What your contractor must give you
- A disclosure statement titled “Know Your Rights and Responsibilities Under the Law,” before you sign a residential construction contract.
- A list of subcontractors and suppliers before work starts, updated as new ones are added, unless you waive it in writing.
- A bills-paid affidavit before final payment, showing that everyone has been paid.
Your checklist
| When | What to do |
|---|---|
| Before signing | Read the disclosure; get scope, price, schedule, payment terms and warranties in writing |
| Each payment | Reserve 10% and ask which subcontractors and suppliers will be paid |
| If you get a claim notice | Withhold that amount from the contractor until it’s resolved |
| At completion | Keep the 10% for 30 days; get a bills-paid affidavit |
| Final payment | Collect signed, notarized lien releases before releasing withheld funds |
Extra protection
If you finance the work, ask your title company about a policy endorsement covering liens from work done after the policy is issued. If you receive a lien notice, not every claim is valid; talk to a Texas construction attorney before paying it.
Common questions
Can a subcontractor put a lien on my house if I paid my contractor?
Yes, in Texas a properly noticed subcontractor or supplier can claim a lien. Reserving 10% for 30 days after completion and collecting lien releases limits your exposure.
What is the 10% reserve?
Texas law expects the owner to keep 10% of the contract price or of the value of work completed, during the work and for 30 days after completion. These were called “retainage” before 2022 and are now called reserved funds.
Is this legal advice?
No. It summarizes the Texas Property Code’s homeowner disclosure. For a specific contract or claim, consult a Texas attorney.
Sources
- Texas Property Code § 53.255 (residential disclosure)
- Levelset: Texas retainage vs. reserved funds
- Hinshaw: 2022 changes to Texas lien law
This guide is general information, not legal, tax or financial advice. Rules change; confirm details with the agency named in the sources or a licensed professional.