Thursday, August 2, 2012

Texas Mechanic's & Materialmen's Liens and Bond Claims: TYPES OF PROJECTS

There are a few steps contractors should go through at the very beginning of the lien and bond claim process before any notices are sent.  Why?  Before you get started, you need to know the type of project, property and your status (as general contractor, subcontractor or sub-subcontractor).  These factors will establish whether you are following the lien claim or bond claim process and will largely determine the deadlines you must meet and the procedures to be followed to perfect your claim.

Private Property v. Public Property = Lien Claim v. Bond Claim

Private property is subject to a lien while public property is not. 

Accordingly, if property is owned privately, contractors should follow mechanic’s and materialman’s lien procedures. 

If property is public, contractors should follow bond claim procedures.

Private Projects = Lien Claim

Private projects are construction projects on property owned by individuals or companies, not owned by governmental entities.  Chapter 53 of the Texas Property Code addresses claims arising out of work on private projects / property.
Private projects may be further classified as commercial, residential, or homestead.

Commercial Projects
Commercial projects are construction projects that do not involve residences.  Examples would include office buildings, restaurants, and warehouses.

Residential Projects
A residence is defined as a “single-family house, duplex, triplex, or quadruplex, or a unit in a multiunit structure used for residential purposes, that is owned by one or more adult persons and used, or intended to be used, as a dwelling by one of the owners.” 
A residential construction project is a project for the construction or repair of a new or existing residence, including improvements appurtenant to the residence.

Residential Homestead Projects
Generally, homestead property is property that an individual intends to use as his or her residence.  See Texas Property Code § 41.002 and article 16, section 51 of the Texas Constitution.

Texas Public Projects = Bond Claim

Public property is owned by governmental entities and public projects are those in which governmental entities make public works contracts.  In other words, the General Contractor has its contract with a governmental entity. 

Governmental entities include but are not limited to the following: a governmental or quasi-governmental authority authorized by state law to make a public work contract, the state, a county, or a municipality, a department, board, or agency of the state, and a school district or a subdivision of a school district.

Federal Public Projects = Miller Act

Federal projects are those projects on US government property or projects on behalf of the US government.  The Miller Act governs claims on federal public work projects

By Sarah F. Berry, Attorney

If you are interested in attending a lien and bond claim workshop please contact Sarah Berry for more information. or (512) 472-2300.