Filing an improper or fraudulent mechanic’s lien can often bring on harsh consequences. In these instances, a contractor would have been better off not filing at all. But a contractor that has lien rights and fails to file may not be able to afford to stay in business. As a Texas contractor, you shouldn’t be afraid of exercising their lien rights, which is why we’re here to better explain the process.
In part one of this article, a Houston construction lien attorney at Cotney Law discussed the key differences between an invalid and a fraudulent mechanic’s lien. Now, we will be discussing the consequences of improperly filing a mechanic’s lien and the steps you can take to protect your lien rights.
Penalties and Consequences
After investing thousands of dollars defending your lien rights, the last thing you want to hear is that your lien is invalid. While no laws have been broken, contractors that file invalid liens are leaving themselves exposed and could end up paying damages to undeserving owners.
A fraudulent lien, on the other hand, comes with a slew of legal penalties. Those that file a fraudulent lien are liable to injured parties for the following:
- The greater of $10,000 or actual damages
- Court fees
- Attorney fees
- Additional damages to be determined by the court
In addition, failing to release a fraudulent lien is a Class A misdemeanor in the State of Texas. If found guilty, an offender can be fined $4,000 and receive a prison sentence of up to one year.
Consult a Lien Attorney
What’s the difference between an invalid lien and a fraudulent lien? The consequences for filing an invalid lien can hinder your career, while the penalties for filing a fraudulent lien can end your career. It is imperative that contractors follow Texas lien law to the letter. This requires you to know not only how to exercise your lien rights but also when you actually have lien rights.
Knowing when and how to properly file a mechanic’s lien can be done with the aid of a Houston construction lien attorney at our Texas law office. Only then can you guarantee that deadlines are being adhered to and notifications are being submitted accordingly. To ensure that your mechanic’s liens are filed properly and that your lien rights are secured, partner with our team of experienced and aggressive Houston construction lien attorneys at Cotney Law.
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.