A warehouse owner in Brownsville hires a general contractor to replace a roof and add a loading dock before a new tenant moves in. The owner pays every invoice on time. Two months after the work ends, a letter arrives from a steel supplier the owner never met: the contractor did not pay for the dock materials, and the supplier is claiming a lien on the building. A buyer's title company later finds the lien affidavit in the county records, and the sale stalls until it is resolved.
This article is an owner brief on paying for construction safely for owners and investors improving industrial, flex, warehouse, yard, or commercial property in Brownsville and the Lower Rio Grande Valley—new buildings, tenant build-outs, re-roofs, paving, and storm repairs. It is not legal, tax, or construction advice. Building from raw land lives in ground-up development. Re-tenanting an older building lives in certificates of occupancy and accessibility. Storm exposure lives in flood, stormwater, and windstorm. This page owns how Texas lien law affects the owner who pays for the work: retainage, notices, lien waivers, payment timing, bonds, and the records that keep a title clean.
Alfredo Cristo Realty Group works from Brownsville with more than 45 years of advisory and stewardship experience, Texas real-estate licensing, and a background in Mexico corporate and real-estate law. The objective matches our promise: Experience that protects your investment. Education first. Specialist handoff when the question leaves the real-estate lane.
Can a subcontractor put a lien on my property even if I paid my contractor? It can try. Texas Property Code Chapter 53 allows subcontractors and suppliers who were not paid to claim a lien if they send the required notices and file an affidavit on time. An owner's exposure is generally limited to the retainage the owner was required to hold plus any money paid to the contractor after the owner received a proper notice of claim—which is why the retainage and notice rules below matter.
What is retainage in Texas? Section 53.101 of the Texas Property Code says that during the work under an original contract, and for 30 days after the work is completed, the owner must reserve 10 percent of the contract price, or 10 percent of the value of the work done, measured as the statute describes. Section 53.105 says that if the owner fails to reserve those funds, claimants who comply with the statute have a lien at least to the extent of the amount that should have been reserved.
This article is educational only. It is not legal, tax, or construction advice. Retain Texas construction or real-estate counsel, a CPA, and a title company for those decisions. Nothing below invents costs, timelines, lien amounts, or statistics. Statutory statements are attributed to the Texas Property Code sections they come from, as amended by House Bill 2237 (87th Legislature), which took effect January 1, 2022 for the sections cited here.
Why construction payments are a real-estate question
For an industrial or commercial owner, a mechanic's lien is not only a dispute between contractors. A lien affidavit filed with the county clerk is recorded against the property. It can show up in a buyer's title commitment, in a lender's review before a refinance, or in an estoppel or sale-leaseback negotiation. Our selling guide and owner-occupant financing briefs cover those transactions; this page covers how to keep construction work from clouding them.
The work that triggers these rules is broader than new construction:
- New buildings and additions: shells, pre-engineered metal buildings, mezzanines, docks, canopies
- Tenant build-outs: offices, restrooms, power upgrades, racking anchored to the slab, cold rooms
- Capital repairs: roofs, paving, drainage, fencing, fire protection, HVAC
- Storm and emergency repairs: work done quickly after wind or water damage, often with less paperwork than planned work
Each of these usually involves an "original contractor"—the contractor who contracts directly with the owner—and, behind that contractor, subcontractors and suppliers the owner may never meet. Texas lien law gives those downstream parties a path to the owner's property when they are not paid.
The basic shape of a Texas mechanic's lien on a commercial project
Chapter 53 of the Texas Property Code sets the rules. The statute distinguishes residential construction projects from all other projects; industrial and commercial work generally falls in the "other than residential" category. Owners should know the main deadlines so they can recognize a valid notice and a stale one. Counsel applies them to your facts.
Who can claim and when they must act
- Original contractor: Section 53.052 says an original contractor claiming a lien on a non-residential project must file an affidavit with the county clerk not later than the 15th day of the fourth month after the month in which its work was completed, terminated, or abandoned
- Subcontractors and suppliers: the same section gives other claimants until the 15th day of the fourth month after the month they last provided labor or materials (with a separate rule for specially fabricated materials)
- Notice to the owner: Section 53.056 says a claimant other than the original contractor must send a notice of claim for unpaid labor or materials to the owner or reputed owner and the original contractor, on non-residential projects not later than the 15th day of the third month after the month the labor or materials were provided. The statute prescribes the form, which lists the project, claimant, type of work, original contractor, and claim amount
- Where the affidavit goes: Section 53.052 says the affidavit must be filed in the county where the improvements are located. For Brownsville property, that is the Cameron County Clerk
- Suit deadline: Section 53.158 says suit to foreclose the lien generally must be brought not later than the first anniversary of the last day the claimant could file the lien affidavit, unless the claimant and the record owner sign and record a written extension as the statute allows
Retainage: the owner's 10 percent
Section 53.101 requires the owner to reserve 10 percent of the contract price, or of the value of the work done, during the work and for 30 days after the work is completed. In plain terms, this is the owner's protection fund. If the owner holds it correctly and pays it out only after the period runs, the owner's exposure to downstream claims is generally limited.
Key points from the statute:
- If the owner does not reserve it: Section 53.105 says complying claimants have a lien at least to the extent of the amount that should have been reserved
- Retainage claims by subcontractors: Section 53.057 requires a subcontractor whose contract provides for retainage to send a notice of claim for unpaid retainage, not later than the earlier of the 30th day after its own contract is completed, terminated, or abandoned or the 30th day after the original contract is terminated or abandoned, unless the claim was already included in a Section 53.056 notice
- Lien on reserved funds: Section 53.103 says a claimant has a lien on the reserved funds if it sends the required notices and files its affidavit not later than the 30th day after the earliest of completion, termination, or abandonment (with the exception in Section 53.057(f))
- Owner's affidavit of completion: Section 53.106 lets the owner file an affidavit of completion with the county clerk, with the statutory contents, and send copies to the original contractor and to claimants who sent notices. The statute treats a timely affidavit as prima facie evidence of the completion date
- Termination or abandonment: Section 53.107 says that on a non-residential project, not later than the 10th day after the original contract is terminated or abandoned, the owner must give notice to subcontractors who sent notices or requested one. If the owner fails to send it, the statute relaxes the subcontractor's retainage-notice requirement
When the owner receives a notice of claim
Section 53.081 says that when an owner receives a Section 53.056 notice, the owner may withhold from payments to the original contractor an amount necessary to pay the claim. Section 53.084 says the owner is generally not liable for amounts paid to the original contractor before the owner was authorized to withhold—but if the owner received the notice, the lien was secured, and the claim reaches final judgment, the owner can be liable for money paid to the original contractor after the owner was authorized to withhold.
In plain terms: once a notice of claim arrives, paying the contractor as usual can turn into paying twice. Section 53.082 says the owner retains withheld funds until the time to file a lien affidavit has passed or, if one has been filed, until the claim is satisfied or released, unless the claim is otherwise resolved as the statute allows. Call counsel the day a notice arrives.
Lien waivers: use the statutory forms
House Bill 2237 tightened the rules on lien waivers. Section 53.281 says a waiver and release is effective to release the owner, the owner's property, the contractor, and a payment-bond surety only if it substantially complies with a form prescribed by Section 53.284, is signed by the claimant or its authorized agent, and—for a conditional release—evidence of payment exists. Section 53.282 says other statements purporting to waive lien rights are generally not enforceable unless the claimant was actually paid in full, with a separate exception for certain single-family residential contracts.
Section 53.284 prescribes four forms owners will see:
- Conditional waiver and release on progress payment
- Unconditional waiver and release on progress payment
- Conditional waiver and release on final payment
- Unconditional waiver and release on final payment
The unconditional forms carry a statutory warning at the top stating that the document waives rights unconditionally and that it is prohibited to require someone to sign it if they have not been paid. The conditional progress form states that before relying on it, the recipient should verify evidence of payment to the signer.
Practical owner habits:
- Ask for waivers with every draw: conditional waivers with the pay application, unconditional waivers once the prior payment cleared
- Ask for waivers from more than the general contractor: major subcontractors and suppliers, especially on materials-heavy work like steel, roofing, and concrete
- Do not draft your own waiver language: a custom form may not meet Section 53.284
- Match waivers to amounts: the dollar amounts and job descriptions should match the pay application they relate to
Paying on time: the Texas Prompt Payment Act
Chapter 28 of the Texas Property Code sets payment timing for private construction contracts. Section 28.002 says that when an owner receives a written payment request for properly performed work or suitably stored or specially fabricated materials allowed under the contract, the owner must pay the amount, less any amount withheld as authorized by statute, not later than the 35th day after receiving the request. The contractor then has seven days after receiving the owner's payment to pay its subcontractors their share, and each subcontractor has seven days to pay its own subcontractors.
Other points owners should know:
- Good-faith disputes: Section 28.003 says that on projects other than a detached single-family residence, duplex, triplex, or quadruplex, a party disputing an amount in good faith may withhold not more than 100 percent of the difference between the amount claimed and the amount it agrees is owed
- Lender delays: Section 28.008 shifts the owner's payment date to the fifth day after the owner receives loan proceeds when the owner timely requested a construction-loan disbursement that the lender was obligated to make but did not make within 35 days
- Suspension of work: Section 28.009 says that if the owner fails to pay an undisputed amount on time, the contractor or a subcontractor may suspend performance on the 10th day after giving the owner (and, in some cases, the owner's lender) written notice
- Statutory withholding is allowed: the 10 percent retainage and claim withholding under Chapter 53 are amounts "withheld as authorized by statute"
Prompt payment and lien protection work together. An owner who documents why an amount is withheld—retainage, a notice of claim, or a specific good-faith dispute—is in a better position than one who simply pays late.
Construction money is trust money
Chapter 162 of the Texas Property Code, often called the Construction Trust Fund Act, says construction payments made to a contractor or subcontractor under a construction contract for the improvement of specific Texas real property are trust funds, and Section 162.002 makes the person who receives or controls them a trustee. Section 162.031 describes when a trustee misapplies trust funds and lists defenses, including funds retained as authorized or required by Chapter 53.
For owners, the practical point is simple: the statute expects the money you pay your contractor to flow to the people who did the work. Ask about it. A contractor who resists lien waivers or payment information is a signal to slow down.
Bonds: moving the risk off the property
Two kinds of bonds appear in Chapter 53:
- Payment bond for the project: Section 53.201 says an original contractor with a written contract with the owner may furnish a bond for the benefit of claimants. If a valid bond is filed, claimants may not sue the owner or the owner's property, and the owner is relieved of the withholding and retainage obligations in Subchapters D and E. Sections 53.202 and 53.203 set the bond's requirements and recording
- Bond to indemnify against a filed lien: Section 53.171 says that when a lien is filed, any person may file a bond to indemnify against it. Once a compliant bond is filed, notice is issued, and both are recorded as the statute requires, the lien claim against the owner's property is discharged and the claimant looks to the bond
Bonds have costs and underwriting, and not every project or contractor can obtain one. Ask counsel and your contractor whether a payment bond fits a larger project, especially one tied to a sale, refinance, or lender requirement.
When a lien is filed anyway
Not every filed lien is valid. Section 53.160 lets a party in a suit about a lien file a verified summary motion to remove a lien on limited grounds, such as a notice that was not timely, an affidavit that did not meet Sections 53.052 or 53.054, a missing notice of the filed affidavit, expired retainage deadlines where the owner reserved and paid correctly, or a valid statutory waiver signed by the claimant.
Section 53.159 also gives owners and claimants information rights. On written request, an owner must give persons furnishing labor or materials certain project information—including a legal description, any payment bond, prior recorded liens, and the contract date—within 10 days. A claimant must give the owner, on written request, copies of its agreement and billing for the amount claimed within 30 days.
Owner steps when a notice or lien appears:
- Do not ignore it: the deadlines that follow run whether or not the owner responds
- Stop and check before the next draw: the withholding rules in Sections 53.081 and 53.084 change what is safe to pay
- Pull the paperwork: contract, pay applications, waivers, notices, and the date the work was completed
- Bring in counsel: whether to withhold, bond around, negotiate, or challenge is a legal decision
Notes for tenant build-outs and leased buildings
Many Brownsville industrial owners are landlords. When a tenant hires its own contractor for a build-out, owners should ask counsel how Chapter 53 applies to the landlord's interest and what the lease says about construction, contractor approval, lien waivers, and lien removal. Our landlord leasing guide covers improvement allowances and lease structure; the points here are about payment paperwork:
- Tenant improvement allowances: if the landlord pays an allowance, consider requiring conditional and unconditional statutory waivers before each disbursement
- Lease clauses: many leases require a tenant to remove or bond any lien filed because of its work within a stated period. Your counsel drafts that language
- Owner of record: subcontractor notices go to the owner or "reputed owner." Keep the county appraisal and deed records current so notices reach the right entity, especially when title sits in an LLC or family entity
Notes for Mexican and binational owners
Owners based in Matamoros, Monterrey, or elsewhere in Mexico often manage Brownsville projects from a distance. Texas lien deadlines are counted by months and days, and notices go by mail to the owner of record. A notice that sits unopened at an old mailing address can cost the owner its chance to withhold.
- Keep a Texas mailing point: a property manager, registered agent, or counsel who opens and logs construction mail
- Use Texas forms: Mexican or custom waiver forms may not meet Section 53.284
- Coordinate entities: if a Mexican company or a Texas LLC owns the property, make sure the contracting party, the owner of record, and the paying account line up
Documents folder for a construction project
Keep these together for every project, and keep them after closeout. A buyer, lender, or title company may ask for them years later.
- Signed construction contract and change orders
- Pay applications with schedule of values
- Statutory conditional and unconditional waivers from the original contractor and major subcontractors and suppliers, for every draw and the final payment
- Retainage ledger showing what was held and when it was released
- Every notice of claim received, with the date received and what was withheld
- Affidavit of completion if filed, with proof it was sent as Section 53.106 requires
- Any notice of termination or abandonment sent under Section 53.107
- Payment bond and surety contact, if one was furnished
- Final certificate of occupancy or inspection sign-offs where the work required them
- A recent county records check for lien affidavits before releasing retainage
Common mistakes owners make
- Paying the full contract price as work progresses without reserving the 10 percent
- Releasing retainage early because the job looks finished
- Accepting a waiver that is not on the statutory form
- Accepting only the general contractor's waiver on a job with large material suppliers
- Continuing to pay after a notice of claim arrives
- Letting construction mail go to an old address or a tenant's suite
- Treating storm repairs as too urgent for paperwork
- Learning about a lien for the first time from a buyer's title commitment
Questions to bring to counsel, your contractor, and your title company
- On this project, what is my retainage, and on what date can I release it?
- Should I file an affidavit of completion, and who must receive a copy?
- Which subcontractors and suppliers should give me waivers with each draw?
- Does this project justify a payment bond?
- What does my lease require from a tenant's contractor, and what can I require before funding an allowance?
- Are there any lien affidavits or notices of claim recorded against my property today?
How Alfredo Cristo Realty Group helps
We help Brownsville and Lower Rio Grande Valley owners organize the property side of construction—keeping project records with the property file, coordinating tenants, contractors, and site access as part of management / stewardship, flagging recorded liens before a sale or refinance, and connecting owners with Texas construction and real-estate counsel, CPAs, title companies, and contractors. We serve as a Brownsville accountable point through consultation / contact. We are not lawyers or contractors, and we make no promises about costs, timelines, lien outcomes, or values.
Review current properties and market context without pressure toward a listing, or read about Alfredo's background. Related reading: ground-up development, re-tenanting an older warehouse, landlord leasing guide, ownership costs, flood, stormwater, and windstorm, and selling an industrial or income property. More on the Insights hub. Spanish readers: Artículos.
The objective: help owners pay for the work once, keep the title clean, and protect the building they intend to hold.
Sources
- Texas Property Code, Chapter 53 (Mechanic's, Contractor's, or Materialman's Lien), Sections 53.052, 53.056, 53.057, 53.081, 53.082, 53.084, 53.101, 53.103, 53.105, 53.106, 53.107, 53.158, 53.159, 53.160, 53.171, 53.201, 53.281, 53.282, and 53.284, via the Texas Legislature's statutes site (accessed October 29, 2026)
- Texas Property Code, Chapter 28 (Prompt Payment for Contractors and Subcontractors), Sections 28.002, 28.003, 28.008, and 28.009 (accessed October 29, 2026)
- Texas Property Code, Chapter 162 (Construction Payments and Loan Receipts as Trust Funds), Sections 162.001, 162.002, and 162.031 (accessed October 29, 2026)
- Texas Legislature Online, House Bill 2237, 87th Legislature, Regular Session (2021), bill history (accessed October 29, 2026)
Educational disclaimer (repeated): This page is owner education only. It is not legal, tax, or construction advice, and it does not predict the outcome of any lien, claim, or dispute. Do not rely on it for payment, withholding, contract, or lien decisions. Work with Texas construction or real-estate counsel, a CPA, and a title company, and Mexican counsel where owners or entities are in Mexico. Verify the current statute and your contract terms for your project before you pay, withhold, or release retainage.
This guide is also available in Spanish: /es/articulos/gravamenes-constructor-retencion-obra-comercial-brownsville.