Texas Construction Law Blog

Before paying their contractors, owners can request what is commonly referred to as an “all bills paid” affidavit. Specifically, Texas Property Code § 53.085 requires any person who furnishes labor or materials for the construction of improvements on real property to provide an affidavit, if requested. Providing the requested affidavit is a condition of payment. The affidavit must state either (1) that the person has paid each of the person’s subcontractors, laborers, or materialmen in full for all labor and materials provided to the person for the construction; or (2) the amount owed and the name and, if known, the address and telephone number of each subcontractor, laborer, or materialman to whom payment is owed.

It is a misdemeanor, punishable by fine and jail time, to intentionally, knowingly, or recklessly make a false or misleading statement in the affidavit. Further, the person signing the affidavit is personally liable for any loss or damage resulting from any false or incorrect information in the affidavit.

The Houston Fourteenth Court of Appeals recently held that this affidavit requirement (and the resulting personal liability) are not limited to final payment affidavits; the statute also applies to sworn monthly payment applications containing affidavits. In Patriot Contracting, LLC v. HERC Solutions USA, LLC, No. 14-24-00395-CV, 2026 WL 2405416 (Tex. App.—Houston [14th Dist.] Aug. 18, 2026, no pet. hist.), the project owner accused its general contractor of submitting three false monthly pay applications. The project owner sued not only its general contractor but also the general contractor’s owner, Stephen J. Friedman, who signed the monthly pay applications. Shortly before trial, the trial court granted partial summary judgment for the project owner, concluding that Friedman had sworn to inaccurate information on three payment applications. The case then proceeded to trial, and the jury awarded $537,855 in damages to the project owner on its Texas Property Code § 53.085 claim against Friedman individually. The trial court rendered judgment holding Friedman jointly and severally liable with the general contractor for those damages.

On appeal, Friedman argued that Texas Property Code § 53.085 creates a private cause of action for inaccurate affidavits for final pay applications only, not monthly pay applications. The Houston Fourteenth Court of Appeals disagreed and affirmed the trial court’s summary judgment on § 53.085 liability. The court concluded: “Had the legislature intended the statute to apply exclusively to affidavits in support of final payments, it could easily have said so. We must not rewrite the statute under the ‘guise of interpretation’.”

The Takeaways

• Before signing a payment application affidavit - whether final or interim - make sure the information is accurate. Standard form contract documents, like the AIA form G702, may include such an affidavit as part of the payment application itself.
• Texas Property Code § 53.085 can impose serious personal civil and criminal consequences for false and incorrect information.
• Owners and general contractors wanting to mitigate lien liability should consider requesting an affidavit under Texas Property Code § 53.085 as a condition for interim and final payments.