Did You Know… The TX Property Code Provides for a Commercial Landlord’s Lien

The Texas Property Code expressly provides for a lien in favor of the landlord of a commercial building. (See Chapter 54, Subchapter B, Section 54.021 et seq.)

The lien protects a landlord who leases all or part of a building for nonresidential use.  It’s a preference lien on the property of the tenant or subtenant in the building for rent that is due and for rent that is to become due during the current 12-month period succeeding the date at the beginning of the rental agreement or an anniversary of that date.  And the lien attaches to the property of the tenant when it is placed in the premises.  This is why lenders that want to make sure that they can secure a loan with a first priority lien on personal property of a tenant will ask landlords to sign a landlord’s lien waiver.

A landlord must file a lien statement with the county clerk of the county in which the building is located to preserve the enforceability of the lien on rent that is more than six months past due.  This lien statement must be verified by the landlord or its agent or attorney and must contain: (1) an account, itemized by month, of the rent for which the lien is claimed; (2) the name and address of the tenant or subtenant, if any; (3) a description of the leased premises; and (4) the beginning and termination dates of the lease.

This lien does not last long — landlords must take quick action.  It exists only while the tenant occupies the building and until one month after the day that the tenant abandons the building.   In essence this means that the lien will stay attached to property removed from the premises by the tenant for one month.

A landlord can apply to the justice of the peace in the precinct in which the building is located for a distress warrant if a tenant owes rent, is about to abandon the building or is about to remove the tenant’s property from the building.  The distress warrant was created to give landlords a summary method of enforcing their statutory liens.  Its purpose is to provide landlords with speedy and effective means of preserving a lien until a lawsuit to foreclose that lien can be filed and prosecuted to judgment.  (See Lincoln Ten, Ltd. v White, 706 S.W.2d 125, 127 (Tex.App.—Houston [14^th Dist.] 1986, orig. proceeding.)