Contractor Tiers

One of the first questions we ask any client is: who did you have a contract with? The owner, or the general contractor?

The answer controls almost everything that follows: the notices you have to send, the deadlines that apply to you, and the maximum amount you can recover through a lien. Getting it wrong means using the wrong process, which can cost you your lien rights entirely.

The Original Contractor

An original contractor, sometimes called a prime contractor, is the party who has a direct written or oral contract with the property owner. If the owner hired you directly, you are an original contractor.

Original contractors have the most direct lien rights against the property. The owner has agreed to pay you, bargained on the price, and knows exactly who you are. The law reflects that. You are not required to send pre-lien notices to the owner before filing your lien, because the owner already knows you exist; they hired you. You also have a constitutional lien right that arises the moment you begin performing work, in addition to your statutory rights.

The Subcontractor

A subcontractor is anyone who has a contract with the general contractor rather than with the owner. The owner did not hire you; the GC did. The owner may not even know your name.

That indirect relationship is why Texas law requires subcontractors to do more procedural work to preserve their lien rights. The owner needs notice that you exist and that you are owed money, because they did not bargain with you directly and may not know you are on the project.

Subcontractors must send pre-lien notices to both the owner and the general contractor for each month in which they are not paid. Missing those notices can eliminate lien rights for the affected period. Subcontractors can also only reach the owner’s retainage fund and the amounts the owner should have withheld from the GC; the owner is not liable for more than that.

Sub-Subcontractors and Lower Tiers

If you were hired by a subcontractor rather than by the GC directly, you are a sub-subcontractor. Texas lien law covers you, but the rules get more involved the deeper your tier. Your notices go to the owner and to the GC above you in the chain, and the amounts you can recover are limited by what the layers above you are owed.

Being a second or third tier subcontractor does not eliminate your lien rights. It makes them more complex and makes early action even more important.

When the Answer Is Not Obvious

Some contractors find themselves in both categories on the same project. For example, you have a direct contract with the owner for one scope of work but were also hired by the GC for additional scope. The rules are applied separately to each relationship and each contract.

If you are not sure which category applies to your situation, or if your relationship to the project is more complicated than a simple owner-GC-sub structure, tell us about it. It is one of the first things we sort out, and it shapes everything that comes after.