Texas Laws - Property Code
PROPERTY CODE
TITLE 5. EXEMPT PROPERTY AND LIENS

SUBTITLE B. LIENS (2533)(1-click HTML)

CHAPTER 51. PROVISIONS GENERALLY APPLICABLE TO LIENS (2534)(1-click HTML)
Sec. 51.0001. DEFINITIONS. (2535)(1-click HTML)

In this chapter: (2536)

(1) "Book entry system" means a national book entry system for registering a beneficial interest in a security instrument that acts as a nominee for the grantee, beneficiary, owner, or holder of the security instrument and its successors and assigns. (2537)

(2) "Debtor's last known address" means: (2538)

(A) for a debt secured by the debtor's residence, the debtor's residence address unless the debtor provided the mortgage servicer a written change of address before the date the mortgage servicer mailed a notice required by Section 51.002; or (2539)

(B) for a debt other than a debt described by Paragraph (A), the debtor's last known address as shown by the records of the mortgage servicer of the security instrument unless the debtor provided the current mortgage servicer a written change of address before the date the mortgage servicer mailed a notice required by Section 51.002. (2540)

(3) "Mortgage servicer" means the last person to whom a mortgagor has been instructed by the current mortgagee to send payments for the debt secured by a security instrument. A mortgagee may be the mortgage servicer. (2541)

(4) "Mortgagee" means: (2542)

(A) the grantee, beneficiary, owner, or holder of a security instrument; (2543)

(B) a book entry system; or (2544)

(C) if the security interest has been assigned of record, the last person to whom the security interest has been assigned of record. (2545)

(5) "Mortgagor" means the grantor of a security instrument. (2546)

(6) "Security instrument" means a deed of trust, mortgage, or other contract lien on an interest in real property. (2547)

(7) "Substitute trustee" means a person appointed by the current mortgagee or mortgage servicer under the terms of the security instrument to exercise the power of sale. (2548)

(8) "Trustee" means a person or persons authorized to exercise the power of sale under the terms of a security instrument in accordance with Section 51.0074. (2549)

Added by Acts 2003, 78th Leg., ch. 554, Sec. 1, eff. Jan. 1, 2004. (2550)

Amended by: (2551)

Acts 2007, 80th Leg., R.S., Ch. 903 (H.B. 2738), Sec. 1, eff. June 15, 2007. (2552)

Sec. 51.001. EFFECT ON OTHER LIENS. (2553)(1-click HTML)

Except as provided by Chapter 59, this subtitle does not affect: (2554)

(1) the right to create a lien by special contract or agreement; or (2555)

(2) a lien that is not treated in this subtitle, including a lien arising under common law, in equity, or under another statute of this state. (2556)

Acts 1983, 68th Leg., p. 3525, ch. 576, Sec. 1, eff. Jan. 1, 1984. (2557)

Sec. 51.0011. DEFAULT ARISING FROM DELINQUENT AD VALOREM TAXES: INSTALLMENT AGREEMENTS. (2558)(1-click HTML)

(a) Notwithstanding any agreement to the contrary, a debtor is not in default under a deed of trust or other contract lien on real property used as the debtor's residence for the delinquent payment of ad valorem taxes if: (2559)

(1) the debtor gave notice to the mortgage servicer of the intent to enter into an installment agreement with the taxing unit under Section 33.02, Tax Code, for the payment of the taxes at least 10 days before the date the debtor entered into the agreement; and (2560)

(2) the property is protected from seizure and sale and a suit may not be filed to collect a delinquent tax on the property as provided by Section 33.02(d), Tax Code. (2561)

(b) A mortgage servicer who receives a notice described by Subsection (a)(1) may pay the taxes subject to the installment agreement at any time. (2562)

(c) A mortgage servicer who receives a notice described by Subsection (a)(1) and gives the debtor notice that the mortgage servicer intends to accelerate the note securing the deed of trust or other contract lien as a result of the delinquency of the taxes that are subject to the installment agreement must rescind the notice if the debtor enters into the agreement not later than the 30th day after the date the debtor delivers the notice. (2563)

Added by Acts 2013, 83rd Leg., R.S., Ch. 935 (H.B. 1597), Sec. 4, eff. September 1, 2013. (2564)

Sec. 51.002. SALE OF REAL PROPERTY UNDER CONTRACT LIEN. (2565)(1-click HTML)

(a) A sale of real property under a power of sale conferred by a deed of trust or other contract lien must be a public sale at auction held between 10 a.m. and 4 p.m. of the first Tuesday of a month. Except as provided by Subsection (h), the sale must take place at the county courthouse in the county in which the land is located, or if the property is located in more than one county, the sale may be made at the courthouse in any county in which the property is located. The commissioners court shall designate the area at the courthouse where the sales are to take place and shall record the designation in the real property records of the county. The sale must occur in the designated area. If no area is designated by the commissioners court, the notice of sale must designate the area where the sale covered by that notice is to take place, and the sale must occur in that area. (2566)

(b) Except as provided by Subsection (b-1), notice of the sale, which must include a statement of the earliest time at which the sale will begin, must be given at least 21 days before the date of the sale by: (2567)

(1) posting at the courthouse door of each county in which the property is located a written notice designating the county in which the property will be sold; (2568)

(2) filing in the office of the county clerk of each county in which the property is located a copy of the notice posted under Subdivision (1); and (2569)

(3) serving written notice of the sale by certified mail on each debtor who, according to the records of the mortgage servicer of the debt, is obligated to pay the debt. (2570)

(b-1) If the courthouse or county clerk's office is closed because of inclement weather, natural disaster, or other act of God, a notice required to be posted at the courthouse under Subsection (b)(1) or filed with the county clerk under Subsection (b)(2) may be posted or filed, as appropriate, up to 48 hours after the courthouse or county clerk's office reopens for business, as applicable. (2571)

(c) The sale must begin at the time stated in the notice of sale or not later than three hours after that time. (2572)

(d) Notwithstanding any agreement to the contrary, the mortgage servicer of the debt shall serve a debtor in default under a deed of trust or other contract lien on real property used as the debtor's residence with written notice by certified mail stating that the debtor is in default under the deed of trust or other contract lien and giving the debtor at least 20 days to cure the default before notice of sale can be given under Subsection (b). The entire calendar day on which the notice required by this subsection is given, regardless of the time of day at which the notice is given, is included in computing the 20-day notice period required by this subsection, and the entire calendar day on which notice of sale is given under Subsection (b) is excluded in computing the 20-day notice period. (2573)

(e) Service of a notice under this section by certified mail is complete when the notice is deposited in the United States mail, postage prepaid and addressed to the debtor at the debtor's last known address. The affidavit of a person knowledgeable of the facts to the effect that service was completed is prima facie evidence of service. (2574)

(f) Each county clerk shall keep all notices filed under Subdivision (2) of Subsection (b) in a convenient file that is available to the public for examination during normal business hours. The clerk may dispose of the notices after the date of sale specified in the notice has passed. The clerk shall receive a fee of $2 for each notice filed. (2575)

(f-1) If a county maintains an Internet website, the county must post a notice of sale filed with the county clerk under Subsection (b)(2) on the website on a page that is publicly available for viewing without charge or registration. (2576)

(g) The entire calendar day on which the notice of sale is given, regardless of the time of day at which the notice is given, is included in computing the 21-day notice period required by Subsection (b), and the entire calendar day of the foreclosure sale is excluded. (2577)

(h) For the purposes of Subsection (a), the commissioners court of a county may designate an area other than an area at the county courthouse where public sales of real property under this section will take place that is in a public place within a reasonable proximity of the county courthouse as determined by the commissioners court and in a location as accessible to the public as the courthouse door. The commissioners court shall record that designation in the real property records of the county. A designation by a commissioners court under this section is not a ground for challenging or invalidating any sale. A sale must be held at an area designated under this subsection if the sale is held on or after the 90th day after the date the designation is recorded. The posting of the notice required by Subsection (b)(1) of a sale designated under this subsection to take place at an area other than an area of the courthouse remains at the courthouse door of the appropriate county. (2578)

(i) Notice served on a debtor under this section must state the name and address of the sender of the notice and contain, in addition to any other statements required under this section, a statement that is conspicuous, printed in boldface or underlined type, and substantially similar to the following: "Assert and protect your rights as a member of the armed forces of the United States. If you are or your spouse is serving on active military duty, including active military duty as a member of the Texas National Guard or the National Guard of another state or as a member of a reserve component of the armed forces of the United States, please send written notice of the active duty military service to the sender of this notice immediately." (2579)

Acts 1983, 68th Leg., p. 3525, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 18, Sec. 3(b), eff. Oct. 2, 1984; Acts 1987, 70th Leg., ch. 540, Sec. 1, eff. Jan. 1, 1988; Acts 1993, 73rd Leg., ch. 48, Sec. 5, eff. Sept. 1, 1993; Acts 2003, 78th Leg., ch. 554, Sec. 2, eff. Jan. 1, 2004. (2580)

Amended by: (2581)

Acts 2005, 79th Leg., Ch. 533 (H.B. 961), Sec. 1, eff. June 17, 2005. (2582)

Acts 2005, 79th Leg., Ch. 555 (H.B. 1235), Sec. 1, eff. September 1, 2005. (2583)

Acts 2007, 80th Leg., R.S., Ch. 903 (H.B. 2738), Sec. 2, eff. June 15, 2007. (2584)

Acts 2011, 82nd Leg., R.S., Ch. 252 (H.B. 1127), Sec. 2, eff. January 1, 2012. (2585)

Acts 2011, 82nd Leg., R.S., Ch. 592 (S.B. 101), Sec. 1, eff. September 1, 2011. (2586)

Acts 2013, 83rd Leg., R.S., Ch. 52 (H.B. 584), Sec. 1, eff. September 1, 2013. (2587)

Acts 2013, 83rd Leg., R.S., Ch. 161 (S.B. 1093), Sec. 17.001, eff. September 1, 2013. (2588)

Acts 2013, 83rd Leg., R.S., Ch. 642 (H.B. 699), Sec. 2, eff. October 1, 2013. (2589)

Sec. 51.0021. NOTICE OF CHANGE OF ADDRESS REQUIRED. (2590)(1-click HTML)

A debtor shall inform the mortgage servicer of the debt in a reasonable manner of any change of address of the debtor for purposes of providing notice to the debtor under Section 51.002. (2591)

Added by Acts 2003, 78th Leg., ch. 554, Sec. 1, eff. Jan. 1, 2004. (2592)

Sec. 51.0025. ADMINISTRATION OF FORECLOSURE BY MORTGAGE SERVICER. (2593)(1-click HTML)

A mortgage servicer may administer the foreclosure of property under Section 51.002 on behalf of a mortgagee if: (2594)

(1) the mortgage servicer and the mortgagee have entered into an agreement granting the current mortgage servicer authority to service the mortgage; and (2595)

(2) the notices required under Section 51.002(b) disclose that the mortgage servicer is representing the mortgagee under a servicing agreement with the mortgagee and the name of the mortgagee and: (2596)

(A) the address of the mortgagee; or (2597)

(B) the address of the mortgage servicer, if there is an agreement granting a mortgage servicer the authority to service the mortgage. (2598)

Added by Acts 2003, 78th Leg., ch. 554, Sec. 1, eff. Jan. 1, 2004. (2599)

Amended by: (2600)

Acts 2005, 79th Leg., Ch. 555 (H.B. 1235), Sec. 2, eff. September 1, 2005. (2601)

Sec. 51.003. DEFICIENCY JUDGMENT. (2602)(1-click HTML)

(a) If the price at which real property is sold at a foreclosure sale under Section 51.002 is less than the unpaid balance of the indebtedness secured by the real property, resulting in a deficiency, any action brought to recover the deficiency must be brought within two years of the foreclosure sale and is governed by this section. (2603)

(b) Any person against whom such a recovery is sought by motion may request that the court in which the action is pending determine the fair market value of the real property as of the date of the foreclosure sale. The fair market value shall be determined by the finder of fact after the introduction by the parties of competent evidence of the value. Competent evidence of value may include, but is not limited to, the following: (1) expert opinion testimony; (2) comparable sales; (3) anticipated marketing time and holding costs; (4) cost of sale; and (5) the necessity and amount of any discount to be applied to the future sales price or the cashflow generated by the property to arrive at a current fair market value. (2604)

(c) If the court determines that the fair market value is greater than the sale price of the real property at the foreclosure sale, the persons against whom recovery of the deficiency is sought are entitled to an offset against the deficiency in the amount by which the fair market value, less the amount of any claim, indebtedness, or obligation of any kind that is secured by a lien or encumbrance on the real property that was not extinguished by the foreclosure, exceeds the sale price. If no party requests the determination of fair market value or if such a request is made and no competent evidence of fair market value is introduced, the sale price at the foreclosure sale shall be used to compute the deficiency. (2605)

(d) Any money received by a lender from a private mortgage guaranty insurer shall be credited to the account of the borrower prior to the lender bringing an action at law for any deficiency owed by the borrower. Notwithstanding the foregoing, the credit required by this subsection shall not apply to the exercise by a private mortgage guaranty insurer of its subrogation rights against a borrower or other person liable for any deficiency. (2606)

Added by Acts 1991, 72nd Leg., ch. 12, Sec. 1, eff. April 1, 1991. (2607)

Sec. 51.004. JUDICIAL FORECLOSURE--DEFICIENCY. (2608)(1-click HTML)

(a) This section applies if: (2609)

(1) real property subject to a deed of trust or other contract lien is sold at a foreclosure sale under a court judgment foreclosing the lien and ordering the sale; and (2610)

(2) the price at which the real property is sold is less than the unpaid balance of the indebtedness secured by the real property, resulting in a deficiency. (2611)

(b) Any person obligated on the indebtedness, including a guarantor, may bring an action in the district court in the county in which the real property is located for a determination of the fair market value of the real property as of the date of the foreclosure sale. The suit must be brought not later than the 90th day after the date of the foreclosure sale unless the suit is brought by a guarantor who did not receive actual notice of the sale before the date of sale, in which case the suit must be brought by the guarantor not later than the 90th day after the date the guarantor received actual notice of the sale. The fair market value shall be determined by the finder of fact after the introduction by the parties of competent evidence of the value. Competent evidence of value may include: (2612)

(1) expert opinion testimony; (2613)

(2) comparable sales; (2614)

(3) anticipated marketing time and holding costs; (2615)

(4) cost of sale; and (2616)

(5) the necessity and amount of any discount to be applied to the future sales price or the cash flow generated by the property to arrive at a fair market value as of the date of the foreclosure sale. (2617)

(c) If the finder of fact determines that the fair market value is greater than the sale price of the real property at the foreclosure sale, the persons obligated on the indebtedness, including guarantors, are entitled to an offset against the deficiency in the amount by which the fair market value, less the amount of any claim, indebtedness, or obligation of any kind that is secured by a lien or encumbrance on the real property that was not extinguished by the foreclosure, exceeds the sale price. If no competent evidence of fair market value is introduced, the sale price at the foreclosure sale shall be used to compute the deficiency. (2618)

(d) Any money received by a lender from a private mortgage guaranty insurer shall be credited to the account of the borrower before the lender brings an action at law for any deficiency owed by the borrower. However, the credit required by this subsection does not apply to the exercise by a private mortgage guaranty insurer of its subrogation rights against a borrower or other person liable for any deficiency. (2619)

Added by Acts 1991, 72nd Leg., ch. 361, Sec. 1, eff. June 5, 1991. (2620)

Sec. 51.005. JUDICIAL OR NONJUDICIAL FORECLOSURE AFTER JUDGMENT AGAINST GUARANTOR--DEFICIENCY. (2621)(1-click HTML)

(a) This section applies if: (2622)

(1) the holder of a debt obtains a court judgment against a guarantor of the debt; (2623)

(2) real property subject to a deed of trust or other contract lien securing the guaranteed debt is sold at a foreclosure sale under Section 51.002 or under a court judgment foreclosing the lien and ordering the sale; (2624)

(3) the price at which the real property is sold is less than the unpaid balance of the indebtedness secured by the real property, resulting in a deficiency; and (2625)

(4) a motion or suit to determine the fair market value of the real property as of the date of the foreclosure sale has not been filed under Section 51.003 or 51.004. (2626)

(b) The guarantor may bring an action in the district court in the county in which the real property is located for a determination of the fair market value of the real property as of the date of the foreclosure sale. The suit must be brought not later than the 90th day after the date of the foreclosure sale or the date the guarantor receives actual notice of the foreclosure sale, whichever is later. The fair market value shall be determined by the finder of fact after the introduction by the parties of competent evidence of the value. Competent evidence of value may include: (2627)

(1) expert opinion testimony; (2628)

(2) comparable sales; (2629)

(3) anticipated marketing time and holding costs; (2630)

(4) cost of sale; and (2631)

(5) the necessity and amount of any discount to be applied to the future sales price or the cash flow generated by the property to arrive at a fair market value as of the date of the foreclosure sale. (2632)

(c) If the finder of fact determines that the fair market value is greater than the sale price of the real property at the foreclosure sale, the persons obligated on the indebtedness, including guarantors, are entitled to an offset against the deficiency in the amount by which the fair market value, less the amount of any claim, indebtedness, or obligation of any kind that is secured by a lien or encumbrance on the real property that was not extinguished by the foreclosure, exceeds the sale price. If no competent evidence of fair market value is introduced, the sale price at the foreclosure sale shall be used to compute the deficiency. (2633)

(d) Any money received by a lender from a private mortgage guaranty insurer shall be credited to the account of the borrower before the lender brings an action at law for any deficiency owed by the borrower. However, the credit required by this subsection does not apply to the exercise by a private mortgage guaranty insurer of its subrogation rights against a borrower or other person liable for any deficiency. (2634)

Added by Acts 1991, 72nd Leg., ch. 361, Sec. 1, eff. June 5, 1991. (2635)

Sec. 51.006. DEED-OF-TRUST FORECLOSURE AFTER DEED IN LIEU OF FORECLOSURE. (2636)(1-click HTML)

(a) This section applies to a holder of a debt under a deed of trust who accepts from the debtor a deed conveying real property subject to the deed of trust in satisfaction of the debt. (2637)

(b) The holder of a debt may void a deed conveying real property in satisfaction of the debt before the fourth anniversary of the date the deed is executed and foreclosed under the original deed of trust if: (2638)

(1) the debtor fails to disclose to the holder of the debt a lien or other encumbrance on the property before executing the deed conveying the property to the holder of the debt in satisfaction of the debt; and (2639)

(2) the holder of the debt has no personal knowledge of the undisclosed lien or encumbrance on the property. (2640)

(c) A third party may conclusively rely upon the affidavit of the holder of a debt stating that the holder has voided the deed as provided in this section. (2641)

(d) If the holder elects to void a deed in lieu of foreclosure as provided in this section, the priority of its deed of trust shall not be affected or impaired by the execution of the deed in lieu of foreclosure. (2642)

(e) If a holder accepts a deed in lieu of foreclosure, the holder may foreclose its deed of trust as provided in said deed of trust without electing to void the deed. The priority of such deed of trust shall not be affected or impaired by the deed in lieu of foreclosure. (2643)

Added by Acts 1995, 74th Leg., ch. 1020, Sec. 1, eff. Aug. 28, 1995. (2644)

Sec. 51.007. TRUSTEE UNDER DEED OF TRUST, CONTRACT LIEN OR SECURITY INSTRUMENT. (2645)(1-click HTML)

(a) The trustee named in a suit or proceeding may plead in the answer that the trustee is not a necessary party by a verified denial stating the basis for the trustee's reasonable belief that the trustee was named as a party solely in the capacity as a trustee under a deed of trust, contract lien, or security instrument. (2646)

(b) Within 30 days after the filing of the trustee's verified denial, a verified response is due from all parties to the suit or proceeding setting forth all matters, whether in law or fact, that rebut the trustee's verified denial. (2647)

(c) If a party has no objection or fails to file a timely verified response to the trustee's verified denial, the trustee shall be dismissed from the suit or proceeding without prejudice. (2648)

(d) If a respondent files a timely verified response to the trustee's verified denial, the matter shall be set for hearing. The court shall dismiss the trustee from the suit or proceeding without prejudice if the court determines that the trustee is not a necessary party. (2649)

(e) A dismissal of the trustee pursuant to Subsections (c) and (d) shall not prejudice a party's right to seek injunctive relief to prevent the trustee from proceeding with a foreclosure sale. (2650)

(f) A trustee shall not be liable for any good faith error resulting from reliance on any information in law or fact provided by the mortgagor or mortgagee or their respective attorney, agent, or representative or other third party. (2651)

Added by Acts 1999, 76th Leg., ch. 1304, Sec. 1, eff. Sept. 1, 1999. (2652)

Sec. 51.0074. DUTIES OF TRUSTEE. (2653)(1-click HTML)

(a) One or more persons may be authorized to exercise the power of sale under a security instrument. (2654)

(b) A trustee may not be: (2655)

(1) assigned a duty under a security instrument other than to exercise the power of sale in accordance with the terms of the security instrument; or (2656)

(2) held to the obligations of a fiduciary of the mortgagor or mortgagee. (2657)

Added by Acts 2007, 80th Leg., R.S., Ch. 903 (H.B. 2738), Sec. 3, eff. June 15, 2007. (2658)

Sec. 51.0075. AUTHORITY OF TRUSTEE OR SUBSTITUTE TRUSTEE. (2659)(1-click HTML)

(a) A trustee or substitute trustee may set reasonable conditions for conducting the public sale if the conditions are announced before bidding is opened for the first sale of the day held by the trustee or substitute trustee. (2660)

(b) A trustee or substitute trustee is not a debt collector. (2661)

(c) Notwithstanding any agreement to the contrary, a mortgagee may appoint or may authorize a mortgage servicer to appoint a substitute trustee or substitute trustees to succeed to all title, powers, and duties of the original trustee. A mortgagee or mortgage servicer may make an appointment or authorization under this subsection by power of attorney, corporate resolution, or other written instrument. (2662)

(d) A mortgage servicer may authorize an attorney to appoint a substitute trustee or substitute trustees on behalf of a mortgagee under Subsection (c). (2663)

(e) The name and a street address for a trustee or substitute trustees shall be disclosed on the notice required by Section 51.002(b). (2664)

(f) The purchase price in a sale held by a trustee or substitute trustee under this section is due and payable without delay on acceptance of the bid or within such reasonable time as may be agreed upon by the purchaser and the trustee or substitute trustee if the purchaser makes such request for additional time to deliver the purchase price. The trustee or substitute trustee shall disburse the proceeds of the sale as provided by law. (2665)

Added by Acts 2003, 78th Leg., ch. 554, Sec. 1, eff. Jan. 1, 2004. (2666)

Amended by: (2667)

Acts 2005, 79th Leg., Ch. 1231 (H.B. 1234), Sec. 1, eff. September 1, 2005. (2668)

Acts 2007, 80th Leg., R.S., Ch. 903 (H.B. 2738), Sec. 4, eff. June 15, 2007. (2669)

Acts 2009, 81st Leg., R.S., Ch. 323 (H.B. 655), Sec. 1, eff. September 1, 2009. (2670)

Sec. 51.0076. EFFECTIVE DATE OF APPOINTMENT. (2671)(1-click HTML)

The appointment or authorization of a trustee or substitute trustee made in a notice of sale is effective as of the date of the notice if the notice: (2672)

(1) complies with Sections 51.002 and 51.0075(e); (2673)

(2) is signed by an attorney or agent of the mortgagee or mortgage servicer; and (2674)

(3) contains a statement in all capital letters, boldface type, to read as follows: (2675)

THIS INSTRUMENT APPOINTS THE SUBSTITUTE TRUSTEE(S) IDENTIFIED TO SELL THE PROPERTY DESCRIBED IN THE SECURITY INSTRUMENT IDENTIFIED IN THIS NOTICE OF SALE THE PERSON SIGNING THIS NOTICE IS THE ATTORNEY OR AUTHORIZED AGENT OF THE MORTGAGEE OR MORTGAGE SERVICER. (2676)

Added by Acts 2015, 84th Leg., R.S., Ch. 653 (H.B. 2063), Sec. 2, eff. September 1, 2015. (2677)

Sec. 51.008. CERTAIN LIENS ON REAL PROPERTY. (2678)(1-click HTML)

(a) A lien on real property created under this code or another law of this state in favor of a governmental entity must be recorded as provided by Chapters 11 and 12 in the real property records of the county in which the property or a portion of the property is located unless: (2679)

(1) the lien is imposed as a result of failure to pay: (2680)

(A) ad valorem taxes; or (2681)

(B) a penalty or interest owed in connection with those taxes; or (2682)

(2) the law establishing the lien expressly states that recording the lien is not required. (2683)

(b) Any notice of the lien required by law must contain a legal description of the property. (2684)

(c) This section does not apply to: (2685)

(1) a lien created under Section 89.083, Natural Resources Code; (2686)

(2) a state tax lien under Chapter 113, Tax Code; or (2687)

(3) a lien established under Chapter 61 or 213, Labor Code. (2688)

Added by Acts 2001, 77th Leg., ch. 827, Sec. 1, eff. Sept. 1, 2001. (2689)

Sec. 51.009. FORECLOSED PROPERTY SOLD "AS IS". (2690)(1-click HTML)

A purchaser at a sale of real property under Section 51.002: (2691)

(1) acquires the foreclosed property "as is" without any expressed or implied warranties, except as to warranties of title, and at the purchaser's own risk; and (2692)

(2) is not a consumer. (2693)

Added by Acts 2003, 78th Leg., ch. 554, Sec. 1, eff. Jan. 1, 2004. (2694)

Sec. 51.015. SALE OF CERTAIN PROPERTY OWNED BY MEMBER OF THE MILITARY. (2695)(1-click HTML)

(a) In this section: (2696)

(1) "Active duty military service" means: (2697)

(A) service as a member of the armed forces of the United States; and (2698)

(B) with respect to a member of the Texas National Guard or the National Guard of another state or a member of a reserve component of the armed forces of the United States, active duty under an order of the president of the United States. (2699)

(2) "Dwelling" means a residential structure or manufactured home that contains one to four family housing units. (2700)

(3) "Military servicemember" means: (2701)

(A) a member of the armed forces of the United States; (2702)

(B) a member of the Texas National Guard or the National Guard of another state serving on active duty under an order of the president of the United States; or (2703)

(C) a member of a reserve component of the armed forces of the United States who is on active duty under an order of the president of the United States. (2704)

(4) "Person" has the meaning assigned by Section 311.005, Government Code. (2705)

(1-a) "Assessment" and "assessments" have the meanings assigned by Sections 82.113(a) and 209.002, as applicable. (2706)

(b) This section applies only to an obligation: (2707)

(1) that is secured by a mortgage, deed of trust, or other contract lien, including a lien securing payment of an assessment or assessments, as applicable, on real property or personal property that is a dwelling owned by a military servicemember; (2708)

(2) that originates before the date on which the servicemember's active duty military service commences; and (2709)

(3) for which the servicemember is still obligated. (2710)

(c) In an action filed during a military servicemember's period of active duty military service or during the nine months after the date on which that service period concludes to foreclose a lien or otherwise enforce an obligation described by Subsection (b), the court may after a hearing and on the court's own motion, and shall on the application by a servicemember whose ability to comply with the obligations of the contract secured by the lien is materially affected by the servicemember's military service: (2711)

(1) stay the proceedings for a period of time as justice and equity require; or (2712)

(2) adjust the obligations of the contract secured by the lien to preserve the interests of all parties. (2713)

(d) A sale, foreclosure, or seizure of property under a mortgage, deed of trust, or other contract lien described by Subsection (b) may not be conducted during the military servicemember's period of active duty military service or during the nine months after the date on which that service period concludes unless the sale, foreclosure, or seizure is conducted under: (2714)

(1) a court order issued before the sale, foreclosure, or seizure; or (2715)

(2) an agreement that complies with Subsection (e). (2716)

(e) A military servicemember may waive the servicemember's rights under this section only as provided by this subsection. The waiver must be: (2717)

(1) in writing in at least 12-point type; (2718)

(2) executed as an instrument separate from the obligation to which the waiver applies; and (2719)

(3) made under a written agreement: (2720)

(A) executed during or after the servicemember's period of active duty military service; and (2721)

(B) specifying the legal instrument to which the waiver applies and, if the servicemember is not a party to the instrument, the servicemember concerned. (2722)

(f) A person commits an offense if the person knowingly makes or causes to be made a sale, foreclosure, or seizure of property that is prohibited by Subsection (d). An offense under this subsection is a Class A misdemeanor. (2723)

(g) On application to a court, a dependent of a military servicemember is entitled to the protections of this section if the dependent's ability to comply with an obligation that is secured by a mortgage, deed of trust, or other contract lien on real property or personal property that is a dwelling is materially affected by the servicemember's military service. (2724)

(h) A court that issues a stay or takes any other action under this section regarding the enforcement of an obligation that is subject to this section may grant a similar stay or take similar action with respect to a surety, guarantor, endorser, accommodation maker, comaker, or other person who is or may be primarily or secondarily subject to the obligation. (2725)

(i) If a judgment or decree is vacated or set aside wholly or partly under this section, the court may also set aside or vacate, as applicable, the judgment or decree with respect to a surety, guarantor, endorser, accommodation maker, comaker, or other person who is or may be primarily or secondarily subject to the obligation that is subject to the judgment or decree. (2726)

(j) This section does not prevent a waiver in writing by a surety, guarantor, endorser, accommodation maker, comaker, or other person, whether primarily or secondarily liable on an obligation, of the protections provided under Subsections (h) and (i). A waiver described by this subsection is effective only if it is executed as an instrument separate from the obligation with respect to which it applies. If a waiver under this subsection is executed by an individual who after the execution of the waiver enters active duty military service, or by a dependent of an individual who after the execution of the waiver enters active duty military service, the waiver is not valid after the beginning of the period of the active duty military service unless the waiver was executed by the individual or dependent during the applicable period described by 50 U.S.C. App. Section 516, as that section existed on January 1, 2009. (2727)

Added by Acts 2009, 81st Leg., R.S., Ch. 992 (H.B. 3857), Sec. 1, eff. June 19, 2009. (2728)

Amended by: (2729)

Acts 2011, 82nd Leg., R.S., Ch. 592 (S.B. 101), Sec. 2, eff. September 1, 2011. (2730)

Acts 2011, 82nd Leg., R.S., Ch. 592 (S.B. 101), Sec. 3, eff. September 1, 2011. (2731)

Sec. 51.016. RESCISSION OF NONJUDICIAL FORECLOSURE SALES. (2732)(1-click HTML)

(a) This section applies only to a nonjudicial foreclosure sale of residential real property conducted under Section 51.002. In this subsection, "residential real property" means: (2733)

(1) a single family home, duplex, triplex, or quadraplex; or (2734)

(2) a unit in a multiunit residential structure in which title to an individual unit is transferred to the owner of the unit under a condominium or cooperative system. (2735)

(b) Not later than the 15th calendar day after the date of a foreclosure sale, a mortgagee, trustee, or substitute trustee may rescind the sale under this section if: (2736)

(1) the statutory requirements for the sale were not satisfied; (2737)

(2) the default leading to the sale was cured before the sale; (2738)

(3) a receivership or dependent probate administration involving the property was pending at the time of sale; (2739)

(4) a condition specified in the conditions of sale prescribed by the trustee or substitute trustee before the sale and made available in writing to prospective bidders at the sale was not met; (2740)

(5) the mortgagee or mortgage servicer and the debtor agreed before the sale to cancel the sale based on an enforceable written agreement by the debtor to cure the default; or (2741)

(6) at the time of the sale, a court-ordered or automatic stay of the sale imposed in a bankruptcy case filed by a person with an interest in the property was in effect. (2742)

(c) On or before the 15th calendar day after the date of the sale, the party rescinding the sale shall: (2743)

(1) serve a written notice of rescission that describes the reason for the rescission and includes recording information for any affected trustee's or substitute trustee's deed that was recorded on: (2744)

(A) the purchaser, if the mortgagee is not the purchaser; and (2745)

(B) each debtor who, according to the records of the mortgage servicer of the debt, is obligated to pay the debt; and (2746)

(2) file each notice for recording in the real property records of the county in which all or a part of the property is located. (2747)

(d) A notice required by Subsection (c) must be served by certified mail. Service of the notice is complete when the notice is deposited in the United States mail, postage prepaid and addressed to the purchaser or debtor, as applicable, at the purchaser's or debtor's last known address, as applicable. The affidavit of a person knowledgeable of the facts to the effect that service was completed is prima facie evidence of service. (2748)

(e) Not later than the fifth calendar day after the date a foreclosure sale is rescinded under this section, the mortgagee shall return to the purchaser by certified mail, electronic or wire transfer, or courier service with delivery tracking the amount of the bid paid by the purchaser for the property at the sale. The debtor shall return to the trustee the amount of any excess proceeds received by the debtor from the sale. The return of the bid amount is considered made on the date: (2749)

(1) the bid amount is deposited postage prepaid in the United States mail or with the courier service addressed to the purchaser at the purchaser's last known address; or (2750)

(2) the electronic or wire transfer is ordered. (2751)

(f) The rescinding mortgagee, trustee, or substitute trustee shall cause to be filed for recording in the real property records of the county where the notice required under Subsection (c) was recorded an affidavit stating the date the bid amount was returned together with the certified mail, electronic or wire transfer, or courier service delivery tracking information. (2752)

(g) An affidavit executed and filed in accordance with Subsection (f) is prima facie evidence of the return of the bid amount and of the authority of the maker of the affidavit. A bona fide purchaser, lender, or other person acquiring an interest in the property or an insurer of title is entitled to rely conclusively on the record of the filed affidavit and notice, and any subsequent purchaser in good faith and for value is entitled to bona fide purchaser protection. (2753)

(h) The rescission of a foreclosure sale under this section restores the mortgagee and the debtor to their respective title, rights, and obligations under any instrument relating to the foreclosed property that existed immediately prior to the sale. (2754)

(i) A rescission of a foreclosure sale under this section is void as to a creditor or to a subsequent purchaser for a valuable consideration without notice unless notice of the rescission has been acknowledged, sworn to, or proved and filed for recording as required by law. A rescission of a foreclosure sale under this section evidenced by an unrecorded instrument is binding on a party to the instrument, on the party's heirs, and on a subsequent purchaser who does not pay a valuable consideration or who has notice of the instrument. (2755)

(j) No action challenging the effectiveness of a rescission under this section may be commenced unless the action is filed on or before the 30th calendar day after the date the notices of rescission required by Subsection (c) are filed for recording. A lis pendens notice based on the rescission not recorded within that period has no effect. This subsection does not affect the limitations period for an action claiming damages resulting from the rescission. (2756)

(k) If the foreclosure sale is rescinded under this section for a reason listed in Subsection (b), other than a stay described by Subsection (b)(6), the court in a civil action filed by the purchaser challenging the effectiveness of the rescission or claiming damages resulting from the rescission may only award as damages to the purchaser the amount of the bid paid for the property by the purchaser at the sale that has not been refunded to the purchaser, plus interest on that amount at the rate of 10 percent per year. Notwithstanding any other law, the court may not order specific performance of the sale as a remedy for the purchaser. Interest awarded under this subsection ceases to accrue on the fourth day after the date the mortgagee deposits the amount of the damages awarded in the United States mail or with a courier for delivery to the purchaser. (2757)

(l) If a foreclosure sale is rescinded under this section for a reason provided by Subsection (b)(6), the court in a civil action filed by the purchaser challenging the effectiveness of the rescission or claiming damages resulting from the rescission may only award as damages to the purchaser the amount of the bid paid for the property by the purchaser at the sale that has not been refunded to the purchaser. (2758)

(m) Nothing in this section prohibits the rescission of a sale by agreement of the affected parties on other terms or a suit to rescind a sale not rescinded under this section. (2759)

Added by Acts 2015, 84th Leg., R.S., Ch. 551 (H.B. 2066), Sec. 1, eff. September 1, 2015. (2760)

CHAPTER 52. JUDGMENT LIEN (2761)(1-click HTML)
Sec. 52.001. ESTABLISHMENT OF LIEN. (2762)(1-click HTML)

Except as provided by Section 52.0011 or 52.0012, a first or subsequent abstract of judgment, when it is recorded and indexed in accordance with this chapter, if the judgment is not then dormant, constitutes a lien on and attaches to any real property of the defendant, other than real property exempt from seizure or forced sale under Chapter 41, the Texas Constitution, or any other law, that is located in the county in which the abstract is recorded and indexed, including real property acquired after such recording and indexing. (2763)

Acts 1983, 68th Leg., p. 3526, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 1178, Sec. 2, eff. Sept. 1, 1989; Acts 1993, 73rd Leg., ch. 48, Sec. 6, eff. Sept. 1, 1993. (2764)

Amended by: (2765)

Acts 2007, 80th Leg., R.S., Ch. 374 (S.B. 512), Sec. 1, eff. September 1, 2007. (2766)

Sec. 52.0011. ESTABLISHMENT OF LIEN PENDING APPEAL OF JUDGMENT. (2767)(1-click HTML)

(a) A first or subsequent abstract of a judgment rendered by a court against a defendant, when it is recorded and indexed under this chapter, does not constitute a lien on the real property of the defendant if: (2768)

(1) the defendant has posted security as provided by law or is excused by law from posting security; and (2769)

(2) the court finds that the creation of the lien would not substantially increase the degree to which a judgment creditor's recovery under the judgment would be secured when balanced against the costs to the defendant after the exhaustion of all appellate remedies. A certified copy of the finding of the court must be recorded in the real property records in each county in which the abstract of judgment or a certified copy of the judgment is filed in the abstract of judgment records. (2770)

(b) The court may withdraw its finding under Subsection (a)(2) at any time the court determines, from evidence presented to it, that the finding should be withdrawn. The lien exists on withdrawal of the finding and on the filing of a certified copy of the withdrawal of the finding of the court in the real property records in each county in which the abstract of judgment or a certified copy of the judgment is filed in the abstract of judgment records. (2771)

Added by Acts 1989, 71st Leg., ch. 1178, Sec. 3, eff. Sept. 1, 1989. (2772)

Sec. 52.0012. RELEASE OF RECORD OF LIEN ON HOMESTEAD PROPERTY. (2773)(1-click HTML)

(a) In this section: (2774)

(1) "Homestead" has the meaning assigned by Section 41.002. (2775)

(2) "Judgment debtor" and "judgment creditor" have the meanings assigned by Section 31.008(h), Civil Practice and Remedies Code. (2776)

(b) A judgment debtor may, at any time, file an affidavit in the real property records of the county in which the judgment debtor's homestead is located that substantially complies with Subsection (f). (2777)

(c) Subject to Subsection (d) and except as provided by Subsection (e), an affidavit filed under Subsection (b) serves as a release of record of a judgment lien established under this chapter. (2778)

(d) A bona fide purchaser or a mortgagee for value or a successor or assign of a bona fide purchaser or mortgagee for value may rely conclusively on an affidavit filed under Subsection (b) if included with the affidavit is evidence that: (2779)

(1) the judgment debtor sent a letter and a copy of the affidavit, without attachments and before execution of the affidavit, notifying the judgment creditor of the affidavit and the judgment debtor's intent to file the affidavit; and (2780)

(2) the letter and the affidavit were sent by registered or certified mail, return receipt requested, 30 or more days before the affidavit was filed to: (2781)

(A) the judgment creditor's last known address; (2782)

(B) the address appearing in the judgment creditor's pleadings in the action in which the judgment was rendered or another court record, if that address is different from the judgment creditor's last known address; (2783)

(C) the address of the judgment creditor's last known attorney as shown in those pleadings or another court record; and (2784)

(D) the address of the judgment creditor's last known attorney as shown in the records of the State Bar of Texas, if that address is different from the address of the attorney as shown in those pleadings or another court record. (2785)

(e) An affidavit filed under Subsection (b) does not serve as release of record of a judgment lien established under this chapter with respect to a purchaser or mortgagee of real property that acquires the purchaser's or mortgagee's interest from the judgment debtor after the judgment creditor files a contradicting affidavit in the real property records of the county in which the real property is located asserting that: (2786)

(1) the affidavit filed by the judgment debtor under Subsection (b) is untrue; or (2787)

(2) another reason exists as to why the judgment lien attaches to the judgment debtor's property. (2788)

(f) An affidavit filed under Subsection (b) must be in substantially the following form: (2789)

HOMESTEAD AFFIDAVIT AS RELEASE OF JUDGMENT LIEN (2790)

Before me, the undersigned authority, on this day personally appeared __________ ("Affiant(s)") (insert name of one or more affiants) who, being first duly sworn, upon oath states: (2791)

(1) My/our name is/are __________ (insert name of Affiant(s)). I/we own the following described land ("Land"): (2792)

(describe the property claimed as homestead) (2793)

(2) This affidavit is made for the purpose of effecting a release of that judgment lien recorded in __________ (refer to recording information of judgment lien) ("Judgment Lien") as to the Land. (2794)

(3) The Land includes as its purpose use for a home for Affiant(s) and is the homestead of Affiant(s), as homestead is defined in Section 41.002, Property Code. The Land does not exceed: (2795)

(A) 10 acres of land, if used for the purposes of an urban home or as both an urban home and a place to exercise a calling or business; or (2796)

(B) 200 acres for a family or 100 acres for a single, adult person not otherwise entitled to a homestead, if used for the purposes of a rural home. (2797)

(4) Attached to this affidavit is evidence that: (2798)

(A) Affiant(s) sent a letter and a copy of this affidavit, without attachments and before execution of the affidavit, notifying the judgment creditor in the Judgment Lien of this affidavit and the Affiant(s)' intent to file for record this affidavit; and (2799)

(B) the letter and this affidavit were sent by registered or certified mail, return receipt requested, 30 or more days before this affidavit was filed to: (2800)

(i) the judgment creditor's last known address; (2801)

(ii) the address appearing in the judgment creditor's pleadings in the action in which the judgment was rendered or another court record, if that address is different from the judgment creditor's last known address; (2802)

(iii) the address of the judgment creditor's last known attorney as shown in those pleadings or another court record; and (2803)

(iv) the address of the judgment creditor's last known attorney as shown in the records of the State Bar of Texas, if that address is different from the address of the attorney as shown in those pleadings or another court record. (2804)

(5) This affidavit serves as a release of the Judgment Lien as to the Land in accordance with Section 52.0012, Property Code. (2805)

Signed on this _____ day of __________, _____. (2806)

____________________ (2807)

____________________ (2808)

(Signature of Affiant(s)) (2809)

State of __________ (2810)

County of __________ (2811)

SWORN TO AND SUBSCRIBED before me on the _________ day of __________, 20___. (2812)

My commission expires: (2813)

______________________ (2814)

_______________________________ (2815)

Notary Public, State of Texas (2816)

Notary's printed name: (2817)

________________________________ (2818)

Added by Acts 2007, 80th Leg., R.S., Ch. 374 (S.B. 512), Sec. 2, eff. September 1, 2007. (2819)

Sec. 52.002. ISSUANCE OF ABSTRACT. (2820)(1-click HTML)

(a) On application of a person in whose favor a judgment is rendered or on application of that person's agent, attorney, or assignee, the judge or justice of the peace who rendered the judgment or the clerk of the court in which the judgment is rendered shall prepare, certify, and deliver to the applicant an abstract of the judgment. The applicant for the abstract must pay the fee authorized by law for providing the abstract. (2821)

(b) The attorney of a person in whose favor a judgment is rendered in a small claims court or a justice court or a person in whose favor a judgment is rendered in a court other than a small claims court or a justice court or that person's agent, attorney, or assignee may prepare the abstract of judgment. An abstract of judgment prepared under this subsection must be verified by the person preparing the abstract. (2822)

Acts 1983, 68th Leg., p. 3527, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1987, 70th Leg., ch. 663, Sec. 2, eff. Sept. 1, 1987; Acts 1999, 76th Leg., ch. 176, Sec. 1, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 668, Sec. 2, eff. Sept. 1, 2001. (2823)

Sec. 52.003. CONTENTS OF ABSTRACT. (2824)(1-click HTML)

(a) An abstract of a judgment must show: (2825)

(1) the names of the plaintiff and defendant; (2826)

(2) the birthdate of the defendant, if available to the clerk or justice; (2827)

(3) the last three numbers of the driver's license of the defendant, if available; (2828)

(4) the last three numbers of the social security number of the defendant, if available; (2829)

(5) the number of the suit in which the judgment was rendered; (2830)

(6) the defendant's address, or if the address is not shown in the suit, the nature of citation and the date and place of service of citation; (2831)

(7) the date on which the judgment was rendered; (2832)

(8) the amount for which the judgment was rendered and the balance due; (2833)

(9) the amount of the balance due, if any, for child support arrearage; and (2834)

(10) the rate of interest specified in the judgment. (2835)

(b) An abstract of a judgment may show a mailing address for each plaintiff or judgment creditor. (2836)

Acts 1983, 68th Leg., p. 3527, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1991, 72nd Leg., 1st C.S., ch. 15, Sec. 4.08, eff. Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 134, Sec. 2, eff. May 12, 1993. (2837)

Amended by: (2838)

Acts 2007, 80th Leg., R.S., Ch. 143 (S.B. 699), Sec. 2, eff. September 1, 2007. (2839)

Sec. 52.004. RECORDING AND INDEXING OF ABSTRACT. (2840)(1-click HTML)

(a) The county clerk shall immediately record in the county real property records each properly authenticated abstract of judgment that is presented for recording. The clerk shall note in the records the date and hour an abstract of judgment is received. (2841)

(b) At the same time an abstract is recorded, the county clerk shall enter the abstract on the alphabetical index to the real property records, showing: (2842)

(1) the name of each plaintiff in the judgment; (2843)

(2) the name of each defendant in the judgment; and (2844)

(3) the volume and page or instrument number in the records in which the abstract is recorded. (2845)

Acts 1983, 68th Leg., p. 3527, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 2001, 77th Leg., ch. 668, Sec. 2, eff. Sept. 1, 2001. (2846)

Sec. 52.0041. ADDRESS REQUIREMENT FOR RECORDING ABSTRACT. (2847)(1-click HTML)

(a) A judgment abstracted after September 1, 1993, may not be recorded unless: (2848)

(1) a mailing address for each plaintiff or judgment creditor appears on the abstract of judgment; or (2849)

(2) a penalty filing fee equal to the greater of $25 or twice the statutory recording fee for the abstract is paid. (2850)

(b) The validity of an abstracted judgment as between the parties is not affected by a failure to include an address for each plaintiff or judgment creditor in the abstracted judgment. (2851)

(c) Payment of a filing fee and acceptance of the abstract of judgment by a county clerk for recording creates a conclusive presumption that the requirements of this section have been met. (2852)

Added by Acts 1993, 73rd Leg., ch. 134, Sec. 1, eff. May 12, 1993. (2853)

Sec. 52.005. SATISFACTION OF JUDGMENT. (2854)(1-click HTML)

Satisfaction of a judgment in whole or in part may be shown by recordation of: (2855)

(1) a return on an execution issued on the judgment, or a copy of the return, certified by the officer making the return and showing: (2856)

(A) the names of the parties to the judgment; (2857)

(B) the number and style of the suit; (2858)

(C) the court in which the judgment was rendered; (2859)

(D) the date and amount of the judgment; and (2860)

(E) the dates of issuance and return of the execution; or (2861)

(2) a receipt, acknowledgement, or release that is signed by the party entitled to receive payment of the judgment or by that person's agent or attorney of record and that is acknowledged or proven for record in the manner required for deeds. (2862)

Acts 1983, 68th Leg., p. 3528, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 2001, 77th Leg., ch. 668, Sec. 2, eff. Sept. 1, 2001. (2863)

Sec. 52.006. DURATION OF LIEN. (2864)(1-click HTML)

(a) Except as provided by Subsection (b), a judgment lien continues for 10 years following the date of recording and indexing the abstract, except that if the judgment becomes dormant during that period the lien ceases to exist. (2865)

(b) Notwithstanding Section 34.001, Civil Practice and Remedies Code, a judgment in favor of the state or a state agency, as that term is defined by Section 403.055, Government Code, does not become dormant. A properly filed abstract of the judgment continues to constitute a lien under Section 52.001 until the earlier of the 20th anniversary of the date the abstract is recorded and indexed or the date the judgment is satisfied or the lien is released. The judgment lien may be renewed for one additional 20-year period by filing, before the expiration of the initial 20-year period, a renewed abstract of judgment in the same manner as the original abstract of judgment is filed. The renewed judgment lien relates back to the date the original abstract of judgment was filed. (2866)

Acts 1983, 68th Leg., p. 3528, ch. 576, Sec. 1, eff. Jan. 1, 1984. (2867)

Amended by: (2868)

Acts 2007, 80th Leg., R.S., Ch. 11 (S.B. 300), Sec. 1, eff. April 23, 2007. (2869)

Sec. 52.007. FEDERAL COURT JUDGMENT. (2870)(1-click HTML)

An abstract of a judgment rendered in this state by a federal court may be recorded and indexed under this chapter on the certificate of the clerk of the court. (2871)

Acts 1983, 68th Leg., p. 3528, ch. 576, Sec. 1, eff. Jan. 1, 1984. (2872)

SUBCHAPTER B. CANCELLATION OF JUDGMENTS AND JUDGMENT LIENS AGAINST BANKRUPTS--ABSTRACT RECORDED BEFORE SEPTEMBER 1, 1993 (2873)(1-click HTML)
Sec. 52.021. DISCHARGE AND CANCELLATION. (2874)(1-click HTML)

(a) In accordance with this subchapter, a judgment and judgment lien may be discharged and canceled if the person against whom the judgment was rendered is discharged from his debts under federal bankruptcy law. (2875)

(b) This subchapter applies to judgments against persons whose debts are discharged in bankruptcy and for which the abstracts of judgment are recorded before September 1, 1993, as provided by Subchapter A, regardless of the fact that the discharge in bankruptcy occurred before this law took effect. (2876)

Acts 1983, 68th Leg., p. 3529, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1993, 73rd Leg., ch. 313, Sec. 2, eff. Sept. 1, 1993. (2877)

Sec. 52.022. APPLICATION FOR COURT ORDER. (2878)(1-click HTML)

(a) The person who has been discharged from his debts, that person's receiver or trustee, or any other interested person may apply, on proof of the discharge, to the court in which the judgment was rendered for an order discharging and canceling the judgment and judgment lien. (2879)

(b) A person may not apply for the order before a year has elapsed since the bankruptcy discharge. (2880)

Acts 1983, 68th Leg., p. 3529, ch. 576, Sec. 1, eff. Jan. 1, 1984. (2881)

Sec. 52.023. NOTICE OF APPLICATION. (2882)(1-click HTML)

(a) Notice of the application for the order and copies of the papers on which application is made must be served on the judgment creditor or his attorney of record in the action in which the judgment was rendered. (2883)

(b) If the residence or place of business of the judgment creditor or his attorney is known, notice must be served in the manner prescribed for service of notice in an action. (2884)

(c) As an alternative to service under Subsection (b), the court may order that notice of the application be published in a newspaper designated in the order once a week for not more than three consecutive weeks if the applicant proves by affidavit that: (2885)

(1) the address of neither the judgment creditor nor his attorney is known and the address of neither can be ascertained by due diligence; or (2886)

(2) the judgment creditor is not a resident of this state and his attorney is dead, removed from the state, or unknown. (2887)

Acts 1983, 68th Leg., p. 3529, ch. 576, Sec. 1, eff. Jan. 1, 1984. (2888)

Sec. 52.024. COURT ORDER. (2889)(1-click HTML)

(a) The court shall conduct a hearing on the application and shall enter an order of discharge and cancellation of the judgment and any abstracts of the judgment if the debtor or bankrupt has been discharged in bankruptcy from the payment of the obligation or debt represented by the judgment. (2890)

(b) In each county in which the court's order is recorded in the judgment lien records, the order constitutes a release, discharge, and cancellation of the judgment and of any unsatisfied judgment lien represented by an abstract that is of record in the county on the date of the order or is recorded in the county on or after the date of the order. (2891)

Acts 1983, 68th Leg., p. 3530, ch. 576, Sec. 1, eff. Jan. 1, 1984. (2892)

Sec. 52.025. EFFECT ON LIEN OF DISCHARGE OF DEBT IN BANKRUPTCY. (2893)(1-click HTML)

(a) A judgment lien is not affected by the order of discharge and cancellation and may be enforced, if the lien is against real property owned by the bankrupt or debtor before the debtor was adjudged bankrupt or a petition for debtor relief was filed under federal bankruptcy law, and: (2894)

(1) the debt or obligation evidenced by the judgment is not discharged in bankruptcy; or (2895)

(2) the property is nonexempt and is abandoned during the course of the proceeding. (2896)

(b) Except as provided by Subsection (a), the judgment is of no force or validity and may not be a lien on real property acquired by the bankrupt or debtor after the discharge in bankruptcy. (2897)

Acts 1983, 68th Leg., p. 3530, ch. 576, Sec. 1, eff. Jan. 1, 1984. (2898)

SUBCHAPTER C. CANCELLATION OF JUDGMENTS AND JUDGMENT LIENS AGAINST DEBTORS--ABSTRACT RECORDED ON OR AFTER SEPTEMBER 1, 1993 (2899)(1-click HTML)
Sec. 52.041. APPLICATION OF SUBCHAPTER. (2900)(1-click HTML)

This subchapter applies to a judgment and judgment lien for which an abstract of judgment or judgment lien is recorded on or after September 1, 1993. (2901)

Added by Acts 1993, 73rd Leg., ch. 313, Sec. 3, eff. Sept. 1, 1993. (2902)

Sec. 52.042. DISCHARGE AND CANCELLATION. (2903)(1-click HTML)

(a) A judgment is discharged and any abstract of judgment or judgment lien is canceled and released without further action in any court and may not be enforced if: (2904)

(1) the lien is against real property owned by the debtor before a petition for debtor relief was filed under federal bankruptcy law; and (2905)

(2) the debt or obligation evidenced by the judgment is discharged in the bankruptcy. (2906)

(b) A judgment evidencing a debt or obligation discharged in bankruptcy does not have force or validity and may not be a lien on real property acquired by the debtor after the petition for debtor relief was filed. (2907)

Added by Acts 1993, 73rd Leg., ch. 313, Sec. 3, eff. Sept. 1, 1993. (2908)

Sec. 52.043. EXCEPTIONS TO DISCHARGE AND CANCELLATION. (2909)(1-click HTML)

A judgment lien is not affected by this subchapter and may be enforced if the lien is against real property owned by the debtor before a petition for debtor relief was filed under federal bankruptcy law and: (2910)

(1) the debt or obligation evidenced by the judgment is not discharged in bankruptcy; or (2911)

(2) the property is not exempted in the bankruptcy and is abandoned during the bankruptcy. (2912)

Added by Acts 1993, 73rd Leg., ch. 313, Sec. 3, eff. Sept. 1, 1993. (2913)

CHAPTER 53. MECHANIC'S, CONTRACTOR'S, OR MATERIALMAN'S LIEN (2914)(1-click HTML)
Sec. 53.001. DEFINITIONS. (2915)(1-click HTML)

In this chapter: (2916)

(1) "Contract price" means the cost to the owner for any part of construction or repair performed under an original contract. (2917)

(2) "Improvement" includes: (2918)

(A) abutting sidewalks and streets and utilities in or on those sidewalks and streets; (2919)

(B) clearing, grubbing, draining, or fencing of land; (2920)

(C) wells, cisterns, tanks, reservoirs, or artificial lakes or pools made for supplying or storing water; (2921)

(D) pumps, siphons, and windmills or other machinery or apparatuses used for raising water for stock, domestic use, or irrigation; and (2922)

(E) planting orchard trees, grubbing out orchards and replacing trees, and pruning of orchard trees. (2923)

(3) "Labor" means labor used in the direct prosecution of the work. (2924)

(4) "Material" means all or part of: (2925)

(A) the material, machinery, fixtures, or tools incorporated into the work, consumed in the direct prosecution of the work, or ordered and delivered for incorporation or consumption; (2926)

(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 prosecution of the work at the site of the construction or repair; or (2927)

(C) power, water, fuel, and lubricants consumed or ordered and delivered for consumption in the direct prosecution of the work. (2928)

(5) "Mechanic's lien" means the lien provided by this chapter. (2929)

(6) "Original contract" means an agreement to which an owner is a party either directly or by implication of law. (2930)

(7) "Original contractor" means a person contracting with an owner either directly or through the owner's agent. (2931)

(8) "Residence" means a single-family house, duplex, triplex, or quadruplex or a unit in a multiunit structure used for residential purposes that is: (2932)

(A) owned by one or more adult persons; and (2933)

(B) used or intended to be used as a dwelling by one of the owners. (2934)

(9) "Residential construction contract" means a contract between an owner and a contractor in which the contractor agrees to construct or repair the owner's residence, including improvements appurtenant to the residence. (2935)

(10) "Residential construction project" means a project for the construction or repair of a new or existing residence, including improvements appurtenant to the residence, as provided by a residential construction contract. (2936)

(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. (2937)

(12) "Specially fabricated material" means material fabricated for use as a component of the construction or repair so as to be reasonably unsuitable for use elsewhere. (2938)

(13) "Subcontractor" means a person who has furnished labor or materials to fulfill an obligation to an original contractor or to a subcontractor to perform all or part of the work required by an original contract. (2939)

(14) "Work" means any part of construction or repair performed under an original contract. (2940)

(15) "Completion" of an original contract means the actual completion of the work, including any extras or change orders reasonably required or contemplated under the original contract, other than warranty work or replacement or repair of the work performed under the contract. (2941)

Acts 1983, 68th Leg., p. 3533, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1997, 75th Leg., ch. 526, Sec. 2, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 889, Sec. 1, eff. Sept. 1, 1999. (2942)

Sec. 53.002. MORE THAN ONE ORIGINAL CONTRACTOR. (2943)(1-click HTML)

On any work there may be more than one original contractor for purposes of this chapter. (2944)

Acts 1983, 68th Leg., p. 3535, ch. 576, Sec. 1, eff. Jan. 1, 1984. (2945)

Sec. 53.003. NOTICES. (2946)(1-click HTML)

(a) This section applies to notices required by Subchapters B through G and K. (2947)

(b) Any notice or other written communication may be delivered in person to the party entitled to the notice or to that party's agent, regardless of the manner prescribed by law. (2948)

(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. (2949)

(d) If a written notice is received by the person entitled to receive it, the method by which the notice was delivered is immaterial. (2950)

Acts 1983, 68th Leg., p. 3535, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1997, 75th Leg., ch. 526, Sec. 3, eff. Sept. 1, 1997. (2951)

SUBCHAPTER B. PERSONS ENTITLED TO LIEN; SUBJECT PROPERTY (2952)(1-click HTML)
Sec. 53.021. PERSONS ENTITLED TO LIEN. (2953)(1-click HTML)

(a) A person has a lien if: (2954)

(1) the person labors, specially fabricates material, or furnishes labor or materials for construction or repair in this state of: (2955)

(A) a house, building, or improvement; (2956)

(B) a levee or embankment to be erected for the reclamation of overflow land along a river or creek; or (2957)

(C) a railroad; and (2958)

(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. (2959)

(b) A person who specially fabricates material has a lien even if the material is not delivered. (2960)

(c) An architect, engineer, or surveyor who prepares a plan or plat 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. (2961)

(d) A person who provides labor, plant material, or other supplies for the installation of landscaping for a house, building, or improvement, including the construction of a retention pond, retaining wall, berm, irrigation system, fountain, or other similar installation, 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. (2962)

(e) A person who performs labor as part of, or who furnishes labor or materials for, the demolition of 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. (2963)

Acts 1983, 68th Leg., p. 3535, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 395, Sec. 1, eff. Sept. 1, 1989; Acts 1989, 71st Leg., ch. 1138, Sec. 1, eff. Sept. 1, 1989; Acts 1991, 72nd Leg., ch. 16, Sec. 16.01, eff. Aug. 26, 1991; Acts 1995, 74th Leg., ch. 851, Sec. 1, 6, eff. Sept. 1, 1995; Acts 1999, 76th Leg., ch. 896, Sec. 1, eff. Sept. 1, 1999; Acts 2003, 78th Leg., ch. 410, Sec. 1, eff. Sept. 1, 2003. (2964)

Amended by: (2965)

Acts 2011, 82nd Leg., R.S., Ch. 271 (H.B. 1456), Sec. 1, eff. January 1, 2012. (2966)

Sec. 53.022. PROPERTY TO WHICH LIEN EXTENDS. (2967)(1-click HTML)

(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. (2968)

(b) The lien does not extend to abutting sidewalks, streets, and utilities that are public property. (2969)

(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. (2970)

(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. (2971)

Acts 1983, 68th Leg., p. 3536, ch. 576, Sec. 1, eff. Jan. 1, 1984. (2972)

Sec. 53.023. PAYMENT SECURED BY LIEN. (2973)(1-click HTML)

The lien secures payment for: (2974)

(1) the labor done or material furnished for the construction or repair; (2975)

(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 (2976)

(3) the preparation of a plan or plat by an architect, engineer, or surveyor in accordance with Section 53.021(c). (2977)

Acts 1983, 68th Leg., p. 3536, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1995, 74th Leg., ch. 851, Sec. 2, eff. Sept. 1, 1995. (2978)

Sec. 53.024. LIMITATION ON SUBCONTRACTOR'S LIEN. (2979)(1-click HTML)

The amount of a lien claimed by a subcontractor may not exceed: (2980)

(1) an amount equal to the proportion of the total subcontract price that the sum of the labor performed, materials furnished, materials specially fabricated, reasonable overhead costs incurred, and proportionate profit margin bears to the total subcontract price; minus (2981)

(2) the sum of previous payments received by the claimant on the subcontract. (2982)

Acts 1983, 68th Leg., p. 3536, ch. 576, Sec. 1, eff. Jan. 1, 1984. (2983)

Sec. 53.025. LIMITATION ON ORDINARY RETAINAGE LIEN. (2984)(1-click HTML)

A lien for retainage is valid only for the amount specified to be retained in the contract, including any amendments to the contract, between the claimant and the original contractor or between the claimant and a subcontractor. (2985)

Acts 1983, 68th Leg., p. 3537, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 2, eff. Sept. 1, 1989. (2986)

Sec. 53.026. SHAM CONTRACT. (2987)(1-click HTML)

(a) A person who labors, specially fabricates materials, or furnishes labor or materials under a direct contractual relationship with another person is considered to be in direct contractual relationship with the owner and has a lien as an original contractor, if: (2988)

(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; (2989)

(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 (2990)

(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. (2991)

(b) In this section, "owner" does not include a person who has or claims a security interest only. (2992)

Acts 1983, 68th Leg., p. 3537, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 3, eff. Sept. 1, 1989; Acts 1997, 75th Leg., ch. 526, Sec. 4, eff. Sept. 1, 1997. (2993)

SUBCHAPTER C. PROCEDURE FOR PERFECTING LIEN (2994)(1-click HTML)
Sec. 53.051. NECESSARY PROCEDURES. (2995)(1-click HTML)

To perfect the lien, a person must comply with this subchapter. (2996)

Acts 1983, 68th Leg., p. 3538, ch. 576, Sec. 1, eff. Jan. 1, 1984. (2997)

Sec. 53.052. FILING OF AFFIDAVIT. (2998)(1-click HTML)

(a) Except as provided by Subsection (b), 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 day on which the indebtedness accrues. (2999)

(b) A 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 day on which the indebtedness accrues. (3000)

(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. (3001)

Acts 1983, 68th Leg., p. 3538, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 4, eff. Sept. 1, 1989; Acts 1997, 75th Leg., ch. 526, Sec. 5, eff. Sept. 1, 1997. (3002)

Sec. 53.053. ACCRUAL OF INDEBTEDNESS. (3003)(1-click HTML)

(a) For purposes of Section 53.052, indebtedness accrues on a contract under which a plan or plat is prepared, labor was performed, materials furnished, or specially fabricated materials are to be furnished in accordance with this section. (3004)

(b) Indebtedness to an original contractor accrues: (3005)

(1) on the last day of the month in which a written declaration by the original contractor or the owner is received by the other party to the original contract stating that the original contract has been terminated; or (3006)

(2) on the last day of the month in which the original contract has been completed, finally settled, or abandoned. (3007)

(c) Indebtedness to a subcontractor, or to any person not covered by Subsection (b) or (d), who has furnished labor or material to an original contractor or to another subcontractor accrues on the last day of the last month in which the labor was performed or the material furnished. (3008)

(d) Indebtedness for specially fabricated material accrues: (3009)

(1) on the last day of the last month in which materials were delivered; (3010)

(2) on the last day of the last month in which delivery of the last of the material would normally have been required at the job site; or (3011)

(3) on the last day of the month of any material breach or termination of the original contract by the owner or contractor or of the subcontract under which the specially fabricated material was furnished. (3012)

(e) A claim for retainage accrues on the earliest of the last day of the month in which all work called for by the contract between the owner and the original contractor has been completed, finally settled, terminated, or abandoned. (3013)

Acts 1983, 68th Leg., p. 3539, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 5, eff. Sept. 1, 1989; Acts 1995, 74th Leg., ch. 851, Sec. 3, eff. Sept. 1, 1995. (3014)

Amended by: (3015)

Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 1, eff. September 1, 2011. (3016)

Sec. 53.054. CONTENTS OF AFFIDAVIT. (3017)(1-click HTML)

(a) The affidavit must be signed by the person claiming the lien or by another person on the claimant's behalf and must contain substantially: (3018)

(1) a sworn statement of the amount of the claim; (3019)

(2) the name and last known address of the owner or reputed owner; (3020)

(3) a general statement of the kind of work done and materials furnished by the claimant and, for a claimant other than an original contractor, a statement of each month in which the work was done and materials furnished for which payment is requested; (3021)

(4) the name and last known address of the person by whom the claimant was employed or to whom the claimant furnished the materials or labor; (3022)

(5) the name and last known address of the original contractor; (3023)

(6) a description, legally sufficient for identification, of the property sought to be charged with the lien; (3024)

(7) the claimant's name, mailing address, and, if different, physical address; and (3025)

(8) for a claimant other than an original contractor, a statement identifying the date each notice of the claim was sent to the owner and the method by which the notice was sent. (3026)

(b) The claimant may attach to the affidavit a copy of any applicable written agreement or contract and a copy of each notice sent to the owner. (3027)

(c) The affidavit is not required to set forth individual items of work done or material furnished or specially fabricated. The affidavit may use any abbreviations or symbols customary in the trade. (3028)

Acts 1983, 68th Leg., p. 3540, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 6, eff. Sept. 1, 1989; Acts 1997, 75th Leg., ch. 526, Sec. 6, eff. Sept. 1, 1997. (3029)

Sec. 53.055. NOTICE OF FILED AFFIDAVIT. (3030)(1-click HTML)

(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. (3031)

(b) If the person is not an original contractor, the person must also send a copy of the affidavit to the original contractor at the original contractor's last known business or residence address within the same period. (3032)

Acts 1983, 68th Leg., p. 3540, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 7, eff. Sept. 1, 1989; Acts 1993, 73rd Leg., ch. 48, Sec. 7, eff. Sept. 1, 1993; Acts 1997, 75th Leg., ch. 526, Sec. 7, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 889, Sec. 2, eff. Sept. 1, 1999. (3033)

Sec. 53.056. DERIVATIVE CLAIMANT: NOTICE TO OWNER OR ORIGINAL CONTRACTOR. (3034)(1-click HTML)

(a) Except as provided by Subchapter K, a claimant other than an original contractor must give the notice prescribed by this section for the lien to be valid. (3035)

(b) If the lien claim arises from a debt incurred by a subcontractor, the claimant must give to the original contractor written notice of the unpaid balance. The claimant must give the notice not later than the 15th day of the second month following each month in which all or part of the claimant's labor was performed or material delivered. The claimant must give the same notice to the owner or reputed owner and the original contractor not later than the 15th day of the third month following each month in which all or part of the claimant's labor was performed or material or specially fabricated material was delivered. (3036)

(c) If the lien claim arises from a debt incurred by the original contractor, the claimant must give notice to the owner or reputed owner, with a copy to the original contractor, in accordance with Subsection (b). (3037)

(d) To authorize the owner to withhold funds under Subchapter D, the notice to the owner must state that if the claim remains unpaid, the owner may be personally liable and the owner's property may be subjected to a lien unless: (3038)

(1) the owner withholds payments from the contractor for payment of the claim; or (3039)

(2) the claim is otherwise paid or settled. (3040)

(e) The notice must be sent by registered or certified mail and must be addressed to the owner or reputed owner or the original contractor, as applicable, at his last known business or residence address. (3041)

(f) A copy of the statement or billing in the usual and customary form is sufficient as notice under this section. (3042)

Acts 1983, 68th Leg., p. 3540, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 8, eff. Sept. 1, 1989; Acts 1997, 75th Leg., ch. 526, Sec. 8, eff. Sept. 1, 1997. (3043)

Sec. 53.057. DERIVATIVE CLAIMANT: NOTICE FOR CONTRACTUAL RETAINAGE CLAIM. (3044)(1-click HTML)

(a) A claimant may give notice under this section 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. (3045)

(b) The claimant must give the owner or reputed owner notice of contractual retainage not later than the earlier of: (3046)

(1) the 30th day after the date the claimant's agreement providing for retainage is completed, terminated, or abandoned; or (3047)

(2) the 30th day after the date the original contract is terminated or abandoned. (3048)

(b-1) If an agreement for contractual retainage is with a subcontractor, the claimant must also give the notice of contractual retainage to the original contractor within the period prescribed by Subsection (b). (3049)

(c) The notice must generally state the existence of a requirement for retainage and contain: (3050)

(1) the name and address of the claimant; and (3051)

(2) if the agreement is with a subcontractor, the name and address of the subcontractor. (3052)

(d) The notice must be sent to the last known business or residence address of the owner or reputed owner or the original contractor, as applicable. (3053)

(e) If a claimant gives notice under this section and Section 53.055 or, if the claim relates to a residential construction project, under this section and Section 53.252, the claimant is not required to give any other notice as to the retainage. (3054)

(f) A claimant has a lien on, and the owner is personally liable to the claimant for, the retained funds under Subchapter E if the claimant: (3055)

(1) gives notice in accordance with this section and: (3056)

(A) complies with Subchapter E; or (3057)

(B) files an affidavit claiming a lien not later than the earliest of: (3058)

(i) the date required for filing an affidavit under Section 53.052; (3059)

(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; (3060)

(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 (3061)

(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 (3062)

(2) gives the notice of the filed affidavit as required by Section 53.055. (3063)

(g) The written demand under Subsection (f)(1)(B)(iv): (3064)

(1) must contain the owner's name and address and a description, legally sufficient for identification, of the real property on which the improvement is located; (3065)

(2) must state that the claimant must file the lien affidavit not later than the 30th day after the date the demand is sent; and (3066)

(3) is effective only for the amount of contractual retainage earned by the claimant as of the day the demand was sent. (3067)

Acts 1983, 68th Leg., p. 3541, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 9, eff. Sept. 1, 1989; Acts 1997, 75th Leg., ch. 526, Sec. 9, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 889, Sec. 3, eff. Sept. 1, 1999. (3068)

Amended by: (3069)

Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 2, eff. September 1, 2011. (3070)

Sec. 53.058. DERIVATIVE CLAIMANT: NOTICE FOR SPECIALLY FABRICATED ITEMS. (3071)(1-click HTML)

(a) Except as provided by Subchapter K, a claimant who specially fabricates material must give notice under this section for the lien to be valid. (3072)

(b) The claimant must give the owner or reputed owner notice not later than the 15th day of the second month after the month in which the claimant receives and accepts the order for the material. If the indebtedness is incurred by a person other than the original contractor, the claimant must also give notice within that time to the original contractor. (3073)

(c) The notice must contain: (3074)

(1) a statement that the order has been received and accepted; and (3075)

(2) the price of the order. (3076)

(d) The notice must be sent by registered or certified mail to the last known business or residence address of the owner or the reputed owner or the original contractor, as applicable. (3077)

(e) In addition to notice under this section, the claimant must give notice under Section 53.056 if delivery has been made or if the normal delivery time for the job has passed. (3078)

(f) The lien of a claimant who accepts an order but fails to give notice under this section is valid as to delivered items if the claimant has given notice under Section 53.056. (3079)

(g) If a retainage agreement consists in whole or part of an obligation to furnish specially fabricated materials and the claimant has given notice under Section 53.057, the claimant is not required to give notice under this section. (3080)

Acts 1983, 68th Leg., p. 3542, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 10, eff. Sept. 1, 1989; Acts 1997, 75th Leg., ch. 526, Sec. 10, eff. Sept. 1, 1997. (3081)

SUBCHAPTER D. FUNDS WITHHELD BY OWNER FOLLOWING NOTICE (3082)(1-click HTML)
Sec. 53.081. AUTHORITY TO WITHHOLD FUNDS FOR BENEFIT OF CLAIMANTS. (3083)(1-click HTML)

(a) If an owner receives notice under Section 53.056, 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. (3084)

(b) If notice is sent 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. (3085)

(c) If notice is sent under Section 53.057, the owner may withhold funds immediately on receipt of a copy of the claimant's affidavit prepared in accordance with Sections 53.052 through 53.055. (3086)

(d) If notice is sent under Section 53.058, the owner may withhold funds immediately on receipt of the notices sent under Subsection (e) of that section. If notice is sent as provided by Section 53.253(b), the owner may withhold funds immediately on receipt of the notice sent as required by Section 53.252. (3087)

Acts 1983, 68th Leg., p. 3543, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 12, eff. Sept. 1, 1989; Acts 1997, 75th Leg., ch. 526, Sec. 11, eff. Sept. 1, 1997. (3088)

Sec. 53.082. TIME FOR WHICH FUNDS ARE WITHHELD. (3089)(1-click HTML)

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: (3090)

(1) the time for filing the affidavit of mechanic's lien has passed; or (3091)

(2) if a lien affidavit has been filed, until the lien claim has been satisfied or released. (3092)

Acts 1983, 68th Leg., p. 3544, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 13, eff. Sept. 1, 1989. (3093)

Sec. 53.083. PAYMENT TO CLAIMANT ON DEMAND. (3094)(1-click HTML)

(a) The claimant may make written demand for payment of the claim to an owner authorized to withhold funds under this subchapter. The demand must give notice to the owner that all or part of the claim has accrued under Section 53.053 or is past due according to the agreement between the parties. (3095)

(b) The claimant must send a copy of the demand to the original contractor. The original contractor may give the owner written notice that the contractor intends to dispute the claim. The original contractor must give the notice not later than the 30th day after the day he receives the copy of the demand. If the original contractor does not give the owner timely notice, he is considered to have assented to the demand and the owner shall pay the claim. (3096)

(c) The claimant's demand may accompany the original notice of nonpayment or of a past-due claim and may be stamped or written in legible form on the face of the notice. (3097)

(d) Unless the lien has been secured, the demand may not be made after expiration of the time within which the claimant may secure the lien for the claim. (3098)

Acts 1983, 68th Leg., p. 3544, ch. 576, Sec. 1, eff. Jan. 1, 1984. (3099)

Sec. 53.084. OWNER'S LIABILITY. (3100)(1-click HTML)

(a) Except for the amount 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. (3101)

(b) If the owner has received the notices required by 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 he is liable under Subchapter E. (3102)

Acts 1983, 68th Leg., p. 3545, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1997, 75th Leg., ch. 526, Sec. 12, eff. Sept. 1, 1997. (3103)

Sec. 53.085. AFFIDAVIT REQUIRED. (3104)(1-click HTML)

(a) Any person who furnishes labor or materials for the construction of improvements on real property shall, if requested and as a condition of payment for such labor or materials, provide to the requesting party, or the party's agent, an affidavit stating that the person has paid each of the person's subcontractors, laborers, or materialmen in full for all labor and materials provided to the person for the construction. In the event, however, that the person has not paid each of the person's subcontractors, laborers, or materialmen in full, the person shall state in the affidavit the amount owed and the name and, if known, the address and telephone number of each subcontractor, laborer, or materialman to whom the payment is owed. (3105)

(b) The seller of any real property shall, upon request by the purchaser or the purchaser's agent prior to closing of the purchase of the real property, provide to the purchaser or the purchaser's agent, a written affidavit stating that the seller has paid each of the seller's contractors, laborers, or materialmen in full for all labor and materials provided to the seller through the date specified in the affidavit for any construction of improvements on the real property and that the seller is not indebted to any person, firm, or corporation by reason of any such construction through the date specified in the affidavit. In the event that the seller has not paid each of the seller's contractors, laborers, or materialmen in full for labor and material provided through the date specified in the affidavit, the seller shall state in the affidavit the amount owed and the name and, if known, the address and telephone number of each contractor, laborer, or materialman to whom the payment is owed. (3106)

(c) The affidavit may include: (3107)

(1) a waiver or release of lien rights or payment bond claims by the affiant that is conditioned on the receipt of actual payment or collection of funds when payment is made by check or draft, as provided by Subchapter L; (3108)

(2) a warranty or representation that certain bills or classes of bills will be paid by the affiant from funds paid in reliance on the affidavit; and (3109)

(3) an indemnification by the affiant for any loss or expense resulting from false or incorrect information in the affidavit. (3110)

(d) A person, including a seller, commits an offense if the person intentionally, knowingly, or recklessly makes a false or misleading statement in an affidavit under this section. An offense under this section is a misdemeanor. A person adjudged guilty of an offense under this section shall be punished by a fine not to exceed $4,000 or confinement in jail for a term not to exceed one year or both a fine and confinement. A person may not receive community supervision for the offense. (3111)

(e) A person signing an affidavit under this section is personally liable for any loss or damage resulting from any false or incorrect information in the affidavit. (3112)

Added by Acts 1987, 70th Leg., ch. 578, Sec. 1, eff. Aug. 31, 1987. Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 14, eff. Sept. 1, 1989; Acts 1997, 75th Leg., ch. 526, Sec. 13, eff. Sept. 1, 1997. (3113)

Amended by: (3114)

Acts 2011, 82nd Leg., R.S., Ch. 271 (H.B. 1456), Sec. 2, eff. January 1, 2012. (3115)

SUBCHAPTER E. REQUIRED RETAINAGE FOR BENEFIT OF LIEN CLAIMANTS (3116)(1-click HTML)
Sec. 53.101. REQUIRED RETAINAGE. (3117)(1-click HTML)

(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 is completed, the owner shall retain: (3118)

(1) 10 percent of the contract price of the work to the owner; or (3119)

(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. (3120)

(b) In this section, "owner" includes the owner's agent, trustee, or receiver. (3121)

Acts 1983, 68th Leg., p. 3545, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 15, eff. Sept. 1, 1989. (3122)

Sec. 53.102. PAYMENT SECURED BY RETAINAGE. (3123)(1-click HTML)

The 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. (3124)

Acts 1983, 68th Leg., p. 3545, ch. 576, Sec. 1, eff. Jan. 1, 1984. (3125)

Sec. 53.103. LIEN ON RETAINED FUNDS. (3126)(1-click HTML)

A claimant has a lien on the retained funds if the claimant: (3127)

(1) sends the notices required by this chapter in the time and manner required; and (3128)

(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: (3129)

(A) the work is completed; (3130)

(B) the original contract is terminated; or (3131)

(C) the original contractor abandons performance under the original contract. (3132)

Acts 1983, 68th Leg., p. 3545, ch. 576, Sec. 1, eff. Jan. 1, 1984. (3133)

Amended by: (3134)

Acts 2005, 79th Leg., Ch. 1003 (H.B. 629), Sec. 1, eff. September 1, 2005. (3135)

Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 3, eff. September 1, 2011. (3136)

Sec. 53.104. PREFERENCES. (3137)(1-click HTML)

(a) Individual artisans and mechanics are entitled to a preference to the retained funds and shall share proportionately to the extent of their claims for wages and fringe benefits earned. (3138)

(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 retained funds. (3139)

Acts 1983, 68th Leg., p. 3546, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 1138, Sec. 16, eff. Sept. 1, 1989. (3140)

Sec. 53.105. OWNER'S LIABILITY FOR FAILURE TO RETAIN. (3141)(1-click HTML)

(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 retained from the original contract under which they are claiming, against the house, building, structure, fixture, or improvement and all of its properties and against the lot or lots of land necessarily connected. (3142)

(b) The claimants share the lien proportionately in accordance with the preference provided by Section 53.104. (3143)

Acts 1983, 68th Leg., p. 3546, ch. 576, Sec. 1, eff. Jan. 1, 1984. Amended by Acts 1989, 71st Leg., ch. 2, Sec. 13.02, eff. Aug. 28, 1989; Acts 1989, 71st Leg., ch. 1138, Sec. 17, eff. Sept. 1, 1989. (3144)

Amended by: (3145)

Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 4, eff. September 1, 2011. (3146)

Sec. 53.106. AFFIDAVIT OF COMPLETION. (3147)(1-click HTML)

(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: (3148)

(1) the name and address of the owner; (3149)

(2) the name and address of the original contractor; (3150)

(3) a description, legally sufficient for identification, of the real property on which the improvements are located; (3151)

(4) a description of the improvements furnished under the original contract; (3152)

(5) a statement that the improvements under the original contract have been completed and the date of completion; and (3153)

(6) a conspicuous statement that a claimant may not have a lien on retained funds unless the claimant files an affidavit claiming a lien not later than the 40th day after the date the work under the original contract is completed. (3154)

(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, 53.057, 53.058, 53.252, or 53.253 not later than the date the affidavit is filed or the 10th day after the date the owner receives the notice of lien liability, whichever is later. (3155)

(c) A copy of the affidavit must also be sent to each person who furnishes labor or materials for the property and who furnishes the owner with a written request for the copy. The owner must furnish the copy to the person not later than the date the affidavit is filed or the 10th day after the date the request is received, whichever is later. (3156)

(d) 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 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. (3157)

(e) Repealed by Acts 1999, 76th Leg., ch. 889, Sec. 12, eff. Sept. 1, 1999. (3158)

Added by Acts 1989, 71st Leg., ch. 1138, Sec. 18, eff. Sept. 1, 1989. Amended by Acts 1997, 75th Leg., ch. 526, Sec. 14, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 889, Sec. 12, eff. Sept. 1, 1999. (3159)

Amended by: (3160)

Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 5, eff. September 1, 2011. (3161)

Sec. 53.107. NOTICE RELATING TO TERMINATION OF WORK OR ABANDONMENT OF PERFORMANCE BY ORIGINAL CONTRACTOR OR OWNER. (3162)(1-click HTML)

(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: (3163)

(1) given notice to the owner as provided by Section 53.056, 53.057, or 53.058; or (3164)

(2) sent to the owner by certified or registered mail a written request for notice of termination or abandonment. (3165)

(b) The notice must contain: (3166)

(1) the name and address of the owner; (3167)

(2) the name and address of the original contractor; (3168)

(3) a description, legally sufficient for identification, of the real property on which the improvements are located; (3169)

(4) a general description of the improvements agreed to be furnished under the original contract; (3170)

(5) a statement that the original contract has been terminated or that performance under the contract has been abandoned; (3171)

(6) the date of the termination or abandonment; and (3172)

(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 not later than the 40th day after the date of the termination or abandonment. (3173)

(c) A notice sent in compliance with this section on or before the 10th day after the date of termination or abandonment is prima facie evidence of the date the original contract was terminated or work was abandoned for purposes of this subchapter. (3174)

(d) If an owner is required to send a notice to a subcontractor under this section and fails to send the notice, the subcontractor is not required to comply with Section 53.057 to claim retainage and may claim a lien by filing a lien affidavit as prescribed by Section 53.052. (3175)

(e) This section does not apply to a residential construction project. (3176)

Added by Acts 2005, 79th Leg., Ch. 1003 (H.B. 629), Sec. 2, eff. September 1, 2005. (3177)

Amended by: (3178)

Acts 2011, 82nd Leg., R.S., Ch. 499 (H.B. 1390), Sec. 6, eff. September 1, 2011. (3179)

SUBCHAPTER F. PRIORITIES AND PREFERENCES (3180)(1-click HTML)
  

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