed,
  material is furnished, or specially fabricated material is
  delivered. [The term does not include retainage under Subchapter
  E.]
               (13)  "Subcontractor" means a person who labors or has
  furnished labor or materials to fulfill an obligation to an
  original contractor or to a subcontractor of any tier to perform all
  or part of the work required by an original contract.
               (14)  "Work" means any part of construction or repair
  of an improvement performed under an original contract.
         SECTION 3.  Section 53.003, Property Code, is amended by
  amending Subsections (b) and (c) and adding Subsection (e) to read
  as follows:
         (b)  Except as provided by Subsection (c) or (d), any [Any]
  notice or other written communication required by this chapter must
  [may] be delivered:
               (1)  in person to the party entitled to the notice or to
  that party's agent;
               (2)  by certified mail; or
               (3)  by any other form of traceable, private delivery
  or mailing service that can confirm proof of receipt[, regardless
  of the manner prescribed by law].
         (c)  If notice is sent by [registered or] certified mail,
  deposit or mailing of the notice in the United States mail in the
  form required constitutes compliance with the notice requirement.
  This subsection does not apply if the law requires receipt of the
  notice by the person to whom it is directed.
         (e)  In computing the period of days in which to provide a
  notice or to take any action required under this chapter, if the
  last day of the period is a Saturday, Sunday, or legal holiday, the
  period is extended to include the next day that is not a Saturday,
  Sunday, or legal holiday.
         SECTION 4.  Section 53.021, Property Code, is amended to
  read as follows:
         Sec. 53.021.  PERSONS ENTITLED TO LIEN. [(a)] A person has
  a lien if[:
               [(1)]  the person, under a contract with the owner or
  the owner's agent, trustee, receiver, contractor, or
  subcontractor:
               (1)  labors[, specially fabricates material,] or
  furnishes labor or materials for construction or repair of an
  improvement; [in this state of:
                     [(A)  a house, building, or improvement;
                     [(B)  a levee or embankment to be erected for the
  reclamation of overflow land along a river or creek; or
                     [(C)  a railroad; and]
               (2)  [the person labors, specially fabricates the
  material, or furnishes the labor or materials under or by virtue of
  a contract with the owner or the owner's agent, trustee, receiver,
  contractor, or subcontractor.
         [(b)  A person who] specially fabricates material, [has a
  lien] even if the material is not delivered;
               (3)  is a licensed [.
         [(c)  An] architect, engineer, or surveyor providing
  services to prepare a design, drawing, [who prepares a] plan, [or]
  plat, survey, or specification;
               (4)  [under or by virtue of a written contract with the
  owner or the owner's agent, trustee, or receiver in connection with
  the actual or proposed design, construction, or repair of
  improvements on real property or the location of the boundaries of
  real property has a lien on the property.
         [(d)  A person who] provides labor, plant material, or other
  supplies for the installation of landscaping for an [a house,
  building, or] improvement, including the construction of a
  retention pond, retaining wall, berm, irrigation system, fountain,
  or other similar installation; or
               (5)  [, under or by virtue of a written contract with
  the owner or the owner's agent, contractor, subcontractor, trustee,
  or receiver has a lien on the property.
         [(e)  A person who] performs labor as part of, or [who]
  furnishes labor or materials for, the demolition of an improvement
  [a structure] on real property [under or by virtue of a written
  contract with the owner of the property or the owner's agent,
  trustee, receiver, contractor, or subcontractor has a lien on the
  property].
         SECTION 5.  Sections 53.022(a), (c), and (d), Property Code,
  are amended to read as follows:
         (a)  The lien extends to the [house, building, fixtures, or]
  improvements [, the land reclaimed from overflow, or the railroad
  and all of its properties,] and to each lot of land necessarily
  connected [or reclaimed].
         (c)  A lien against land in a city, town, or village extends
  to each lot on which the [house, building, or] improvement is
  situated or on which the labor was performed.
         (d)  A lien against land not in a city, town, or village
  extends to not more than 50 acres on which the [house, building, or]
  improvement is situated or on which the labor was performed.
         SECTION 6.  Section 53.023, Property Code, is amended to
  read as follows:
         Sec. 53.023.  PAYMENT SECURED BY LIEN. The lien secures
  payment for:
               (1)  the labor done or material furnished for the
  construction, [or] repair, design, survey, or demolition; or
               (2)  the specially fabricated material, even if the
  material has not been delivered or incorporated into the
  construction or repair, less its fair salvage value[; or
               [(3)  the preparation of a plan or plat by an architect,
  engineer, or surveyor in accordance with Section 53.021(c)].
         SECTION 7.  Section 53.026(a), Property Code, is amended to
  read as follows:
         (a)  A person who labors[, specially fabricates materials,]
  or furnishes labor or materials under a direct contractual
  relationship with a purported original contractor [another person]
  is considered to be [in direct contractual relationship with the
  owner and has a lien as] an original contractor for purposes of
  perfecting a mechanic's lien [, if:
               [(1)  the owner contracted with the other person for
  the construction or repair of a house, building, or improvements
  and the owner can effectively control that person through ownership
  of voting stock, interlocking directorships, or otherwise;
               [(2)  the owner contracted with the other person for
  the construction or repair of a house, building, or improvements
  and that other person can effectively control the owner through
  ownership of voting stock, interlocking directorships, or
  otherwise; or
               [(3)  the owner contracted with the other person for
  the construction or repair of a house, building, or improvements
  and the contract was made without good faith intention of the
  parties that the other person was to perform the contract].
         SECTION 8.  Section 53.052, Property Code, is amended to
  read as follows:
         Sec. 53.052.  FILING OF AFFIDAVIT. (a) An original
  contractor claiming the lien must file an affidavit with the county
  clerk:
               (1)  for projects other than residential construction
  projects, not later than the 15th day of the fourth month after the
  month in which the original contractor's work was completed,
  terminated, or abandoned; or
               (2)  for residential construction projects, not later
  than the 15th day of the third month after the month in which the
  original contractor's work was completed, terminated, or
  abandoned.
         (b)  Except as provided by Subsection (c) or (d) [(b)], a
  claimant other than an original contractor [the person] claiming
  the lien must file an affidavit with the county clerk [of the county
  in which the property is located or into which the railroad extends]
  not later than the 15th day of the fourth [calendar] month after the
  later of:
               (1)  the month the claimant last provided labor or
  materials; or
               (2)  the month the claimant would normally have been
  required to deliver the last of specially fabricated materials that
  have not been actually delivered [day on which the indebtedness
  accrues].
         (c) [(b)]  A claimant other than an original contractor
  [person] claiming a lien arising from a residential construction
  project must file an affidavit with the county clerk [of the county
  in which the property is located] not later than the 15th day of the
  third [calendar] month after the later of:
               (1)  the month the claimant last provided labor or
  materials; or
               (2)  the month the claimant would normally have been
  required to deliver the last of specially fabricated materials that
  have not been actually delivered.
         (d)  A claimant other than an original contractor claiming a
  lien for retainage must file an affidavit with the county clerk not
  later than the 15th day of the third month after the month in which
  the original contract under which the claimant performed was
  completed, terminated, or abandoned.
         (e)  An affidavit under this chapter must be filed in the
  county where the improvements are located [day on which the
  indebtedness accrues].
         [(c)] The county clerk shall record the affidavit in records
  kept for that purpose and shall index and cross-index the affidavit
  in the names of the claimant, the original contractor, and the
  owner. Failure of the county clerk to properly record or index a
  filed affidavit does not invalidate the lien.
         SECTION 9.  Section 53.055(a), Property Code, is amended to
  read as follows:
         (a)  A person who files an affidavit must send a copy of the
  affidavit [by registered or certified mail] to the owner or reputed
  owner at the owner's last known business or residence address not
  later than the fifth day after the date the affidavit is filed with
  the county clerk.
         SECTION 10.  The heading to Section 53.056, Property Code,
  is amended to read as follows:
         Sec. 53.056.  DERIVATIVE CLAIMANT: NOTICE TO OWNER AND [OR]
  ORIGINAL CONTRACTOR.
         SECTION 11.  Section 53.056, Property Code, is amended by
  amending Subsection (a) and adding Subsections (a-1), (a-2), (a-3),
  and (a-4) to read as follows:
         (a)  Except as provided by Section 53.057 [Subchapter K], a
  claimant other than an original contractor must give the notice
  prescribed by Subsections (a-1) and (a-2) [this section] for the
  lien to be valid.
         (a-1)  For all unpaid labor or materials provided, the
  claimant must send a notice of claim for unpaid labor or materials
  to the owner or reputed owner and the original contractor. The
  notice must be sent:
               (1)  for projects other than residential construction
  projects, not later than the 15th day of the third month after the
  month during which:
                     (A)  the labor or materials were provided; or
                     (B)  the undelivered specially fabricated
  materials would normally have been delivered; or
               (2)  for residential construction projects, not later
  than the 15th day of the second month after the month during which:
                     (A)  the labor or materials were provided; or
                     (B)  the undelivered specially fabricated
  materials would normally have been delivered.
         (a-2)  The notice must be in substantially the following
  form:
  "NOTICE OF CLAIM FOR UNPAID LABOR OR MATERIALS
  "WARNING: This notice is provided to preserve lien rights.
  "Owner's property may be subject to a lien if sufficient funds are
  not withheld from future payments to the original contractor to
  cover this debt.
         "Date:_______________
         "Project description and/or address: _______________
         "Claimant's name: _______________
         "Type of labor or materials provided: _______________
         "Original contractor's name: _______________
         "Party with whom claimant contracted if different from
  original contractor: _______________
         "Claim amount: _______________
         "_______________ (Claimant's contact person)
         "_______________ (Claimant's address)"
         (a-3)  The notice may include an invoice or billing
  statement.
         (a-4)  A claimant may give to the original contractor a
  written notice of an unpaid labor or materials invoice that is past
  due.  A notice under this subsection is not required for a lien to be
  valid.
         SECTION 12.  The heading to Section 53.057, Property Code,
  is amended to read as follows:
         Sec. 53.057.  DERIVATIVE CLAIMANT: NOTICE OF CLAIM FOR
  UNPAID [CONTRACTUAL] RETAINAGE [CLAIM].
         SECTION 13.  Section 53.057, Property Code, is amended by
  amending Subsections (a) and (f) and adding Subsections (a-1),
  (a-2), and (a-3) to read as follows:
         (a)  To the extent that a claim for unpaid retainage is not
  included wholly or partly in a notice provided under Section
  53.056, a claimant other than an original contractor whose contract
  provides for retainage must [A claimant may] give notice under this
  section for a lien for unpaid retainage to be valid [instead of or
  in addition to notice under Section 53.056 or 53.252 if the claimant
  is to labor, furnish labor or materials, or specially fabricate
  materials, or has labored, furnished labor or materials, or
  specially fabricated materials, under an agreement with an original
  contractor or a subcontractor providing for retainage].
         (a-1)  The claimant must send the notice of claim for unpaid
  retainage to the owner or reputed owner and the original contractor
  not later than the earlier of: 
               (1)  the 30th day after the date the claimant's contract
  is completed, terminated, or abandoned; or
               (2)  the 30th day after the date the original contract
  is terminated or abandoned.
         (a-2)  The notice must be in substantially the following
  form:
  "NOTICE OF CLAIM FOR UNPAID RETAINAGE
  "WARNING: This notice is provided to preserve lien rights.
  "Owner's property may be subject to a lien if sufficient funds are
  not withheld from future payments to the original contractor to
  cover this debt.
         "Date:________________
         "Project description and/or address: ________________
         "Claimant's name: ________________
         "Type of labor or materials provided: ________________
         "Original contractor's name: ________________
         "Party with whom claimant contracted if different from
  original contractor: ________________
         "Total retainage unpaid: ________________
         "________________ (Claimant's contact person)
         "________________ (Claimant's address)"
         (a-3)  The notice may include an invoice or billing
  statement.
         (f)  A claimant has a lien on, and the owner is personally
  liable to the claimant for, the reserved [retained] funds under
  Subchapter E if the claimant:
               (1)  gives notice in accordance with this section and:
                     (A)  complies with Subchapter E; or
                     (B)  files an affidavit claiming a lien not later
  than [the earliest of:
                           [(i)]  the date required for filing an
  affidavit under the applicable provision of Section 53.052[;
                           [(ii)  the 40th day after the date stated in
  an affidavit of completion as the date of completion of the work
  under the original contract, if the owner sent the claimant notice
  of an affidavit of completion in the time and manner required;
                           [(iii)  the 40th day after the date of
  termination or abandonment of the original contract, if the owner
  sent the claimant a notice of such termination or abandonment in the
  time and manner required; or
                           [(iv)  the 30th day after the date the owner
  sent to the claimant to the claimant's address provided in the
  notice for contractual retainage, as required under Subsection (c),
  a written notice of demand for the claimant to file the affidavit
  claiming a lien]; and
               (2)  gives the notice of the filed affidavit as
  required by Section 53.055.
         SECTION 14.  Sections 53.081(a) and (b), Property Code, are
  amended to read as follows:
         (a)  If an owner receives notice under Section 53.056 or [,]
  53.057, [53.058, 53.252, or 53.253,] the owner may withhold from
  payments to the original contractor an amount necessary to pay the
  claim for which he receives notice.  The withholding may be in
  addition to any reserved funds.
         (b)  If notice is sent under [in a form that substantially
  complies with] Section 53.056 [or 53.252], the owner may withhold
  the funds immediately on receipt of the notice.
         SECTION 15.  Section 53.082, Property Code, is amended to
  read as follows:
         Sec. 53.082.  TIME FOR WHICH FUNDS ARE WITHHELD. Unless
  [payment is made under Section 53.083 or] the claim is otherwise
  settled, discharged, indemnified against under Subchapter H or I,
  or determined to be invalid by a final judgment of a court, the
  owner shall retain the funds withheld until:
               (1)  the time for filing the affidavit of mechanic's
  lien has passed; or
               (2)  if a lien affidavit has been filed, [until] the
  lien claim has been satisfied or released.
         SECTION 16.  Section 53.084, Property Code, is amended to
  read as follows:
         Sec. 53.084.  OWNER'S LIABILITY.  (a)  Except for the amount
  the owner fails to reserve [required to be retained] under
  Subchapter E, the owner is not liable for any amount paid to the
  original contractor before the owner is authorized to withhold
  funds under this subchapter.
         (b)  If the owner has received a notice [the notices]
  required by Section 53.056 or 53.057 [Subchapter C or K], if the
  lien has been secured, and if the claim has been reduced to final
  judgment, the owner is liable and the owner's property is subject to
  a claim for any money paid to the original contractor after the
  owner was authorized to withhold funds under this subchapter.  The
  owner is liable for that amount in addition to any amount for which
  the owner [he] is liable under Subchapter E.
         SECTION 17.  The heading to Subchapter E, Chapter 53,
  Property Code, is amended to read as follows:
  SUBCHAPTER E.  FUNDS RESERVED [REQUIRED RETAINAGE] FOR BENEFIT OF
  LIEN CLAIMANTS
         SECTION 18.  Sections 53.101, 53.102, 53.103, 53.104, and
  53.105, Property Code, are amended to read as follows:
         Sec. 53.101.  FUNDS REQUIRED TO BE RESERVED [RETAINAGE].
  (a) During the progress of work under an original contract for
  which a mechanic's lien may be claimed and for 30 days after the
  work under the contract is completed, the owner shall reserve
  [retain]:
               (1)  10 percent of the contract price of the work to the
  owner; or
               (2)  10 percent of the value of the work, measured by
  the proportion that the work done bears to the work to be done,
  using the contract price or, if there is no contract price, using
  the reasonable value of the completed work.
         (b)  In this section, "owner" includes the owner's agent,
  trustee, or receiver.
         Sec. 53.102.  PAYMENT SECURED BY RESERVED FUNDS [RETAINAGE].
  The reserved [retained] funds secure the payment of artisans and
  mechanics who perform labor or service and the payment of other
  persons who furnish material, material and labor, or specially
  fabricated material for any contractor, subcontractor, agent, or
  receiver in the performance of the work.
         Sec. 53.103.  LIEN ON RESERVED [RETAINED] FUNDS.  A claimant
  has a lien on the reserved [retained] funds if the claimant:
               (1)  sends the notices required by this chapter in the
  time and manner required; and
               (2)  except as allowed by Section 53.057(f), files an
  affidavit claiming a lien not later than the 30th day after the
  earliest of the date:
                     (A)  the work is completed;
                     (B)  the original contract is terminated; or
                     (C)  the original contractor abandons performance
  under the original contract.
         Sec. 53.104.  PREFERENCES. (a) Individual artisans and
  mechanics are entitled to a preference to the reserved [retained]
  funds and shall share proportionately to the extent of their claims
  for wages and fringe benefits earned.
         (b)  After payment of artisans and mechanics who are entitled
  to a preference under Subsection (a), other participating claimants
  share proportionately in the balance of the reserved [retained]
  funds.
         Sec. 53.105.  OWNER'S LIABILITY FOR FAILURE TO RESERVE FUNDS
  [RETAIN]. (a)  If the owner fails or refuses to comply with this
  subchapter, the claimants complying with Subchapter C or this
  subchapter have a lien, at least to the extent of the amount that
  should have been reserved [retained] from the original contract
  under which they are claiming, against the improvements [house,
  building, structure, fixture, or improvement] and all of its
  properties and against the lot or lots of land necessarily
  connected.
         (b)  The claimants share the lien proportionately in
  accordance with the preference provided by Section 53.104.
         SECTION 19.  Sections 53.106(a), (b), and (d), Property
  Code, are amended to read as follows:
         (a)  An owner may file with the county clerk of the county in
  which the property is located an affidavit of completion.  The
  affidavit must contain:
               (1)  the name and address of the owner;
               (2)  the name and address of the original contractor;
               (3)  a description, legally sufficient for
  identification, of the real property on which the improvements are
  located;
               (4)  a description of the improvements furnished under
  the original contract;
               (5)  a statement that the improvements under the
  original contract have been completed and the date of completion;
  and
               (6)  a conspicuous statement that a claimant may not
  have a lien on retained funds unless the claimant files an affidavit
  claiming a lien in the time and manner required by this chapter [not
  later than the 40th day after the date the work under the original
  contract is completed].
         (b)  A copy of the affidavit must be sent [by certified or
  registered mail] to the original contractor [not later than the
  date the affidavit is filed] and to each claimant who sends a notice
  [of lien liability] to the owner under Section 53.056 or [,] 53.057
  [, 53.058, 53.252, or 53.253] not later than the third day after the 
  date the affidavit is filed or the 10th day after the date the owner
  receives the notice of lien liability, whichever is later.
         (d)  An [Except as provided by this subsection, an] affidavit
  filed under this section [on or before the 10th day after the date
  of completion of the improvements] is prima facie evidence of the
  date the work under the original contract is completed for purposes
  of this chapter [subchapter and Section 53.057]. If the affidavit
  is filed after the 10th day after the date of completion, the date
  of completion for purposes of this subchapter [and Section 53.057]
  is the date the affidavit is filed. This subsection does not apply
  to a person to whom the affidavit was not sent as required by this
  section.
         SECTION 20.  Sections 53.107(a) and (b), Property Code, are
  amended to read as follows:
         (a)  Not later than the 10th day after the date an original
  contract is terminated or the original contractor abandons
  performance under the original contract, the owner shall give
  notice to each subcontractor who, before the date of termination or
  abandonment, has:
               (1)  given notice to the owner as provided by Section
  53.056 or [,] 53.057 [, or 53.058]; or
               (2)  sent to the owner [by certified or registered
  mail] a written request for notice of termination or abandonment.
         (b)  The notice must contain:
               (1)  the name and address of the owner;
               (2)  the name and address of the original contractor;
               (3)  a description, legally sufficient for
  identification, of the real property on which the improvements are
  located;
               (4)  a general description of the improvements agreed
  to be furnished under the original contract;
               (5)  a statement that the original contract has been
  terminated or that performance under the contract has been
  abandoned;
               (6)  the date of the termination or abandonment; and
               (7)  a conspicuous statement that a claimant may not
  have a lien on the retained funds unless the claimant files an
  affidavit claiming a lien in the time and manner required by this
  chapter [not later than the 40th day after the date of the
  termination or abandonment].
         SECTION 21.  Section 53.155, Property Code, is amended to
  read as follows:
         Sec. 53.155.  TRANSFER OF PROPERTY SOLD. If the [house,
  building,] improvement [, or any piece of railroad property] is
  sold separately from the land, the officer making the sale shall
  provide [place] the purchaser [in possession. The purchaser is
  entitled to] a reasonable time after the date of purchase within
  which to remove and take possession of the purchased improvement 
  [property].
         SECTION 22.  Section 53.157, Property Code, is amended to
  read as follows:
         Sec. 53.157.  DISCHARGE OF LIEN. An [A mechanic's lien or]
  affidavit claiming a mechanic's lien filed under Section 53.052 may
  be discharged of record by:
               (1)  recording a lien release signed by the claimant
  under Section 53.152;
               (2)  failing to institute suit to foreclose the lien in
  the county in which the improvement [property] is located within
  the period prescribed by Section 53.158, 53.175, or 53.208;
               (3)  recording the original or certified copy of a
  final judgment or decree of a court of competent jurisdiction
  providing for the discharge;
               (4)  filing the bond and notice in compliance with
  Subchapter H;
               (5)  filing the bond in compliance with Subchapter I;
  or
               (6)  recording a certified copy of the order removing
  the lien under Section 53.160, provided [and a certificate from the
  clerk of the court that states] that no bond or deposit as described
  by Section 53.161 was filed by the claimant within 30 days after the
  date the order was entered.
         SECTION 23.  Section 53.158, Property Code, is amended by
  amending Subsection (a) and adding Subsections (a-1) and (a-2) to
  read as follows:
         (a)  Except as provided by Subsection (a-2) [(b)], suit must
  be brought to foreclose the lien not later than the first
  anniversary of [within two years after] the last day a claimant may
  file the lien affidavit under Section 53.052 [or within one year
  after completion, termination, or abandonment of the work under the
  original contract under which the lien is claimed, whichever is
  later].
         (a-1)  Notwithstanding Section 16.069, Civil Practice and
  Remedies Code, or any other law, if suit is pursued solely to
  discharge a lien because limitations have expired on bringing a
  lien foreclosure suit, the lien claimant's rights to pursue a suit
  to foreclose a lien are not revived.
         (a-2)  The limitations period established under Subsection
  (a) may be extended to not later than the second anniversary of the
  date the claimant filed the lien affidavit under Section 53.052 if,
  before the expiration of the limitations period established under
  Subsection (a), the claimant enters into a written agreement with
  the then-current record owner of the property to extend the
  limitations period. The agreement must be recorded with the clerk
  of the same county where the lien was recorded and is considered to
  be notice of the extension to any subsequent purchaser.
         SECTION 24.  Sections 53.160(b) and (c), Property Code, are
  amended to read as follows:
         (b)  The grounds for objecting to the validity or
  enforceability of the claim or lien for purposes of the motion are
  limited to the following:
               (1)  notice of claim was not timely furnished to the
  owner or original contractor as required by Section 53.056 or [,]
  53.057 [, 53.058, 53.252, or 53.253];
               (2)  an affidavit claiming a lien failed to comply with
  Section 53.054 or was not filed as required by Section 53.052;
               (3)  notice of the filed affidavit was not furnished to
  the owner or original contractor as required by Section 53.055;
               (4)  the deadlines for perfecting a lien claim for
  retainage under this chapter have expired and the owner complied
  with the requirements of Section 53.101 and paid the retainage and
  all other funds owed to the original contractor before:
                     (A)  the claimant perfected the lien claim; and
                     (B)  the owner received a notice of the claim as
  required by this chapter;
               (5)  all funds subject to the notice of a claim to the
  owner and a notice regarding the retainage have been deposited in
  the registry of the court and the owner has no additional liability
  to the claimant;
               (6)  when the lien affidavit was filed on homestead
  property:
                     (A)  no contract was executed or filed as required
  by Section 53.254;
                     (B)  the affidavit claiming a lien failed to
  contain the notice as required by Section 53.254; or
                     (C)  the notice of the claim failed to include the
  statement required by Section 53.254; and
               (7)  the claimant executed a valid and enforceable
  waiver or release of the claim or lien claimed in the affidavit.
         (c)  The claimant is not required to file a response.  The
  claimant and any other party that has appeared in the proceeding
  must be notified by at least 30 [21] days before the date of the
  hearing on the motion. A motion may not be heard before the 30th
  [21st] day after the date the claimant answers or appears in the
  proceeding. The claimant must be allowed expedited discovery
  regarding information relevant to the issues listed under
  Subsection (b).
         SECTION 25.  Section 53.173(c), Property Code, is amended to
  read as follows:
         (c)  The notice must be served on each obligee by mailing a
  copy of the notice and the bond to the obligee by certified [United
  States] mail[, return receipt requested,] addressed to the claimant
  at the address stated in the lien affidavit for the obligee.
         SECTION 26.  Section 53.205(a), Property Code, is amended to
  read as follows:
         (a)  The bond protects all persons with a claim that is:
               (1)  perfected in the manner prescribed for fixing a
  lien under Subchapter C [or, if the claim relates to a residential
  construction project, under Subchapter K]; or
               (2)  perfected in the manner prescribed by Section
  53.206.
         SECTION 27.  Section 53.206, Property Code, is amended to
  read as follows:
         Sec. 53.206.  PERFECTION OF CLAIM.  (a)  Except as provided
  by Subsection (b), to [To] perfect a claim against a bond in a
  manner other than that prescribed by Subchapter C [or K] for fixing
  a lien, a person must [:
               [(1)]  give notice under Sections 53.056 and 53.057, as
  applicable, to the original contractor and surety on the bond [all
  applicable notices under the appropriate subchapter; and
               [(2)  give to the surety on the bond, instead of the
  owner, all notices under the appropriate subchapter required to be
  given to the owner].
         (b)  To perfect a claim for retainage under this section, a
  claimant [person] is not required to[:
               [(1)]  give notice to the surety under Section 53.057
  if [, unless] the claimant has a direct contractual relationship
  with the original contractor [and the agreed retainage is in excess
  of 10 percent of the contract;
               [(2)  give notice to the surety under Section 53.058(b)
  or, if the claim relates to a residential construction project,
  under Section 53.253(c); or
               [(3)  file any affidavit with the county clerk].
         (c)  A claimant that provides the notices described by this
  section is not required to file an affidavit claiming a mechanic's
  lien to perfect a claim under the bond [For the claim to be valid, a
  person must give notice in the time and manner required by this
  section, but the content of the notices need only provide fair
  notice of the amount and the nature of the claim asserted].
         (d)  A person satisfies the requirements of this section
  relating to providing notice to the surety if the person mails the
  notice by certified [or registered] mail to the surety:
               (1)  at the address stated on the bond or on an
  attachment to the bond;
               (2)  at the address on file with the Texas Department of
  Insurance; or
               (3)  at any other address allowed by law.
         SECTION 28.  Section 53.207(a), Property Code, is amended to
  read as follows:
         (a)  If the owner receives any of the notices or a lien is
  fixed under this chapter [Subchapter C or K], the owner shall mail
  to the surety on the bond a copy of all notices received.
         SECTION 29.  Section 53.208(a), Property Code, is amended to
  read as follows:
         (a)  A claimant may sue the principal and surety on the bond
  either jointly or severally, if the [his] claim remains unpaid for
  60 days after the claimant perfects the claim.
         SECTION 30.  Section 53.232, Property Code, is amended to
  read as follows:
         Sec. 53.232.  TO WHOM NOTICE GIVEN; MANNER. The lien
  claimant must send written notice of his claim by [registered or]
  certified mail to:
               (1)  the officials of the state, county, town, or
  municipality whose duty it is to pay the contractor; and
               (2)  the contractor at the contractor's last known
  business or residence address.
         SECTION 31.  Section 53.238, Property Code, is amended to
  read as follows:
         Sec. 53.238.  NOTICE OF BOND. The official with whom the
  bond is filed shall send an exact copy of the bond by [registered
  mail or] certified mail, return receipt requested, to all
  claimants.
         SECTION 32.  The heading to Section 53.254, Property Code,
  is amended to read as follows:
         Sec. 53.254.  CONTRACTUAL REQUIREMENTS FOR LIEN ON
  HOMESTEAD.
         SECTION 33.  Section 53.254(g), Property Code, is amended to
  read as follows:
         (g)  For the lien on a homestead to be valid, the notice
  required to be given to the owner under Subchapter C [Section
  53.252] must include or have attached the following statement:
         "If a subcontractor or supplier who furnishes materials or
  performs labor for construction of improvements on your property is
  not paid, your property may be subject to a lien for the unpaid
  amount if:
               (1)  after receiving notice of the unpaid claim from
  the claimant, you fail to withhold payment to your contractor that
  is sufficient to cover the unpaid claim until the dispute is
  resolved; or
               (2)  during construction and for 30 days after
  completion of your contractor's work [construction], you fail to
  reserve [retain] 10 percent of the contract price or 10 percent of
  the value of the work performed by your contractor.
         "If you have complied with the law regarding the reservation
  of 10 percent of the contract price or value of work [retainage] and
  you have withheld payment to the contractor sufficient to cover any
  written notice of claim and have paid that amount, if any, to the
  claimant, any lien claim filed on your property by a subcontractor
  or supplier, other than a person who contracted directly with you,
  will not be a valid lien on your property. In addition, except for
  the required 10 percent reservation [retainage], you are not liable
  to a subcontractor or supplier for any amount paid to your
  contractor before you received written notice of the claim."
         SECTION 34.  Section 53.255(b), Property Code, is amended to
  read as follows:
         (b)  The disclosure statement must read substantially
  similar to the following:
         "KNOW YOUR RIGHTS AND RESPONSIBILITIES UNDER THE LAW. You
  are about to enter into a transaction to build a new home or remodel
  existing residential property. Texas law requires your contractor
  to provide you with this brief overview of some of your rights,
  responsibilities, and risks in this transaction.
         "CONVEYANCE TO CONTRACTOR NOT REQUIRED. Your contractor may
  not require you to convey your real property to your contractor as a
  condition to the agreement for the construction of improvements on
  your property.
         "KNOW YOUR CONTRACTOR. Before you enter into your agreement
  for the construction of improvements to your real property, make
  sure that you have investigated your contractor. Obtain and verify
  references from other people who have used the contractor for the
  type and size of construction project on your property.
         "GET IT IN WRITING. Make sure that you have a written
  agreement with your contractor that includes: (1)  a description of
  the work the contractor is to perform; (2)  the required or
  estimated time for completion of the work; (3)  the cost of the work
  or how the cost will be determined; and (4)  the procedure and
  method of payment, including provisions for statutory reservation
  of funds [retainage] and conditions for final payment. If your
  contractor made a promise, warranty, or representation to you
  concerning the work the contractor is to perform, make sure that
  promise, warranty, or representation is specified in the written
  agreement. An oral promise that is not included in the written
  agreement may not be enforceable under Texas law.
         "READ BEFORE YOU SIGN. Do not sign any document before you
  have read and understood it. NEVER SIGN A DOCUMENT THAT INCLUDES AN
  UNTRUE STATEMENT. Take your time in reviewing documents. If you
  borrow money from a lender to pay for the improvements, you are
  entitled to have the loan closing documents furnished to you for
  review at least one business day before the closing. Do not waive
  this requirement unless a bona fide emergency or another good cause
  exists, and make sure you understand the documents before you sign
  them. If you fail to comply with the terms of the documents, you
  could lose your property. You are entitled to have your own
  attorney review any documents. If you have any question about the
  meaning of a document, consult an attorney.
         "GET A LIST OF SUBCONTRACTORS AND SUPPLIERS. Before
  construction commences, your contractor is required to provide you
  with a list of the subcontractors and suppliers the contractor
  intends to use on your project. Your contractor is required to
  supply updated information on any subcontractors and suppliers
  added after the list is provided. Your contractor is not required
  to supply this information if you sign a written waiver of your
  rights to receive this information.
         "MONITOR THE WORK. Lenders and governmental authorities may
  inspect the work in progress from time to time for their own
  purposes. These inspections are not intended as quality control
  inspections. Quality control is a matter for you and your
  contractor. To ensure that your home is being constructed in
  accordance with your wishes and specifications, you should inspect
  the work yourself or have your own independent inspector review the
  work in progress.
         "MONITOR PAYMENTS. If you use a lender, your lender is
  required to provide you with a periodic statement showing the money
  disbursed by the lender from the proceeds of your loan. Each time
  your contractor requests payment from you or your lender for work
  performed, your contractor is also required to furnish you with a
  disbursement statement that lists the name and address of each
  subcontractor or supplier that the contractor intends to pay from
  the requested funds. Review these statements and make sure that the
  money is being properly disbursed.
         "CLAIMS BY SUBCONTRACTORS AND SUPPLIERS. Under Texas law, if
  a subcontractor or supplier who furnishes labor or materials for
  the construction of improvements on your property is not paid, you
  may become liable and your property may be subject to a lien for the
  unpaid amount, even if you have not contracted directly with the
  subcontractor or supplier. To avoid liability, you should take the
  following actions:
               (1)  If you receive a written notice from a
  subcontractor or supplier, you should withhold payment from your
  contractor for the amount of the claim stated in the notice until
  the dispute between your contractor and the subcontractor or
  supplier is resolved. If your lender is disbursing money directly
  to your contractor, you should immediately provide a copy of the
  notice to your lender and instruct the lender to withhold payment in
  the amount of the claim stated in the notice. If you continue to pay
  the contractor after receiving the written notice without
  withholding the amount of the claim, you may be liable and your
  property may be subject to a lien for the amount you failed to
  withhold.
               (2)  During construction and for 30 days after final
  completion, termination, or abandonment of the contract by the
  contractor, you should reserve [withhold] or cause your lender to
  reserve [withhold] 10 percent of the amount of payments made for the
  work performed by your contractor. [This is sometimes referred to
  as 'statutory retainage.'] If you choose not to reserve [withhold]
  the 10 percent for at least 30 days after final completion,
  termination, or abandonment of the contract by the contractor and
  if a valid claim is timely made by a claimant and your contractor
  fails to pay the claim, you may be personally liable and your
  property may be subject to a lien up to the amount that you failed to
  reserve [withhold].
         "If a claim is not paid within a certain time period, the
  claimant is required to file a mechanic's lien affidavit in the real
  property records in the county where the property is located. A
  mechanic's lien affidavit is not a lien on your property, but the
  filing of the affidavit could result in a court imposing a lien on
  your property if the claimant is successful in litigation to
  enforce the lien claim.
         "SOME CLAIMS MAY NOT BE VALID. When you receive a written
  notice of a claim or when a mechanic's lien affidavit is filed on
  your property, you should know your legal rights and
  responsibilities regarding the claim. Not all claims are valid. A
  notice of a claim by a subcontractor or supplier is required to be
  sent, and the mechanic's lien affidavit is required to be filed,
  within strict time periods. The notice and the affidavit must
  contain certain information. All claimants may not fully comply
  with the legal requirements to collect on a claim. If you have paid
  the contractor in full before receiving a notice of a claim and have
  withheld the 10 percent of the contract price or value of work 
  [fully complied with the law regarding statutory retainage], you
  may not be liable for that claim. Accordingly, you should consult
  your attorney when you receive a written notice of a claim to
  determine the true extent of your liability or potential liability
  for that claim.
         "OBTAIN A LIEN RELEASE AND A BILLS-PAID AFFIDAVIT. When you
  receive a notice of claim, do not release withheld funds without
  obtaining a signed and notarized release of lien and claim from the
  claimant. You can also reduce the risk of having a claim filed by a
  subcontractor or supplier by requiring as a condition of each
  payment made by you or your lender that your contractor furnish you
  with an affidavit stating that all bills have been paid. Under
  Texas law, on final completion of the work and before final payment,
  the contractor is required to furnish you with an affidavit stating
  that all bills have been paid. If the contractor discloses any
  unpaid bill in the affidavit, you should withhold payment in the
  amount of the unpaid bill until you receive a waiver of lien or
  release from that subcontractor or supplier.
         "OBTAIN TITLE INSURANCE PROTECTION. You may be able to obtain
  a title insurance policy to insure that the title to your property
  and the existing improvements on your property are free from liens
  claimed by subcontractors and suppliers. If your policy is issued
  before the improvements are completed and covers the value of the
  improvements to be completed, you should obtain, on the completion
  of the improvements and as a condition of your final payment,
  a 'completion of improvements' policy endorsement. This
  endorsement will protect your property from liens claimed by
  subcontractors and suppliers that may arise from the date the
  original title policy is issued to the date of the endorsement."
         SECTION 35.  Section 53.281(b), Property Code, is amended to
  read as follows:
         (b)  A waiver and release is effective to release the owner,
  the owner's property, the contractor, and the surety on a payment
  bond from claims and liens only if:
               (1)  the waiver and release substantially complies with
  one of the forms prescribed by Section 53.284;
               (2)  the waiver and release is signed by the claimant or
  the claimant's authorized agent [and notarized]; and
               (3)  in the case of a conditional release, evidence of
  payment to the claimant exists.
         SECTION 36.  The following provisions of the Property Code
  are repealed:
               (1)  Section 53.003(a);
               (2)  Section 53.026(b);
               (3)  Section 53.053;
               (4)  Sections 53.056(b), (c), (d), (e), and (f);
               (5)  Sections 53.057(b), (b-1), (c), (d), (e), and (g);
               (6)  Section 53.058;
               (7)  Section 53.081(d);
               (8)  Section 53.083;
               (9)  Section 53.158(b); and
               (10)  Sections 53.252 and 53.253.
         SECTION 37.  The changes in law made by this Act apply only
  to an original contract entered into on or after the effective date
  of this Act. An original contract entered into before the effective
  date of this Act is governed by the law as it existed immediately
  before the effective date of this Act, and that law is continued in
  effect for that purpose.
         SECTION 38.  This Act takes effect January 1, 2022.
 
  * * * * *