Co-author: Stephanie Snyder-Zuasnabar
Texas has new lien laws that affect all construction projects with a prime contract dated on or after January 1, 2022. The new lien laws are particularly helpful to architects, engineers, and surveyors. Design professionals will benefit from the expanded lien rights provided by this new legislation. Lower tier design professionals will now be able to perfect liens in a manner similar to subcontractors and suppliers. The new law also expanded the type of design work that gives rise to lien rights. These changes collectively level the playing field.
There are two key changes to understand. First, design professions were previously only able to file a lien if they had a direct contract with the owner or the owner’s agent. The new law removes that limitation. A direct contractual relationship with the owner is no longer required. This means that downstream architects and engineers can file liens just like sub-subcontractors and suppliers can. Second, design professionals’ lienable service under the old statute was limited to preparing a “plan or plat.” Now, lienable labor includes “professional service used in the direct preparation for the work of a design, drawing, plan, plat, survey, or specification.” These changes to Chapter 53 entitle design professionals to lien rights regardless of whether their contract is with the owner, general contractor, or a subcontractor.
This effectively puts architects, engineers and surveyors in the same boat as everyone else. But, this means downstream design professionals, like subcontractors and suppliers, will have to send pre-lien notices. The good news is that the new legislation also eases the burden of sending pre-lien notices. There is no longer a second month notice requirement for parties who are sub-subcontractors, suppliers who deal with subcontractors or similarly downstream design professionals. Now, the statute only requires the third month notice (which must be sent by the 15th day following the third month after labor is provided). This change does not prohibit sending a second month notice or sending the third month notice early; rather, it removes a hurdle that was impeding the perfection of lien rights. The amended statute now provides clear examples of what notice forms should look like for both unpaid labor and materials and contractual retainage.
These new rights will help design professionals secure payment, but only if properly utilized. It is important for design professionals to understand these changes and implement processes to perfect liens.