The first step in analyzing your Mechanics Lien rights is to determine whether you supplied labor or materials to a “residential” Property or a “commercial” Property as defined under the Texas Property Code. If the Property is not “residential,” then it is “commercial” by default.
A “residential Property” is a single-family house, a duplex, a triplex, a quadruplex, or a unit in a multi-unit structure (like a condo) that is used for residential purposes and that is:
(1) owned by one or more adult persons (not an entity); and
(2) used or intended to be used as a dwelling by one of the Owners.
Therefore, if the Owner is a company (like a builder), then the Property is likely commercial and not residential for Mechanics Lien purposes. In contrast, if the Owner lives in or intends to live in the house, then the Property is likely considered residential for Mechanics Lien purposes. See Section 53.001(8) of the Texas Property Code to learn more.
Here are some basic examples to consider: your next door neighbor’s house, if rented, would not be a residential Property since the Owner does not live in the house and since it is being used to generate income. A spec house or a house in a large scale development would not be residential if it has not yet been sold and occupied by its Owner. An apartment complex is not a residential Property if the units are intended to be leased. Therefore, just because something looks like a “residence” does not mean that it is a residential Property for Mechanics Lien purposes.
The Pre-Lien Notice and Mechanics Lien filing deadlines are shorter for residential Properties than they are for commercial Properties. Additionally, there are special requirements which must be followed if the Property is a residential homestead Property. Therefore, it is always better for the Claimant if the Property is considered “commercial” rather than “residential.”