Texas Property Code Section 41.002 defines “homestead” as a Property that is used as a home or as a home and a business. If located within an “urban area” (as defined below), a homestead can consist of up to 10 acres of land which may be in one or more contiguous lots, together with any improvements. If located within a “rural area” (as defined below), a homestead may consist of up to 200 acres for a family or up to 100 acres for a single person, which may be in one or more parcels, with improvements.

A homestead is considered to be “urban” if the Property is: (1) located within the limits of a municipality or its extraterritorial jurisdiction or a platted subdivision; and (2) it is served by police protection, paid or volunteer fire protection, and at least three of the following services provided are by a municipality or under contract to a municipality: (a) electric; (b) natural gas; (c) sewer; (d) storm sewer; and (e) water.

For the purpose of mechanic’s liens, homestead status is determined at the time the parties enter into the Contract for improvements. If the Contract is for the construction of a new house or remodel of a pre-existing house, all that is required to make the Property your homestead is a “present intention” for it to be your homestead once construction is completed. However, a person can only have one homestead at a time. As such, if the Property Owner already has a homestead Property at the time the Contract is signed, then the Property to be developed or remodeled would not be a homestead for lien purposes.