WHAT IS A TEXAS MINERAL LIEN?

By: Donald H. Knecht, Jr.

Provisions establishing the creation and enforcement of a Texas Mineral Lien are found in Sections 56.001 – 56.0045 of the Texas Property Code. Essentially, a mineral lien establishes a legal interest in someone else’s mineral property to secure payment for goods delivered or services performed to that property.

Under Section 56.002 of the Texas Property Code, a "mineral contractor or subcontractor has a lien to secure payment for labor or services related to the mineral activities.” Under Section 56.001 of the Texas Property Code, a "mineral contractor” is "a person who performs labor or furnishes or hauls material, machinery, or supplies used in mineral activities under an express or implied contract with a mineral property owner or with a trustee, agent, or receiver of a mineral property owner.” A "mineral subcontractor” is a person who "(A) furnishes or hauls material, machinery, or supplies used in mineral activities under contract with a mineral contractor or with a subcontractor; (B) performs labor used in mineral activities under contract with a mineral contractor; or (C) performs labor used in mineral activities as an artisan or day laborer employed by a subcontractor.”

What Property is Subject to a Mineral Lien?

Under Section 56.003 of the Texas Property Code, the following property is subject to a mineral lien:

(1)   the material, machinery, and supplies furnished or hauled by the lien claimant;

(2)   the land, leasehold, oil or gas well, water well, oil or gas pipeline and its right-of-way, and lease for oil and gas purposes for which the labor was performed or material, machinery, or supplies were furnished or hauled, and the buildings and appurtenances on this property;

(3)   other material, machinery, and supplies used for mineral activities and owned by the owner of the property listed in Subdivision (2); and

(4)   other wells and pipelines used in operations related to oil, gas, and minerals and located on property listed in Subdivision (2).

How Do You Acquire a Mineral Lien?

The steps needed to acquire a mineral lien depend on whether the potential lien claimant is a "mineral contractor” or "mineral subcontractor.”

If the potential lienholder is a "mineral contractor,” the lien must be recorded by filing a "lien claimant’s affidavit” in the county where the mineral lease/well/property is located. This essentially gives notice to the public of the nature and amount of the lien. Additionally, if the potential lienholder is a "mineral subcontractor,” then there is the additional requirement that the property owner be notified before the lien is filed.

How Long Do You Have to File For a Mineral Lien?

Section 56.021 of the Texas Property Code provides that a mineral lien affidavit must be filed with the county clerk in which the property is located "[n]ot later than six months after the day the indebtedness accrues.” In addition, if the potential lienholder is a "mineral subcontractor,” then "[n]ot later than the 10th day before the day the affidavit is filed, a mineral subcontractor claiming the lien must serve on the property owner written notice that the lien is claimed.”

Additionally, Section 56.005 of the Texas Property Code defines when indebtedness under the mineral lien accrues. Under 56.005, if the work is labor performed by the day or week, then it accrues at the end of the week; otherwise "the indebtedness for material or services accrues on the date the material or services were last furnished.” "All material or services that a person furnishes for the same land, leasehold interest, oil or gas pipeline, or oil or gas pipeline right-of-way are considered to be furnished under a single contract unless more than six months elapse between the dates the material or services are furnished.”

What Must a Mineral Subcontractor Include in the Notice of Lien to the Property Owner?

Section 56.023 provides that "A mineral subcontractor's notice to the property owner must include the amount of the lien, the name of the person indebted to the subcontractor, and a description of the land, leasehold interest, pipeline, or pipeline right-of-way involved.” There are many different lien forms that can be found online, but in the long run, it is best to consult with an attorney to make sure that you are filing the proper paperwork and do not lose your lien.

What Must be Included in the Lien Claimant’s Affidavit?

Section 56.003 provides that a lien claimant’s affidavit must include the following:

(1)   the name of the mineral property owner involved, if known;

(2)   the name and mailing address of the claimant;

(3)   the dates of performance or furnishing materials/services;

(4)   a description of the land, leasehold interest, pipeline, or pipeline right-of-way involved; and

(5)   an itemized list of amounts claimed.

Additionally, a mineral subcontractor’s affidavit must include:

(1)   the name of the person for whom labor was performed or material was furnished or hauled; and

(2)   a statement that the subcontractor timely served written notice that the lien is claimed on the property owner or the owner's agent, representative, or receiver.

Again here, err on the side of caution. Seek competent legal advice from a lawyer knowledgeable in Texas Mineral Lien Law so that you don’t run the risk of losing your lien because something was not included or misfiled.

What Other Provisions Must You Be Aware Of?

Under Section 53.158 of the Texas Property Code, a lien must be enforced within two years of the last day to file the original lien affidavit, or within one year after the completion of the work, whichever comes later. If suit is not filed within this time, the property owner can seek to have the lien removed.