When you work as a subcontractor in the construction industry, there are lots of hazards of the job. This is particularly true if you work in Texas.
First, there are the physical demands of the job. You must be able to complete the work at hand and stay safe. You must also be sure that your employees or helpers stay safe and uninjured.
Next, the Texas climate can be difficult for working. The heat of a Texas summer can be painful—and even dangerous—to subcontractors, who must complete physical labor in the daytime sun.
Additionally, subcontractors must be able to get along well with contractors, since contractors control the work distributed, and they also manage payments.
If you are a subcontractor who is supposed to be paid by a contractor or by a property owner who hired you to work on a construction project, you should be paid in a timely and expedient manner. You should also be paid the amount of money that you’re owed.
Unfortunately, however, it can happen that contractors don’t get paid for work. A project may encounter financial troubles, which results in a property owner not being able to afford the work done. Or, you may end up working for a contractor who didn’t manage money well and doesn’t have the money paid by the property owner to him to give to you.
At the end of the day, there are legal steps that you can take to make sure that you’re paid fairly. One of them is a mechanic’s lien.
A mechanic’s lien allows a subcontractor to take out a lien against the property they’ve worked on. This gives them ownership of the property or some of the property until they are repaid in full.
The mechanic’s lien process in Texas is a complex one. The first step in the process is letting the property owner or contractor know that you haven’t been paid. You must do this before you take out a lien, so that you give the people who owe you fair warning about the debt and an opportunity to pay you back.
If you’ve let the property owner know he owes you money and he does nothing, you can move forward with official steps.
The first official step to take is delivering a formal, official notice that you’re planning to take out a lien if not paid. Here is everything you need to know about preliminary notices in Texas, including state-specific rules and specifications. It’s important to learn more about Texas preliminary notices, because the state has arguably the most complex and hard to understand laws regarding mechanic’s liens and preliminary notices of any state in the country.
So, What is a Preliminary Notice?
You have to file a preliminary notice in the mechanics lien process in order to let the person who has not paid you know that they have not paid. You can send a preliminary notice if you have not been paid for work you’ve done, or if you have not been paid for materials you’ve supplied.
The purpose of the preliminary notice is both to be fair to the person who owes the money and to encourage them to make payment so the lien process does not move forward.
If you want to file a mechanic’s lien for non payment on a project, you must file a preliminary notice first.
The good news is that preliminary notices often work. In fact, a study by Levelset showed that 47% of all debts were paid within 20 days of delivery of the preliminary notices. This means that notices encourage people to pay and help avoid lengthier and more unpleasant legal processes related to the mechanic’s lien.
State-Specific Information about Preliminary Notices for Texas
Texas has some very specific guidelines and requirements when it comes to preliminary notices. They even have notices specific for things like specially fabricated materials and retainage notices!
First, if you want to supply a notice to the proper parties and you’re a subcontractor, you should send a notice to both the property owner and the contractor.
Also, there are multiple times of notices that you can send in Texas.
The first is a start of project note. This notice is sent at the beginning of a project, once.
Alternatively, to file a mechanic’s lien in Texas, you may be required to send monthly notices for every month that you work. This protects your right to file for a lien for all of the work that you do throughout the duration of a project.
These monthly notices must be sent by the 15th of the month two-three months after each month that you work. If you’re a contractor or a sub-contractor, you can send the notice two months after non-payment. If you’re a sub-subcontractor, though, you must send the notice two months after non-payment and then again 3 months after non-payment.
Texas requirements for preliminary notices are complicated. Here is a breakdown of the basic rules:
- General contractors: Must file a preliminary notice to the owner if working on a residential project, but don’t need to file a notice if working on a non-residential project.
- 1st Tier Sub-Contractors: For a residential project, must file a preliminary notice to the owner and general contractor by 2 months after the work was done. For a non-residential project, must file a notice to general contractor and owner within 3 weeks of completing the work.
- All sub-subcontractors: For residential projects, must file a notice to owner and general contractor within 2 months of work. For non-residential projects, must file a notice to general contractor within 2 months of finishing work, and must file a notice to general contractor and owner by within 3 months of finishing work.
Tips for Preliminary Notices in Texas
If you are going to need to deliver a preliminary notice in Texas, keep the following helpful tips in mind.
Just because your notice is due on the 15th of the month 2-3 months after the work is done, you don’t need to wait until the day of. Prepare your notice early, then wait until a few days before it’s due. You can give people ample time to pay, but you don’t want to have to rush or scramble to get your preliminary notice delivered on time.
Deliver the Notice by Registered or Certified Mail
When you prepare a lien notice in Texas, you’ll need to deliver it either to the general contractor, the property owner, or both. Lien notices feel oppositional, so they may not want to be received or opened by the person you’re sending them to. You can use regular mail to send the notice, as long as it is certified mail or registered. If you send them by registered or certified mail, then they are considered legally delivered.
If you want to deliver the preliminary notice by hand you can, but it is not required in order to officially have the notice considered delivered. Texas State Law 53-003(b) states:
“Any notice or other written communication may be delivered in person to the party entitled to the notice or to that party’s agent, regardless of the manner prescribed by law.”
Send Two Preliminary Notices at Once
There’s not rule prohibiting you from delivering a preliminary notice early. So, if you are a sub-subcontractor who must deliver two notices: one two months after the work was done and one three months after the work was done, consider sending both at once (at the 2-month mark). This will take care of your two notice requirement and ensure you notify an owner adequately before moving forward with the process.
Don’t Be Afraid to Send a Preliminary Notice
There may be a chance that you’ll never want to take out a mechanic’s lien. However, you still want to get paid. You can send a preliminary notice (or multiple) and never move to take a lien out after that. Preliminary notices simply up the chance you get paid, but they don’t make you legally obligated to take any other actions.
Consult an Attorney
An attorney can help you craft a good preliminary notice. Construction attorneys have the knowledge to write a notice that will encourage contractors or owners to pay up. Also, attorneys help in a state like Texas because the requirements are so complex. Further, if you don’t meet all legal requirements, your notice won’t hold up and you won’t legally be able to file a lien. An attorney can make sure you do everything right so that you’re able to make your legal claim to money that you’re owed.
If you are a subcontractor and you want to be paid for the work that you’ve done for a project, consider consulting with an attorney who specializes in construction law. Not only will a construction attorney be able to help you understand where you stand legally, he will also be able to apply his in-depth knowledge of all parts of the mechanic’s lien process, including how to properly craft and deliver a notice before the whole process gets started. Get in touch with the Smiley Law Firm today if you’re ready to learn more.