If you live and work in Texas, you’re probably well aware that the construction industry in the state is booming. With several of the country’s largest cities, as well as a vast amount of space, Texas represents a chance for developers and individuals to build homes, commercial projects, public developments, and more.
When a construction project is planned in Texas, contractors are regularly hired to complete the work. Contractors can do things like assembling the physical structure of a building, lay pipes, add finishes, and much more. Because contractors do so much of the critical, physical work that goes into completing a construction project, it’s important that they get paid for their work.
Unfortunately, however, it can happen that contractors in Texas don’t end up getting paid for their work, either through administrative snafus or miscommunications or due to poor financial planning regarding the project. One solution for contractors who don’t get paid for their construction work in Texas is to file a mechanic’s lien.
If you’re a Texas contractor, and you haven’t been paid for work that you’ve completed, you may want to learn about what a mechanic’s lien is and how one could benefit you. Alternatively, if you are in the construction business and you want to arm yourself with a knowledge of how to protect yourself financially, it can help to understand mechanics liens and how they work. Read on to learn the most essential info about mechanic’s liens Texas contractors should know.
What is Mechanic’s Lien?
A mechanic’s lien is a legal claim against property that is generally used by a contractor, subcontractor, or supplied in a construction project that hasn’t been paid for the work that they’ve done. If you’ve provided labor or supplied materials to a construction project in Texas, then you should be paid for what you’ve provided. If not, you can pursue payment by filing a mechanic’s lien.
Mechanic’s liens are filed against the owner of the property, even if you’re a subcontractor who hasn’t been paid by a contractor—but the general contractor has already been properly paid by the property owner. If a mechanic’s lien is placed against your property due to the negligence or bad decisions of a general contractor, you can, in turn, sue that contractor.
How Do You Take Out a Mechanic’s Lien in Texas?
If you live in the state of Texas and you’ve worked on a construction project for which you haven’t been paid, one of your best options is filing a lien. Each state has different laws that allow you to enforce a claim for payment against the property you’ve worked on. The following can help guide your process, according to Texas laws and regulations.
Draft and File your notice.
If you haven’t been paid for your work, you must file an official notice that lets the property owner know that your owed money. This may surprise the property owner, since you may be a subcontractor contracted with a general contractor, not with the property owner himself.
To file the lien, begin by drafting it. Reference local laws and make sure you include all necessary verbiage and information for your situation. For example, residential projects require different language than those who provided fabricated materials. Make sure you are very clear in the notice who you are, who you were contracted by, what work you performed, and what you are owed.
Once it is two months after your work, you can file your notice. You can file a second three months after your work, if your first does not received and adequate response. If your second notice isn’t complied with, you can draft and file your lien.
Draft and File Your Lien
In Texas, once you have filed two notices and have not received a response, you can file an Affidavit of Lien. In this affidavit, you make a sworn statement that outlines your work and claims you haven’t been paid. You name the owner, your employer, the property, and the dates that you sent your notices that weren’t complied with. Finally, you provide all necessary information about yourself, including how you can be contacted, where you work, and what your full legal name is.
If you want your affidavit of lien to be even more powerful, consider including all documentation that supports your claim, like contracts, receipts, correspondence, copies of your notices, and more.
Once your lien is fully drafted, it must be signed, verified under oath, then notarized by a notary public. Only then is it ready to be served as a lien to the property owner.
If you want some guidance filling out the paperwork related to your lien, check out this helpful guide to the mechanic’s lien form here.
Make sure the lien is served.
The lien must be served to the property owner within 5 days of your filing it. This means that it must be delivered to them so that you know that they received it. Send it by certified mail that requires a signature. That way, when they’ve signed for the mail, you’ll know that they’ve gotten it.
Wait for the lien to be paid, or take legal action.
Once the lien is served, you can simply wait for it to be paid. The owner may simply pay you the money, or you may have to wait until the owner and contractor work out a disagreement between the two of them. If you’re paid, there’s no further action you need to take and you can enjoy being properly compensated for your work and goods.
If you’re not paid, you’ll have to take legal action against the owner of the property. According to Texas law, you have between one and two years to enforce your lien.
Tips for Taking Out a Mechanic’s Lien in Texas
Determine if you’re qualified to file a mechanic’s lien.
You are qualified to file a mechanic’s lien if you’ve furnished labor, materials, supplies, or designs for a project. Determine whether you fit into one of these categories before you decide whether you are going to file a lien or not.
Make sure you know the statutory requirements for the contents of the lien.
Before you file a lien, make sure you are well aware of the statutory requirements for the contents of the lien. Have you given the contractor adequate time to pay you, and have you filed the lien within a timely manner? For example, specifically in Texas, a lien notice must be filed by “the 15th of the fourth calendar month after the day on which the indebtedness accrued or the third month for a residential project.” Educate yourself about the statutory requirements like these to ensure that filing a lien is a smart and legal move to help you obtain payment.
Learn about your county’s specific requirements.
In Texas, each county has specific requirements about filing a mechanic’s lien. These are nitpicky, tangible things like paper size, margin size, color of paper, and more. Make sure you learn about all of these and comply with them. Otherwise, you’ll have to revise your affidavit of lien and file it all over again.
Consult with an attorney who is an expert in construction law.
Filing a lien is a complicated process, and you’ll want guidance from someone who understands how they work and what the laws and regulations are, particularly specific to your state. To get proper guidance, find an attorney who is an expert in Texas construction law, like the Smiley Firm. A firm like the Smiley Firm, who has extensive experience working in construction law and business litigation will know the ins and outs of the process, and they’ll walk you through it every step of the way so you not only approach the process correctly, but also so that you end up with the outcome you expect and deserve.
Getting Paid For Your Work as Texas Contractor: Filing Mechanic’s Liens Properly
Doing work as a contractor in Texas can be grueling and tough. So, you should be sure that you get paid for any labor you provide, and that you’re compensated for any supplies that you give to a project.
However, sometimes, you don’t get paid as you’d hoped (or as set out in your contract terms), and it’s necessary to take further steps. Before you do, consult with an expert in construction law, like the attorneys at the Smiley Firm. Construction law specialists know all the nitty-gritty, ins-and-outs of mechanic’s liens, including when you need to serve notices, how long you have to file a lien, how to best file a lien, what to include in your affidavit, what to do if you still don’t get paid, and more.
By having a standout construction attorney on your side, you can minimize the stress associated with the process, and ensure you’re simply doing what’s legal and fair to get the compensation that you deserve for your work.