There are several steps to perfecting a claim in Texas. It all begins with collecting the information necessary to determine which process to follow. The 10 steps laid out below walk you through collecting information about the project, contract and claim. We will collect the contact information for the claim participants, your invoices and releases, and which months you provided labor or materials on the job. Lastly, we’ll show you how to track your progress as you walk a clear path through the claim perfection maze.

Create Lien and Bond Claim

Let’s start by creating the Claim, and if necessary, creating a new Project.

Step 1: Getting Started

In order to determine the process for perfecting the claim, you will need to provide information about the Project Type, Bond Type and your Role on the project.

Step 2: Determine your Project Type

Step 3: Determine your Bond Type

Step 4: Determine your Claimant Role

Next, you will need to provide information about the claim. These additional properties will help fill in the documents that are used during the claim perfection process.

Step 5: Collect Claim Information

After you have saved your claim, it is time to collect the contact information for the recipients of the documents that you will need to send via Certified Mail Return Receipt Requested.

Step 6: Provide Claim Participant Information

Now that you have provided the contact information for the Claim Participants, the next step is to collect information about the history of your project. In order to accomplish this, you can provide information about your invoices, previous releases of claims and the dates that you furnished labor or materials. Over the months that you are on the project, you will need to come back to these steps to keep your claim information current.

Step 7: Add Project Invoices

Step 8: Add Claim Releases

Step 9: Add Furnished Dates

Now that you have provided information about the claim, it’s time to look at the list of tasks that you will need to complete while perfecting your claim. Many of these tasks are based on the months that you were providing labor or materials to the project, though some tasks are also based on either the beginning or the completion, termination or abandonment of the project.

Step 10: Complete your Tasks

Now that you are marching steadily through the lien and bond maze, hopefully you will find resolution through your lien or bond. If not, it will be necessary to file a suit, which also has a statute of limitations. If you have not already consulted an attorney, you should do so now. Look in our Service Directory to find one in your area.

Let’s begin by clicking on the ‘Create Claim’ link in the blue menu bar. This will open a new page which you will use to save the project and claim information.

The Create Claim Page includes three blocks of information: Project Information, Contract Information and Claim Information.

You will notice that there is no Project selected in the Project Name field. That is because you don’t have any projects defined yet, so let’s fix that right now.

Click on the ‘Create Project’ link. This will create a pop-up where you can provide information about the project including the Legal Description and Address.

Once you have provided this information, click ‘Save’ and the Claim will have the new project selected.

Now you are ready to move onto Step 2: Determining your Project Type

Project Type

Identifying the owner and understanding the intended use of the project are usually the key to determining the project type. Sometimes it may be necessary to review bond information to distinguish between Federal or State and Local projects.

Private projects are those where the owner is not a governmental or quasi- governmental entity. The rules governing the lien and bond claims for Private projects are contained in Chapter 53 of the Texas Property Code.

Private Residential projects were first introduced by the Texas Legislature in 1997 and included changes to Chapter 53 of the Texas Property Code that amended the procedures for perfecting lien claims. Residential construction includes the construction and repair a of one to four unit house or residential structure which is actually used or intended for use by the owners as their dwelling. It is intended to include second homes, vacation homes and new homes under construction. It does NOT include homes built for resale or rental homes. It also excludes “tract” and “speculative” home construction by builder-developers.

State / Local Public Works projects are those in which the owner is a governmental authority or entity. Examples of State and Local entities include water and utility districts, counties, cities, school districts, state owned colleges and universities and agencies of the State of Texas. While the Texas Constitution does nor permit lien claims against state owned property, claimants can acquire a claim on contract funds held by the public authority or against the statutory bond. Statutory payment bonds are required for most State and Local Public Works projects, though there are limits on the minimum project value before a Prime Contractor is required to provide the payment bond. The Texas Government Code Chapter 2253 is the primary governing statute for these projects.

Federal Public Works projects are those in which the the United States Government, or any of the hundreds of agencies or departments,  is party awarding the contract to the Prime Contractor. There are some significant differences in who is protected on Federal Projects as well much higher contract values before the Prime Contractor is required to provide a payment bond. The U.S.C. Title 40 subsections 3131-3134 describe requirements and process for filing your bond claims.

Next Topic : Determine your Bond Type

Learn more with our online ProClaim tutorial

Statutory Payment Bond Type

Determining whether your project is bonded is a very important first step and should be completed early. The original or prime contractor has 10 days to respond to a certified letter requesting the bond information, so do not wait until your first deadlines to collect the information about the surety from the bond. Also, reviewing the statutory payment bond may be necessary to distinguish between Federal or State and Local project types, which also require different perfection processes.

Private Statutory Payment Bonds

Also known as “Hardeman Act” or “Property Code” bonds, as the Texas Property statutes define the processes required to properly perfect the bond claim. Because these bonds are provided by the Original Contractor, claims against the statutory payment bond can only be perfected by subcontractors. To perfect a claim against the surety on a private project, the claimant MUST send to the surety a copy of everything the claimant sends to the owner.

State / Local Public Works Statutory Payment Bonds

Also known as “McGregor Act” bonds, these are governed by Chapter 2253 of the Texas Government Code. State and Local governmental entities must require their Prime Contractors to furnish a payment bond on all construction projects for that governmental entities where the original contract exceeds a certain amount. The amount is dependent on the nature of the project.

In some cases it may be difficult to determine whether the project is subject to Federal or State and Local codes. Since these bonds are governed by different statutes, it is imperative to obtain a copy of the bond early in the project to ensure that the proper process is followed.

Federal Public Works Statutory Payment Bonds

Also known as “Miller Act” bonds, these are governed by the U.S.C. Title 40 subsections 3131-3134 which describe requirements and process for filing your bond claims. Federal governmental entities must require their Prime Contractors to furnish a payment bond on all construction projects for that governmental entities where the original contract exceeds a certain amount.

In some cases it may be difficult to determine whether the project is subject to Federal or State and Local codes. Since these bonds are governed by different statutes, it is imperative to obtain a copy of the bond early in the project to ensure that the proper process is followed.

Next Topic : Determine your Claimant Role

Learn more with our online ProClaim tutorial

The claimant role helps determine the list of tasks and deadlines for the claim. The claimant’s tier also adjusts the list of recipients that will need to be included in the notifications. For purposes of Texas project types, governed by the Property Code and Government Code lien and bond statutes, the term “Subcontractor” also includes “Supplier” and “Materialman”. Claim protections are extended below second tier subcontractors, who need to follow the rules set forth for 2nd tier claimants to perfect their claims.

This is NOT the case for Federal projects, which treat subcontractors and suppliers differently. Additionally, the protections do not extend below the 2nd tier, nor do they extend to subcontractors or suppliers of 1st tier suppliers.

You’ll notice that as you change the Project Type in the ‘Edit Claim’ page, the Claimant selector changes to account for the changes in eligible claimant roles.

Original Contractors are those who contract directly with the owner for Private or Private Residential projects

Prime Contractors are those who contract directly with the owner for State/Local or Federal projects

First Tier Subcontractor have a direct contractual relationship with the Original or Prime contractor

Second Tier Subcontractor do not have a direct contractual relationship with the Original or Prime contractor. NOTE: when on a Federal project, second tier subcontractors are not afford claim protection for those providing services to 1st tier suppliers.

First Tier Supplier is used to distinguish claimant role on Federal Projects and represents those who provide materials for the project.

Second Tier Supplier is used to distinguish claimant role on Federal Projects and represents those who provide materials to 1st tier subcontractors. Recall that when on a Federal Project, 2nd tier suppliers are only protected when they have contractual relationships with 1st tier subcontractors.

Next Topic : Collect Claim Information

Learn more with our online ProClaim tutorial