Accrual Date

The date that the indebtedness in the business of filing liens is a very critical decision.

An indebtedness accrues on a specific date that is fixed by Property Code Section 53.053. That date is usually the last day of the month following the occurrence of an event. The event generally involves the furnishing of labor or materials, but may vary according to the nature of the claimant and the basis of the claim. A premature termination of the contract may fix the date the indebtedness accrues. The debt owed a general contractor accrues on the last day of the month in which either (1) a written declaration by that contractor or the owner is received by the other party to the original contract, stating that the original contract has been terminated, or (2) the original contract has been completed, finally settled, or abandoned. Indebtedness to a subcontractor, or to anyone other than the general contractor for anything other than specially fabricated materials, accrues on the last day of the last month in which labor was performed or material was furnished. Indebtedness for retainage accrues on the last day of the month in which all work called for by the contract between the owner and the original contractor was completed, finally settled, or abandoned. The debt owed for specially fabricated materials accrues on the last day of the:

1. Last month in which the materials were delivered.

2. Last month in which delivery of the last of the material would have normally been required at the job site.

3. Month of any material breach or termination of the original contract by the owner or contractor or of the subcontract under which the specially fabricated material was furnished.

If the owner breaches a construction contract, the contractor may continue working on the project without waiving the right to full payment under the contract.

Affidavit of Completion

An owner who wants to establish prima facie evidence of the date on which work was completed may file an affidavit of completion on or before the tenth day after the date of completion of the improvements.

The affidavit of completion must be filed with the clerk of the county in which the property is located. A copy must be sent by certified or registered mail to the original contractor no later than the date the affidavit is filed. Additional copies of the affidavit must be sent to each claimant who sends a notice of lien liability to the owner under Property Code Sections 53.056 through 53.058, or 53.252 or 53.253 (applying in the case of residential construction projects) not later than the date the affidavit is filed, or the 10th day after the date the owner receives the notice of lien liability. Finally, copies of the affidavit must also be sent to each person who furnishes labor or materials for the property and who requests a copy from the owner in writing.

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