Important thingsTo learn about

construction mechanics liens

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If you live in Texas, you might have noticed the construction industry’s booming growth. With vast space and network, there are plenty of opportunities for developers and individuals to build homes, commercial and public projects.

In construction, contractors get hired to perform work. Unfortunately, payment does not always flow timely, sometimes it doesn’t even come at all. When this happens, contractors have a resource to use which is a mechanics lien. Mechanics liens were designed to prot4ect contractors and they are filed against a property title.

Although this document is used extensively in the construction industry. It is not always used correctly or within the specific deadlines stipulated by law.

To protect yourself financially, it is useful to learn a few things that can help you understand how, when and in which way they work.

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Construction Mechanics Liens

A mechanics lien (also called construction lien) is a legal claim for a certain amount against the real property of the project. It is a document used by contractors, sub-contractors and all kind of suppliers that have delivered services or materials to a construction project and haven't been paid for the work performed.

A construction lien attaches to the property title and it becomes difficult or impossible to sell or refinance such property without paying off the lien claims first.

Since they attach to the property title, they must be filed in the Official Property Records of the county the project is located, and unfortunately, even if the project owner fully paid the general contractor, if he/she did not pay the subcontractors below they have the right to file a lien. When this happens, the owner can file a lawsuit against the general contractor, but the lien claim must still be paid.

How can you file mechanics lien in Texas?

Every state has a different requirements to file liens. In Texas, the requirements change based on the type of project and the role the contractor has in it.

For commercial projects, all subcontractors and sub-subcontractors must first send a prelien notice to the general contractor and the project owner(s). This notice should include the project information and the description of the work and amount owed and it should be sent within pre-set deadlines. If the owner has not sent final payment to the general contractor, this notice gives him the right to withhold funds and pay the subcontractor directly first.

General contractors are not required to send a prelien notice, they can file a mechanics lien directly.

When the prelien notice is not enough to get the payment. The next step is to file a mechanics lien against the property.

Drafting and Filing Your LienA construction lien should include the project and owner’s name and address, the description of the work performed and not paid and the month(s) the services were delivered. The general contractor’s name and mailing address and the contract details. It should be signed, notarized and filed with the Property Records office of the county where the project is located. After filing a construction lien, the owner and general contractor should receive a copy of the filed documents.

Historically in Texas, construction liens have only been drafted and filed by attorneys, but technology has brought simplified services like Texas Easy Lien which prepares, notarizes and files lien documents online without the need of hiring an attorney.

://www.texaseasylien.com/

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Sending notice of the mechanics lienOnce the lien is filed, the property owner and the general contractor must receive copies of the documents within the next five calendar of the filing date. This means that it must be delivered to them via US postal service and with Return Receipt Requested. This delivery method will prevent any problems that may arise and will give the claimant proof the requirement was met.

If a filing a lien did not get you paidIf payment is not submitted after filing the lien, a lawsuit to foreclose the lien may be necessary. This step must be taken within the time the lien is kept valid which varies depending on the type of project. According to Texas law, you have between one and two years to enforce your lien.

If you’re paid after filing the construction lien, there’s no further action you need to take except to release the lien.

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How can you file mechanics lien in Texas?

Avoiding a Construction LienSometimes, property owners can prevent lien filings just asking timely for the right paperwork.● Make sure you have a written agreement in place with the general contractor

describing the work to be done, the materials to be used, the subcontractors and other workers to be hired, with a breakdown of the cost.

● Require proof that those subcontractors and others have been paid before you make your final payment to the general contractor. (Alternately, you could require a written list of what each subcontractor is owed.)

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