Payment Bond Claims on Texas Public Projects: How to Collect When You Can't Lien the Property

By Hank FasthoffJuly 5, 2026

You can't file a mechanic's lien against government-owned property. On a private project, an unpaid subcontractor or supplier perfects a lien under Texas Property Code Chapter 53, and the lien attaches to the property itself, forcing the owner to address the claim before selling or refinancing. On a public project, that remedy doesn't exist. Government property is immune from mechanic's liens.

Payment bonds substitute for lien rights. Texas Government Code Chapter 2253 (sometimes called the Texas "Little Miller Act") requires prime contractors on public works projects to obtain a payment bond for the benefit of subcontractors, suppliers, and laborers. If the prime contractor doesn't pay, the surety that issued the bond owes the money instead. But recovering on a payment bond requires strict compliance with notice deadlines and procedures, and missing any of them can forfeit your claim entirely.

When a Payment Bond Is Required

Chapter 2253 requires a payment bond on any public works contract exceeding $25,000 ($50,000 for municipalities). For contracts exceeding $100,000, both a payment bond and a performance bond are required, each in an amount equal to the total contract price. Bonds must be issued by a corporate surety authorized to do business in Texas.

If a governmental entity fails to require a bond on a project that qualifies, and a subcontractor or supplier goes unpaid, the subcontractor may have a claim directly against the governmental entity for the amount that would have been covered by the bond. Obtain a copy of the payment bond before you start work on any public project. If the prime contractor can't produce one, contact the governmental entity to confirm whether a bond was issued and obtain a copy.

Who Can Make a Bond Claim

Payment bond beneficiaries include subcontractors, sub-subcontractors, suppliers, and laborers who have a contractual relationship (direct or indirect) with the prime contractor or a subcontractor to furnish labor or materials for the public project. If you supplied materials to a subcontractor who was hired by the prime contractor, you're a payment bond beneficiary.

First-tier claimants (those with a direct contract with the prime contractor) and lower-tier claimants (those without a direct contract with the prime) are both entitled to claim against the bond, but lower-tier claimants have additional notice requirements that first-tier claimants don't face.

Notice Requirements for All Claimants

Every payment bond beneficiary, regardless of tier, must send a written notice of the claim to the prime contractor and the surety. Under § 2253.041(b), this "third-month notice" must be mailed on or before the 15th day of the third month after each month in which the claimed labor was performed or materials were delivered.

If you performed work in January, your third-month notice is due by April 15. If you performed work in both January and February, you need a separate notice for each month's work (January notice due by April 15, February notice due by May 15). You must send a notice for each month in which unpaid work was performed, not a single cumulative notice at the end of the project.

When a written agreement exists between you and the prime contractor (or between you and your subcontractor), the notice must include a sworn statement of the amount claimed based on the agreement. When no written agreement exists, the notice must include the name of the party for whom the work was performed, the approximate date of performance or delivery, a description of the labor or materials, and an itemized accounting with copies of invoices or orders that reasonably identify the work.

Notices must be sent by certified or registered mail. Notices to the prime contractor must be mailed to the contractor's residence or last known business address. Notices to the surety must be mailed to the address stated on the bond, the address on file with the Texas Department of Insurance, or any other address allowed by law.

Additional Notice for Lower-Tier Claimants

If you don't have a direct contractual relationship with the prime contractor (meaning you're a sub-subcontractor, a supplier to a subcontractor, or any other lower-tier party), you must also send a "second-month notice" to the prime contractor under § 2253.047(c).

This notice must be mailed on or before the 15th day of the second month after each month in which you performed labor or delivered materials. If you furnished materials in January, this notice is due by March 15. A copy of the statement sent to your subcontractor is sufficient for this notice, but best practice is to include a sworn statement of account with every notice.

Lower-tier claimants must satisfy both the second-month notice (to the prime contractor) and the third-month notice (to both the prime contractor and the surety). Missing either one can forfeit the bond claim.

Filing Suit on the Bond

If the surety doesn't resolve your claim after you've sent proper notices, you can file suit against the prime contractor and the surety, jointly or severally, on the payment bond. Under § 2253.073, you can file suit on the 61st day after the date you mailed the required notices.

You must file suit within one year from the date the last notice was mailed. § 2253.078. If you miss the one-year deadline, your right to sue on the bond is extinguished, regardless of how valid your underlying claim is.

If you prevail, you can recover the unpaid amount for labor or materials, court costs, and reasonable attorney's fees. § 2253.073(b).

Venue for a suit on a Chapter 2253 bond lies in a court of competent jurisdiction in the county where the public project is located.

Federal Projects and the Miller Act

Federal construction projects are governed by the Miller Act (40 U.S.C. §§ 3131-3134) rather than Chapter 2253. Payment bonds are required on federal contracts exceeding $100,000.

Miller Act bond claims are simpler than Chapter 2253 claims. First-tier subcontractors (those with a direct contract with the prime contractor) don't need to send any notice before filing suit. They can file suit directly on the bond. Second-tier and lower claimants must send one written notice to the prime contractor within 90 days after the last date they furnished labor or materials. That's the only notice required on a federal project.

Suit on a Miller Act bond must be filed in the U.S. District Court for the district where the project is located, no earlier than 90 days after the notice is sent and no later than one year after the last date labor or materials were furnished.

Federal bond claims don't protect every claimant in the chain. Under the Miller Act, only first-tier and second-tier claimants have bond rights. If you're a third-tier supplier (a supplier to a supplier to a subcontractor), you can't claim against the Miller Act bond. You'd need to look to the subcontractor's own bond (if one exists) or pursue a breach of contract claim against the party you contracted with.

Key Differences Between State and Federal Bond Claims

Chapter 2253 requires monthly notices for each month of unpaid work and imposes separate notice deadlines for first-tier and lower-tier claimants. Miller Act requires a single notice within 90 days of last furnishing, and only for second-tier and lower claimants.

Chapter 2253 requires notice to both the prime contractor and the surety. Miller Act requires notice only to the prime contractor.

Chapter 2253 allows suit on the 61st day after notice is mailed. Miller Act allows suit after 90 days from notice.

Chapter 2253 requires suit within one year of the last notice. Miller Act requires suit within one year of last furnishing labor or materials.

Chapter 2253 claims are filed in state court. Miller Act claims are filed in federal district court.

Practical Recommendations

Obtain a copy of the payment bond before you start work. Identify the surety, confirm the bond amount, and note the surety's address for future notices. If no bond exists and the contract exceeds $25,000, the governmental entity may have failed its statutory obligation, and you may have a direct claim against the entity.

Send notices for every month in which you perform unpaid work. Don't wait until the project is finished to send a single notice. Chapter 2253 requires a separate notice for each month's unpaid labor or materials, and each notice has its own deadline. Calendar every deadline from the first month you furnish labor or materials.

Send notices early. If payment is late, don't wait until the 15th of the third month. Send the notice as soon as you know you're not being paid. Early notice preserves your rights and signals to the prime contractor and surety that you're protecting your claim.

Include a sworn statement of account with every notice. Even where the statute permits a simpler accounting, a sworn statement strengthens the claim and eliminates a potential basis for the surety to challenge the notice.

Don't assume the prime contractor will pay eventually. Public project payment disputes are common, and sureties are professional claims-handling organizations. They'll look for any procedural defect in your notice to deny the claim. Perfect your claim from day one and treat every notice as if it's going to be reviewed by the surety's attorney, because it will be.

If the surety doesn't respond within 61 days, consult with a construction attorney about filing suit. You have one year from the date of your last notice, and the clock doesn't stop while the surety evaluates your claim.