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Everything You Need to Know About Texas Mechanic’s Liens Part 4

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When an owner refuses to pay you for the work you have contributed to a project, your options may be limited. Contractors never enter a contract thinking they won’t be paid, especially when they have worked with the owner in the past; nevertheless, there’s no guarantee that the contractor-owner relationship will be completely transparent, and disputes can materialize when you least expect it. When issues arise outside of the project site that affect an owner’s ability to disseminate payments as detailed in the contract, it’s good to know that a Houston contractor attorney can help you acquire the compensation you are due by guiding you through the lien process.

Lien law is varied and complex. As we mentioned in parts one, two, and three, each state has their own filing requirements, and Texas has arguably the most confusing and outright head scratching procedures for perfecting a claim of lien against a defaulting owner. In the last section of this four-part series, we will detail a few additional considerations that every construction professional in Texas should keep in mind before filing a mechanic’s lien. Remember, if you want to ensure that you’re taking the right actions at the right time pertaining to a claim of lien, partner with one of the Houston contractor attorneys at Cotney Law.

Don’t Be Shy About Sending Notices

Remember, although contractors dealing directly with the owner don’t have to send a Notice of Intent to Lien, all other contracted parties do. This includes subcontractors, sub-subcontractors, materials suppliers, and equipment lessors. As a potential claimant, you can’t afford to be shy about sending preliminary notices. There’s a fine balancing act between salvaging a relationship with a potential source of income and being taken advantage of.

Due to the stringent nature of The Lone Star State’s monthly notice deadlines, it’s important to determine early on if you’re going to aggressively pursue a claim of lien or not. If you decide the day before the deadline that you’re DEFINITELY not getting paid, it’s already too late. Preliminary notices shouldn’t be misinterpreted as a warning or threat; instead, clarify that you’re taking precautionary measures to protect yourself and have made it a standard procedure — nothing personal. If the owner insists that payment is “on its way,” your safest bet is to send a preliminary notice before the fifteenth day of the qualifying month anyway.

Consult an Attorney

If you believe a mechanic’s lien will be necessary for you to receive payment for completed work on a construction project, you should consult a Houston contractor attorney to guide you through this process. You want to make sure you’re sending the correct documents within the appropriate time frame to maximize your chances of getting paid. Depending on your specific role in the project, you could be required to supply several documents including:

  • Disclosure Notice
  • List of Subcontractors and Suppliers
  • Notice of Specially Fabricated Material
  • Retainage Notice
  • Two Month Notice
  • Three Month Notice

If you would like to speak with our Houston contractor attorneys, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

The State of Texas is notorious for having some of the most complex and confusing rules regarding mechanic’s liens. If you are a contractor, subcontractor, sub-subcontractor, materials supplier, equipment lessor, or another party who has the right to file a lien against an owner who is withholding payment, your best course of action is to consult a Houston construction lawyer who is well-versed in lien law and can prevent you from making a mistake related to mechanic’s liens.

In parts one and two of this four-part series, the Houston construction lawyers at Cotney Law discussed who can file a mechanic’s lien, who should send preliminary notices before filing a lien, and detailed the specific preliminary notice filing rules for various parties involved in the building process.

Observe Deadlines Before Your Lien is Rejected

All too often, our Houston construction lawyers receive calls from frustrated contractors who have had their liens rejected because they failed to file their lien according to the deadlines outlined in Chapter 53 of the Texas Property Code. To clarify, liens must be filed by the fifteenth day of the fourth calendar month following the day on which the debt accrued. For residential projects, the lien must be filed by the fifteenth day of the third calendar month.

For example, if commercial work is performed in the month of May and goes unpaid, the lien must be filed no later than September 15 or else it will be rejected. Enforcement of the lien in this example would then be required within two years of the last filing day (September 15) or, alternatively, one year from the date of the project’s completion. The later of these two dates will be established as the official deadline for enforcing the lien. Residential projects differ as the deadline extends one year from both the final date of filing and the completion of the project. Once again, which date falls later will be established as the official deadline for lien enforcement.

What About Subcontractors and Suppliers?

For subcontractors and suppliers, mechanic’s liens are required to be filed by the fifteenth day of the fourth calendar month following the day on which the last provision of labor or materials was contributed to the project. Residential projects differ slightly as these mechanic’s liens must be filed by the fifteenth day of the third month instead. The claimant must enforce the lien within two years stemming from the last day they could legally file the lien or one year from the project’s completion. The later of these two days is ultimately the deadline. Once again, there is a slight variance in the deadlines for residential projects — one year from the last day to file or one year from project completion.

To learn some other important facts about mechanic’s liens in Texas, read part four.

If you would like to speak with a Houston construction lawyer, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

In part one of this two-part series, the Houston construction lien attorneys at Cotney Law answered two important questions regarding the use of mechanic’s liens in Texas:

  • Who Can File a Mechanics Lien in Texas?
  • Who Should Send Preliminary Notices?

Now, we will continue to discuss this topic, starting with the specific rules for sending preliminary notices. As we mentioned in the previous section, these notices are only required to be sent by subcontractors, sub-subcontractors, and materials suppliers.

Breaking Down the Rules for Preliminary Notices in Texas

If you’re employed as a subcontractor, sub-subcontractor, material supplier, equipment lessor, or another party who was involved in a project but didn’t contract directly with the owner, you are responsible for sending monthly recurring notices if you want to preserve your ability to file a lien. In many states, preliminary notices and notices of intent to lien are utilized, but Texas is different. In Texas, you will be required to send a two month notice, a three month notice, or both, and these notices are always due on the fifteenth day of the required month. Here’s a breakdown:

  • Subcontractors must send the preliminary notice to the owner and general contractor by the fifteenth day of the second month after the last provision of labor or materials was furnished and subsequently unpaid for residential projects. This notice must be sent every month in which work provisions of labor or materials were supplied. For commercial projects, the deadline is the fifteenth day of the third month.
  • Sub-subcontractors must send the preliminary notice to the owner and general contractor by the fifteenth day of the second and third month in which provisions of labor or materials were furnished and unpaid.
  • Suppliers must send the preliminary notice to the general contractor by the fifteenth day of the second month and both the general contractor and the owner by the fifteenth day of the third month in which provisions of labor or materials were furnished and unpaid.

Filing a Mechanic’s Lien in Texas is a Complex Process

As you’ve probably gathered, filing a mechanic’s lien in Texas is a complex process with an array of variables. In fact, it’s one of the hardest states to file a mechanic’s lien in. If you want to ensure that you’re protecting your lien rights, consult a  Houston construction lien attorney before you decide to file a lien destined for rejection. Our attorneys have helped hundreds of clients get paid when owners outright refused to honor their contracts. We will continue to explore this comprehensive topic in parts three and four.

If you would like to speak with one of our Houston construction lien attorneys, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.

The mechanic’s lien is arguably a contractor’s greatest tool to protect their financial interests when an owner fails to provide proper compensation for provisions of labor and materials. Of course, avoiding the use of a mechanic’s lien is always preferential as contractor-owner relationships often dissolve as a result, but in many instances, there’s simply no other way for contractors to acquire the compensation they are due.

The process of filing a lien can be complex, and liens are often rejected because contractors failed to abide by the rules and regulations governing liens in their specific state. As a result, it’s always best to partner with a Houston construction attorney if an owner is withholding payment. In this four-part article, our Houston construction attorneys will discuss important, state-specific facts about mechanic’s liens in The Lone Star State.

Who Can File a Mechanics Lien in Texas?

General contractors aren’t the only ones who can file a lien. Lien rights in the State of Texas also extend to subcontractors and material suppliers, too. As long as you fall into one of these categories, and you have completed a substantial amount of work pursuant to the contract, you are eligible to file a lien against the owner of the property. One of the more confusing aspects of the lien law in Texas involves potential lien claimants who create materials specifically for a project that can’t be used on another project. These potential claimants may file a lien even if the materials are not utilized for the improvement of a piece of real property as long as they delivered the proper notices. Design professionals also have lien rights in Texas.

Who Should Send Preliminary Notices?

In Texas, general contractors are not required to send preliminary notices before filing a claim of lien against an owner, but the rules for subcontractors, sub-subcontractors, and suppliers differ significantly. In part two, we will discuss the specific rules for each of these parties regarding the use of preliminary notices, which are required in order to file a successful lien.

To learn more about Texas mechanic’s liens, read parts two, three, and four.

If you would like to speak with one of our Houston construction attorneys, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.