You cannot file a Lien against a publicly owned Property. No exceptions! Instead, on public Projects where the prime contract (the contract between the Public Entity and the General Contractor) is over $25,000.00, the General Contractor is required to obtain a Payment Bond from a reputable Surety (an insurance company) to protect Subcontractors and Suppliers from nonpayment. When you have not been timely paid by the General Contractor or a Subcontractor, your remedy is to demand Payment from the Surety who issued the Payment Bond. This process is known as making a “Payment Bond Claim” or a “Claim against the Bond.” As with the Lien process, you must timely serve the Surety and General Contractor with notice of your Claim as required under the Texas Government Code, or you will waive your right to make the Claim.
Exception
On Projects where the prime contract is less than $25,000.00, the General Contractor is not required to obtain a Payment Bond. On these smaller Projects, Subcontractors/Suppliers have the right to file a Lien against the “unpaid construction funds” due to the General Contractor by the Public Entity. Note: this Lien is not recorded against the Property; it is a Lien against the unpaid construction funds and is perfected by serving all necessary Lien Documents on the proper parties.
Practice Pointer
The Governmental Entity for whom the work is being performed is required to ensure that the General Contractor obtains a Payment Bond before any work begins on the Project. If the Entity fails to do so, it becomes liable for any unpaid Subcontractors/Suppliers Claims as if it was the Surety. In this situation, all preliminary notices and Claims that would have been made against the Surety, should now be made against the Governmental Entity.
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