Statutory Liens

Under the Texas Property Code certain persons are given statutory priority liens to secure payment to them in connection with construction.  [TPC § 53.01 et seq.]  These include persons who furnish labor or materials for construction and the architect, engineer or surveyor who prepares a plan or plat in connection with the proposed construction.  The Bank should request a subordination agreement from the general contractor and architect before construction begins and require the borrower or general contractor to deliver to the Bank affidavits as to payment from all subcontractors, laborers and materialmen prior to the final draw on the loan.  A General Contractor’s Consent and Acknowledgement and Architect’s Consent and Acknowledgement can be used for this purpose.  Sample forms are located at the end of this Chapter.  These forms contain both a subordination of lien and a consent to the borrower’s assignment to the Bank of the underlying construction contract and Architect’s Agreement.