As with most Texas mechanics lien requirements, the rules around the pre-lien notice are complicated. Whether or not you need to file a pre-lien notice before filing a mechanics lien depends on your role in the project hierarchy. In this article, we will discuss the roles further to determine not only if you have to file a pre-lien notice, but also when to file one to protect your payment rights under Texas Construction Law.
What is a pre-lien notice?
The pre-lien notice goes by several names in the Texas construction industry. Although most commonly referred to as a pre-lien notice, it is also referred to as a Notice of Intent to Lien, a Second Month Notice Letter, a Third Month Notice Letter, a Pre-lien Notice, or simply a Notice Letter. The pre-lien notice letter alerts the general contractor and property owner that a subcontractor, sub-subcontractor, licensed design professional, or material supplier is not being paid for work performed.
Although it is essential when a subcontractor is filing a mechanics lien, sending a pre-lien notice does not mean a mechanics lien has to be filed. Sending the pre-lien notice letter is often enough to prompt payment and resolve the issue. In other words, you might only have to send a pre-lien notice letter to get paid.
Who has to file one and why?
Subcontractors, sub-subcontractors, licensed design professionals, and material suppliers are required to send a pre-lien notice letter to the General Contractor and Property Owner to rightfully file a mechanics lien. Although General Contractors can also send a pre-lien notice letter to a property owner, they are not required to.
So, if your invoices on a job are going unpaid, you must be ready to act. We recommend that all contractors, subcontractors, design professionals and material suppliers begin a new project knowing they may have to protect their payment rights with a mechanics lien and be prepared to send a pre-lien notice letter. Therefore, specific information should be collected at the start of every project, which is as follows:
- Project information: Project owner, name of the project, common address (or legal property description), and county where the project is located.
- For subcontractors: Name (or company name) and mailing address of the General (Prime or Original) Contractor.
- For sub-subcontractors: Although not required under Texas Construction Law, it is preferred to have the name and mailing address of all Subcontractors involved in the contract chain.
- Work: Invoice dates, description of the unpaid work performed, and the amount owed for each individual month.
Other pre-lien notice rules
Now that we’ve established who should send a pre-lien notice letter before filing a mechanics lien, as well as why, let’s quickly look at the additional rules surrounding the pre-lien notice letter – specifically, the HOW and WHEN.
First, all pre-lien notices in Texas must be sent by registered, certified, or otherwise traceable mail which provides proof of delivery. We recommend you keep proof (e.g., post office invoice or return receipts) that you have sent the notices to the intended parties (the General Contractor and the Property Owner).
Next, let’s look at WHEN to mail the pre-lien notices. As mentioned at the start of the article, where you fall in the hierarchy of the project will determine when the pre-lien notices are due. We have a very extensive table of deadlines available on www.texaseasylien.com that you can reference.
Also, it’s important to note that a separate pre-lien notice is due for each month of work completed, and we recommend you send one as soon as possible to protect your right to file a mechanics lien claim. Again, it’s safe to start every project with the assumption that you may be paid late or not at all. Pre-lien notice letters are an inexpensive way to protect your payment rights and avoid costly litigation costs later, whether you end up filing a mechanics lien or not.