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Banking, Business and Contracts No. 01-1122, 4/3/2003. Click here for the full text of this decision FACTS: Texas Property Code Chapter 53 permits a construction subcontractor to claim a lien on funds retained by the owner if the subcontractor “1. sends the notices required by this chapter in the time and manner required; and 2. files an affidavit claiming a lien not later than the 30th day after the work is completed.” In this case, the owner terminated the general contractor and hired other contractors to complete the project. The question before this court is when, in fulfilling the affidavit requirement of the statute, “work” is completed. The subcontractor here filed its affidavit 31 days after the original contract was terminated but well before subsequent contractors finished the project. The court of appeals held that work is completed when the requirements of the initial contract are finished, either by the first contractor or by subsequent contractors. HOLDING: Reversed and rendered. The Texas Property Code requires owners to retain either “10 percent of the contract price of the work to the owner” or “10 percent of the value of the work . . . using the contract price or, if there is no contract price, using the reasonable value of the completed work” for “30 days after the work is completed.” �53.101. These retained funds “secure the payment of artisans and mechanics who perform labor or service,” including subcontractors such as Structural Wood. �53.102. A subcontractor or other claimant who wants to make a claim on that retainage must properly give notice and file “an affidavit claiming a lien not later than the 30th day after the work is completed.” �53.103. The period during which a claimant can and must file a lien affidavit under �53.103 is therefore the same period that an owner can and must hold retainage under section 53.101 – 30 days after the completion of work. It is consequently in the best interest of all construction participants to know when the 30-day period terminates – the owner so that it can release the remaining funds, the original contractor so that it can budget for its final payment, and the claimant so that it can file the lien affidavit before that date. To determine when the 30-day period ends, the court looks to the statutory definitions of “work” and “completion of an original contract.” The Property Code provides that ” ‘[c]ompletion’ of an original contract means the actual completion of the work, including any extras or change orders reasonably required or contemplated under the original contract . . . .” �53.001(15). The code defines “work” as “any part of construction of repair performed under an original contract.” �53.001(14). The parties’ statutory interpretations focus on different words within these definitions. The court concludes that the construction contract and the work performed thereunder are complete at the time that the contract is terminated or abandoned, so that the lien affidavit must therefore be filed within 30 days of the contract’s termination. Structural Wood’s affidavit was not timely filed in this case, as it was filed 31 days after termination of the construction contract. OPINION: Phillips, C.J.; Hecht, Owen, O’Neill, Schneider, Smith and Wainwright, JJ., join. DISSENT: Enoch, J.; Jefferson, J., joins. “Because I agree with the court of appeals that Structural Wood was not required to file its lien until thirty days after the work contemplated under the original Sepolio contract was actually completed, I respectfully dissent.”

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