Is a Construction Lien the same as a mechanics lien in

Texas?

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Construction liens are official documents used by industry contractors, sub-contractors, builders and material suppliers to assert a lien on property when they have not been paid for work or services furnished to a project. Their purpose is to bind the property from any financial transaction unless the debt to creditors gets paid first.

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Construction Liens are same as Mechanics Liens

When a construction lien is filed against a property, it becomes public record. This alerts potential purchasers that someone claims a debt is owed for labor, materials, or equipment provided to the property. Lenders typically will not offer permanent financing or refinance a property that has a mechanics lien filed against it, which can be a real problem for the property owner.

Construction liens are also known as mechanics lien. They are the exact same document and only have different names depending on the state or city.

In the construction industry, mechanic’s liens or construction liens, are the most effective tool used by contractors, sub-contractors and material suppliers, who are working on a construction project and are not being paid for the work or services they have provided.

If a contractor or material supplier files a mechanics lien against the property, it becomes difficult for the owner to sell or refinance it without first paying off the debts secured by the lien. When a construction lien is filed it creates an interest in the ownership of the property, and in case the claim is not paid, the person or company who filed it may have a right to file a lawsuit to foreclose the lien and take the title of the property if the debts are not satisfied.

Construction Lien Laws

Construction lien laws widely differ from state to state. Notice requirements, filing and mailing deadlines and information included in the documents are just some of the difference's states have between each other.

Some states offer some flexibility while others’ requirements are complex and must be strictly followed to keep the lien rights. In states like Texas, lien rules are complex and strict historically prompting contractors and suppliers to retain construction attorneys to recover their money. Small and medium sized contractors often do not use their lien rights due to high attorney fees.

Fortunately, online services have now been designed to prepare and file lien documents online without the need of an attorney giving everyone owed on a construction project the opportunity to get paid without breaking the bank.

As a property owner, the best way to stay away from the risk of getting a lien filed, is to pay off the bills timely. On larger projects, make sure that everyone involved in the project is getting paid by keeping track of payments and requiring the contractors and subcontractors below to do the same.

In the event subcontractors don’t pay their workers timely, receipt of payment and lien waiver requirements are tools that can be used. If a lien gets filed against your property, action must be taken immediately, even if it is not valid. Assuming it is an isolated incident can further damage the development of the project.

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