Can You Sell a House With a Contractor's Lien on It in Texas?

Yes, you can sell a house in Texas with a contractor’s lien on it, but you cannot close with that lien still attached. A contractor, subcontractor or supplier who says they were not paid can file a lien affidavit with the county clerk, and it shows up in the buyer’s title search. Before the title company insures the buyer’s title, the lien has to be paid off, released, bonded around or removed by a court.

So the real question is not whether you can sell. It is which of those four routes fits your situation, and how much time it needs. Start early. A lien found the week of closing is how a sale slides.

How a Lien Ends Up on a House

In the Houston area, this usually starts with a repair after a storm. A roof, a fence, a foundation job or a remodel. The homeowner disputes the work or the bill, or pays the general contractor, who never pays the roofer or the lumber yard. Under Texas law, that unpaid party can file a claim against the property itself.

Texas rewrote much of its lien statute in House Bill 2237, which took effect January 1, 2022, and applies to original contracts signed on or after that date, per Hinshaw’s summary of the changes. For residential work under those contracts, the deadline to file a lien affidavit generally falls on the 15th day of the third month after the month the work was finished. Older contracts can follow the older rules.

Homesteads Get Extra Protection

If the house is your homestead, a contractor has to clear a higher bar. Under Texas Property Code Section 53.254, a lien on a homestead needs a written contract signed before any labor or materials were furnished. If the owner is married, both spouses have to sign, even if only one is on the title. The contract also has to be filed with the county clerk.

That matters a lot when you sell. A lien on a homestead that was never backed by that kind of signed, filed contract may not be valid at all. That is a question for a real estate attorney, not a guess, but it is the first thing we would ask about.

The Four Ways to Clear It Before Closing

When a lien shows up on a title commitment, the options are these:

1. Pay it from the sale. The title company pays the claimant from your proceeds at closing in exchange for a signed release of lien, which gets recorded. This is the most common route when the debt is real.
2. Negotiate a release. If the amount is in dispute, a settlement for less, in writing, with a release signed before closing, clears the title.
3. Bond around it. Texas law lets an owner file a bond that moves the claim off the property and onto the bond. The house can then sell while the dispute continues.
4. Challenge it. A lien that missed a deadline, a notice or the homestead rules can be removed through a court process. The claimant also has a limited time to sue to enforce it.

Whichever route you take, get the release, bond or court order in front of the title company early. Ask your escrow officer exactly what they need to see. They are the ones who decide whether the title is insurable.

What We Tell Sellers

Peter’s background in construction and lending means he reads a contractor dispute the way a lender does: what was promised in writing, what was paid, and what the paperwork actually supports. Here is what we would do if this were our house. Before you list, pull a copy of anything recorded against the property from the county clerk. If a lien is there, sort out which route you are taking before the first showing, not after the buyer’s title commitment arrives.

Sellers also have to handle it in the paperwork. Our guide to the Texas Seller’s Disclosure Notice covers what goes on that form. If the dispute is with your HOA instead of a contractor, our piece on selling a house with an HOA lien in Houston covers that version. And if the work in question was never permitted, read selling a house with unpermitted work in Texas too, because the two often travel together.

This is general information, not legal advice. A lien dispute is a good reason to bring in a Texas real estate attorney early. The Move Live Love TX Team™ is a husband-and-wife real estate team with CB&A, Realtors, serving Houston and the surrounding areas.

Frequently Asked Questions

Can you sell a house in Texas if a contractor filed a lien on it?

Yes. You can list it and accept an offer, but the lien shows up in the buyer's title search, and the title company will require it to be paid, released, bonded around or removed before it insures the buyer's title and closes the sale.

Can a contractor put a lien on a homestead in Texas?

Only if the rules for homesteads were followed. Under Texas Property Code Section 53.254, the contractor needs a written contract signed before any work or materials were furnished, signed by both spouses if the owner is married, and filed with the county clerk.

Can the lien be paid at closing out of my sale proceeds?

Usually, yes. The title company can pay the claimant from your proceeds in exchange for a signed release of lien, which is then recorded. Get the payoff amount and the release terms agreed in writing well before closing day.

What if I think the contractor's lien is invalid?

You can challenge it. Texas law gives owners a way to ask a court to remove a lien that does not meet the statute's requirements, and it lets an owner file a bond so the claim moves off the property. Talk with a real estate attorney before you choose either route.