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Mechanic's Liens in Texas

Entire books have been written on the topic of mechanic's liens, and entirely separate books have been written on bond claims. It is simply not feasible to give you more than an overview of the applicable Texas real estate law in a memo form. The following is intended to be an outline of the deadlines that will be applicable in your most common transactions, and to assist you in identifying the situations in which you will need to obtain the assistance of a Texas real estate lawyer.

Please note that wrongfully filing a mechanic's lien against someone else's property may subject you to both civil penalties and criminal charges, depending on the circumstances.

I. PRELIMINARY MATTERS

Before you can even think about filing a lien or a bond claim, you need to be able to correctly answer two fundamental questions:

A. What is your relationship to the project?

  1. Original / prime contractor: furnished materials directly to the Owner (may be more than one)
  2. Subcontractor: furnished materials to Original Contractor
  3. Sub-subcontractor: furnished materials to a Subcontractor

B. What kind of project is it?

  1. Residential (Owner to occupy as primary home) - Part III
  2. Commercial - Part IV
  3. Public Works - Part V

II. GUIDELINES APPLICABLE TO ALL PROJECTS

A. All notices should be sent by certified mail.

B. In most cases a copy of your itemized invoice will suffice as a "Notice of Balance Due." A "Notice of Unpaid Balance," however, will likely require special language.

C. Do not wait until the last minute to take action. Collection rates are always higher when efforts start early and before the problem gets out of hand. Also, you may need time to collect pertinent information, such as a legal description of the project or bond claim information. Also, sending some notices early may be useful in "trapping" funds in the hands of the Owner.

D. If a deadline falls on a weekend or a holiday, perform the required action no later than the last business day prior to the deadline.

III. RESIDENTIAL

A. If you are an Original Contractor

  1. Before any labor or materials are furnished on the project, husband and wife must sign contract and contract must be recorded.
  2. File lien affidavit with county clerk and send a copy to Owner. (See calendar #2)

B. If you are a Subcontractor

  1. If the property is homestead, ensure the Original Contractor has complied with the above steps to create a valid lien.
  2. If you are fabricating customized materials offsite, send notice to the Owner. (See calendar #1)
  3. Send Notice of Unpaid Balance to Owner with a copy to the Original Contractor. (See calendar #1)
  4. File lien affidavit with county clerk and send copies to the Owner and the Original Contractor. (See calendar #2)

C. If you are a Sub-subcontractor

  1. If the property is homestead, ensure the Original Contractor has complied with the above steps to create a valid lien.
  2. If you are fabricating customized materials offsite, send notice to the Owner. (See calendar #1)
  3. Send Notice of Balance Due to Original Contractor. (See calendar #1)
  4. Send Notice of Unpaid Balance to Owner with a copy to the Original Contractor. (See calendar #1)
  5. File lien affidavit with county clerk and send copies to the Owner and the Original Contractor. (See calendar #2 or 30th day after completion, whichever is earlier)

IV. COMMERCIAL

A. If you are an Original Contractor: File lien affidavit with county clerk and send a copy to the Owner. (See calendar #3).

B. If you are a Subcontractor

  1. If you have a retainage agreement with the Original Contractor, send notice to the Owner. (See calendar #1)
  2. If you are fabricating customized materials offsite, send notice to the Owner. (See calendar #1)
  3. Send Notice of Unpaid Balance to Owner with a copy to the Original Contractor. (See calendar #2)
  4. File lien affidavit with county clerk and send copies to the Owner and the Original Contractor. (See calendar #3 or 30th day after actual completion, which ever is earlier)

C. If you are a Sub-subcontractor

  1. If you have a retainage agreement with the Original Contractor, send notice to the Owner. (See calendar #1)
  2. If you are fabricating customized materials offsite, send notice to the Owner. (See calendar #1)
  3. Send Notice of Balance Due to Original Contractor. (See calendar #1)
  4. Send Notice of Unpaid Balance to Owner with a copy to the Original Contractor. (See calendar #2)
  5. File lien affidavit with county clerk and send copies to the Owner and the Original Contractor. (See calendar #3 or 30th day after completion, whichever is earlier)

V. PUBLIC WORKS

You cannot file a lien against government property. Your recourse is to file a claim against the project bond. To select the correct process, you need to determine whether you are dealing with a State or Federal government project.

A. State Projects

  1. If you do not have a direct contractual relationship with the Prime Contractor, send notice of claim to the Prime Contractor. (See calendar #1)
  2. If you have a contract with the Prime Contractor and the contract provides for retainage, send notice of claim for retainage to Prime Contractor and Surety on or before 90th day after completion of the contract.
  3. Send sworn statement of account and bond claim to Prime Contractor and Surety. (See calendar #2)

B. Federal Projects - Call us.

VI. CONCLUSION

The rules governing mechanic's liens and bond claims are both strict and complex, with some deadlines running from the "date of delivery" and others running from the "date of accrual," and subject to variation depending on whether the project is ongoing, completed, or abandoned. Some notices are required to have particular words, phrases, or formatting. To make matters worse, the law changes periodically, so this information may not be accurate by this time next year. In short, if you have a significant project that seems to be going off the tracks, you should consult with an experienced real estate attorney at an early stage to discuss the details and see if there is anything else that needs to be done to protect your rights.

Roberts & Roberts is a Killeen, Texas law firm which provides legal services in the fields of real estate, probate, estate planning, business and family law. If you have questions about Texas real estate law, or if you need a Bell County real estate attorney, we would welcome the opportunity to assist you.We hope you will find this information helpful. If you have any questions about the foregoing or other aspects of Texas real estate law, please do not hesitate to contact our office at your convenience.

Roberts & Roberts, LLP