In short
- Unpaid subcontractors and suppliers can claim a lien on your property even when you paid your builder in full.
- Hold back 10% of the contract price during the build and for 30 days after the work is complete (Texas Property Code 53.101).
- Get a signed lien waiver from the builder, and from major subs and suppliers, with every payment.
- On a homestead, the written contract must be signed before work starts and filed with the county clerk (53.254).
- Pay a Texas construction attorney to review the contract; it costs little against a six-figure build.
On this page
- How can a sub I never met put a lien on my land?
- What does the 10% holdback look like in dollars?
- Which lien waiver do you ask for, and when?
- A simple payment routine that creates a paper trail
- Homestead land has an extra contract rule
- Questions to ask a builder about payment
- Red flags when money is involved
- If a lien notice or defect arrives
- Official sources to confirm
- Next step
- Frequently asked questions
If you are hiring a builder, the biggest financial trap is not the price; it is paying someone who then fails to pay the crews and suppliers behind them. Texas lien waivers for a barndominium are the paper that shuts that door. Our guide to choosing a builder says to ask for them. This page explains how they work.
Not legal advice. We are a referral service, not a builder or a law firm. Chapter 53 of the Texas Property Code was amended effective January 1, 2022, so older online guides can be out of date. Confirm every point below with the statute and a Texas attorney.
How can a sub I never met put a lien on my land?
A barndominium goes up with many hands: the slab crew, steel erector, framers, electrician, plumber, insulation, and the suppliers behind them. You pay the builder; the builder pays them. If that last step fails, Texas law lets an unpaid sub or supplier pursue a lien on the property that was improved.
The holdback is the owner's safety net. Texas Property Code 53.101 says the owner must reserve 10% of the contract price (or 10% of the value of the work) during construction and for 30 days after completion. How exactly the 30 days is counted is not simple, which is a reason to have an attorney write it into your contract.
What does the 10% holdback look like in dollars?
The math is simple. This table uses made-up round contract prices only to show the arithmetic; it is not a cost estimate for your build.
| Example contract | 10% to hold back | Paid at closing |
|---|---|---|
| $250,000 | $25,000 | $225,000 |
| $400,000 | $40,000 | $360,000 |
| $600,000 | $60,000 | $540,000 |
Plan for it. If you use a construction loan, tell the lender and builder about the holdback before the first draw. Our financing overview covers how draws work. Builders often push back on a full 10% hold, so get the terms agreed in the contract, not at the end.
Which lien waiver do you ask for, and when?
Texas prescribes statutory waiver forms in Property Code 53.284. A waiver that does not substantially follow a statutory form may not be enforceable (53.282). Unconditional waivers cannot be demanded until the payment has actually been received in good funds (53.283). There are four forms, and the difference is in the timing.
| Form | What it says | Use it when |
|---|---|---|
| Conditional, progress | Lien rights waived once this payment clears | You hand over a draw check |
| Unconditional, progress | Paid; lien rights for that period are gone | The prior draw has cleared |
| Conditional, final | Lien rights waived once final payment clears | You hand over the last check |
| Unconditional, final | Paid in full; no further lien rights | After the final check clears |
Do not accept a handwritten note or an email that says "paid". Under the statute the waiver generally needs to be in writing, signed by the person giving it, and may need notarization depending on the form. Check the current form language before you rely on one.
A simple payment routine that creates a paper trail
- Contract first
Have an attorney review the contract, including the holdback, draw schedule and change-order process, before signing.
- Each draw: conditional waiver in, check out
Collect the builder's conditional progress waiver, then pay by check or traceable transfer.
- Next draw: unconditional waiver for the last one
Before paying the next draw, collect the unconditional waiver for the payment that already cleared.
- Ask for a list of subs and suppliers
Names of the slab, framing, steel, electrical, plumbing and roofing companies, so waivers can come from them too.
- Hold the 10%
Release it only after the holdback period, final waivers, and a clean final inspection.
- Keep the file
Contract, change orders, draw requests, waivers, inspection reports and permits in one folder.
Homestead land has an extra contract rule
If the barndominium will be your homestead, Texas Property Code 53.254 sets conditions before a contractor can get a lien. The contract must be in writing and signed by you and the contractor before work or materials begin. If you are married, both spouses must sign. The contract must also be filed with the county clerk where the property sits. Ask a Texas attorney or your title company how this applies to your lot.
- Signed contract before any dirt is moved or material delivered.
- Both spouses' signatures, if married.
- Recorded with the clerk of the county where the land sits (Smith County Clerk for Tyler-area parcels).
- Lender informed, since the lender will have its own lien and paperwork.
Questions to ask a builder about payment
- Will you provide statutory lien waivers with every draw, and from your subs and suppliers?
- Do you agree to the 10% holdback and to the release date in writing?
- Can I see the list of your subs and suppliers, and have you paid them to date?
- Will you provide a certificate of insurance and builder's risk coverage (see permits and lender requirements)?
- How are change orders priced, signed and paid?
- Who pulls each permit, and will I get copies of inspection records?
- What is your written warranty, and who do I call after move-in?
Red flags when money is involved
Warning signs
- Pressure to pay a large deposit before a signed contract
- Refusal to give waivers or a sub list
- Cash only, or checks written to a person
- Draws that run ahead of finished work
Good signs
- Draws tied to completed stages and inspections
- Waivers offered before you ask
- Written change orders, every time
- Insurance certificate sent by the insurer or agent
If a lien notice or defect arrives
Do not ignore a notice from a sub or supplier. Under 53.254 the paperwork for a homestead lien has to carry specific warnings, and the notice you receive is the moment your holdback and payment records matter. Talk to a construction attorney before you pay anyone twice.
For defects after completion, Property Code Chapter 27 sets up a pre-suit process that starts with written notice to the builder and a chance to inspect and offer repairs. Deadlines are strict and have changed over time, so check the current statute and keep your records.
Official sources to confirm
- Texas Property Code Chapter 53 (mechanic's liens), Texas Legislature
- Texas Property Code Chapter 27 (Residential Construction Liability Act)
- Section 53.254 (homestead contract), text with amendment history
- Smith County Clerk, for recording the contract
Next step
Before you sign anything, line up two or three builders and compare how each handles payment, waivers and holdback. Use the form below and tell us where the land is; independent local builders may reach out. We refer you; we do not build and we are not your attorney. See also our build checklist.
Frequently asked questions
What is a lien waiver in Texas?
It is a signed statement from a contractor, subcontractor or supplier that they have been paid (or will be, on a conditional waiver) and give up lien rights for that amount. Texas Property Code Chapter 53 sets statutory forms, and a waiver that does not substantially follow them may not be enforceable. Have an attorney confirm the current forms.
Can a subcontractor put a lien on my barndominium if I paid my builder?
It can happen. Texas law gives unpaid subs and suppliers lien rights against the property, limited by how much you held back and whether you paid after receiving written notice of a claim. The 10% holdback and waivers are the main defenses. This is general information, not legal advice.
Do I have to record my construction contract with the county clerk?
For a homestead, Texas Property Code 53.254 requires a written contract signed before work starts, signed by both spouses if you are married, and filed with the county clerk of the county where the property sits. Without it, a contractor generally cannot get a lien on the homestead. Ask a title company or attorney how it applies to your land.
Does a builder need a license in Texas to build my house?
Texas does not have a general state license for home builders. Trades such as electrical, plumbing and HVAC are licensed, so verify those with the state. Do not treat a business card as proof of insurance or licensing.
What if my builder walks off and the work is defective?
Texas has a pre-suit process for defect claims under Property Code Chapter 27, which includes written notice to the builder and a chance to inspect and offer a repair. Deadlines are strict, so talk to a construction attorney quickly and keep every document.