Texas contractors who aren’t getting paid have powerful legal tools at their disposal.
- File mechanic’s liens within strict deadlines to secure payment from property
- Use Texas Prompt Payment Act to claim interest penalties and suspend work
- Send pre-lien notices and bond claims to protect your rights before filing
- Follow our contractor legal checklist to document everything and meet deadlines
Know your rights, act quickly, and don’t work for free.
Getting stiffed on a construction job feels like a punch to the gut. You’ve poured sweat, time, and materials into a project, only to watch payment deadlines come and go. If you’re a contractor not paid in Texas, you’re definitely not alone. Slow payments cost the construction sector a staggering $280 billion in 2024, with 95% of general contractors floating payments.
The good news? Texas law provides some of the strongest protections in the country for contractors who aren’t getting paid. From filing a mechanic’s lien to legal action, you have options that can get results fast. Understanding your contractor lien rights and the steps you need to take can mean the difference between writing off thousands in unpaid work and collecting every penny you’re owed.
What Rights Does a Contractor Not Paid in Texas Have?
Texas doesn’t mess around when it comes to protecting contractors from non-payment. The state has built a comprehensive legal framework that gives you multiple tools to secure payment, but only if you know how to use them properly.
Texas Prompt Payment Act: Your First Line of Defense
The Texas Prompt Payment Act sets clear payment deadlines and penalties that work in your favor. For private projects, property owners must pay general contractors within 35 days of receiving an invoice. Once you get paid, you have just 7 days to pay your subcontractors. Recent updates to Texas prompt payment laws now give contractors the right to suspend work if payment for undisputed amounts is withheld.
When payments are late, the law is on your side. Unpaid amounts start accruing interest on the day after payment is due. Public projects accrue interest at 1% plus the prime rate, while private project rates vary by contract terms. These penalties add up quickly and often motivate faster payment once clients realize the mounting costs.
Contractor Lien Rights: The Heavy Artillery
Your mechanic’s lien rights in Texas are among the most powerful collection tools available. Whether you’re a general contractor, subcontractor, supplier, or designer, you can file a lien that attaches directly to the property where you performed work. This legal mechanism essentially freezes the property until your debt is resolved.
Unlike other collection methods that might take years to resolve, liens create immediate consequences for property owners who want to sell, refinance, or obtain additional financing. However, these rights come with precise procedural requirements that must be followed exactly.
What Should You Do Immediately When Payment is Late?
When a payment deadline passes, every day matters. Here’s what you need to do immediately to protect your rights and maximize your chances of getting paid.
Document Everything from Day One
Start building your case before you even need it. Keep detailed records of all work performed, materials delivered, and communications with the client. Take photos of your progress, save all emails and text messages, and maintain accurate time sheets. If you’re dealing with subcontractor workers not getting paid, documentation becomes even more vital since you may need to prove payment to multiple parties.
Focus on creating a comprehensive project timeline that shows exactly what work was done, when it was completed, and what payment terms were agreed upon. This paper trail becomes invaluable whether you end up negotiating a settlement, filing legal documents, or presenting your case in court.
Send a Formal Demand Letter
Before escalating to legal remedies, send a professional demand letter that clearly states what you’re owed and gives the client a reasonable deadline to pay. This letter serves multiple purposes: it creates a formal record of the debt, demonstrates your professionalism, and often prompts payment without further action.
Your demand letter should include the total amount owed, a breakdown of work performed or materials supplied, reference to the original contract terms, and a clear deadline for payment. Mention that you’re prepared to pursue all legal remedies available under Texas law if payment isn’t received.
Review Your Contracts and Payment Terms
Pull out your original contract and review the payment terms, scope of work, and any clauses related to late payments or dispute resolution. Look for language about interest on late payments, lien rights, or requirements for mediation before legal action. Understanding what you agreed to up front will help you determine your strongest legal position.
If you’re working without a written contract, don’t panic. Texas law still provides lien rights in many situations, though having a written agreement always strengthens your position.
What Legal Remedies Are Available to Texas Contractors?
When friendly reminders and demand letters don’t work, it’s time to consider your legal options. Texas gives contractors several powerful tools to collect unpaid debts.
Filing Mechanic’s Liens: Your Most Powerful Tool
A mechanic’s lien puts a legal claim directly on the property where you worked. For any contractor not paid in Texas, this creates the strongest leverage since the property owner can’t sell or refinance without dealing with your debt first. This action creates significant pressure to pay quickly.
The process requires proper timing and documentation. Subcontractors must first send pre-lien notices to both property owners and general contractors, alerting them that payment is overdue and that legal action may follow. This preliminary step often resolves payment issues before formal lien filing becomes necessary.
Once you proceed to filing, the lien affidavit becomes a public record that affects the property’s title. This document must contain specific project details, work descriptions, and payment information as required by the Texas Property Code. Professional preparation ensures compliance with all statutory requirements.
Bond Claims for Public Projects
You can’t file a lien against government property, but public projects typically require contractors to purchase surety bonds that protect subcontractors and suppliers. If you’re working on a school, highway, or other public project and aren’t getting paid, you can file a bond claim against the general contractor’s surety.
Bond claims offer faster resolution than traditional liens because bonding companies have strong financial incentives to resolve disputes quickly. Their relationship with the contractor depends on maintaining a clean claims record, making them motivated partners in getting subcontractors paid promptly.
Small Claims and Legal Action
For smaller disputed amounts, small claims court offers a faster, less expensive option than full litigation. You don’t need an attorney, the filing fees are minimal, and cases typically resolve within a few months.
For larger amounts or complex situations, hiring a construction attorney may be necessary. Many attorneys work on contingency for collection cases, meaning you don’t pay unless they recover money for you.
What’s on the Essential Texas Contractor Legal Checklist?
Here’s your step-by-step contractor legal checklist to protect your payment rights and avoid costly mistakes:
Before Starting Any Project:
- Establish clear written agreements, even for small jobs
- Verify property ownership and check for existing liens
- Determine project classification (residential vs commercial) as rules differ
- Research the general contractor’s payment history if you’re a subcontractor
- Confirm proper licensing for maximum legal protection
During the Project:
- Document progress with photos and detailed work logs
- Submit invoices promptly per contract terms
- Track all project communications, especially regarding changes or additional work
- Monitor payment deadlines and address delays immediately
- Organize records by month for easier lien preparation if needed
When Payment is Late:
- Issue formal demand letter within 10 days of missed deadline
- Calculate any applicable interest under Texas Prompt Payment Act
- Prepare required notices (pre-lien for subcontractors)
- Gather comprehensive documentation for potential legal action
- Evaluate work suspension rights under updated Texas law
Critical Filing Deadlines by Project Type:
- Commercial projects: Pre-lien notice by 15th of 3rd month, lien affidavit by 15th of 4th month
- Residential projects: Pre-lien notice by 15th of 2nd month, lien affidavit by 15th of 3rd month
- Public projects: Bond claim notice within 90 days of final work
- All projects: Deliver lien copies within 5 days of county filing
How Do Lien Rights Work in Texas?
Not every contractor qualifies for the same lien rights, and understanding these distinctions can save you time and legal headaches. Texas recognizes both constitutional and statutory liens, each with different requirements and protections.
Who Qualifies to File
Texas law allows liens for general contractors, subcontractors, material suppliers, equipment rental companies, architects, engineers, surveyors, and landscapers. Whether you’re a general contractor not paid in Texas or a subcontractor dealing with payment delays, the key requirement is that you must have provided labor or materials that improved the property under a contract with the owner, general contractor, or another subcontractor.
Licensed professionals like architects and engineers must be properly licensed to claim lien rights. Most other contractors don’t need specific licensing to file liens, though having proper business licenses strengthens your position.
Notice Requirements and Strategic Timing
The timing of your notices can make or break your lien rights. Texas requires different notices for different situations, and missing even one deadline can cost you everything. Understanding your options helps you choose the most effective approach for your specific situation.
Here’s how your options compare:
| Remedy | Best For | Timeline | Pros | Cons |
| Demand Letter | All situations | 1–2 weeks | Free, maintains relationships | No legal enforcement |
| Mechanic’s Lien | Private projects | 2–4 months | Strong legal tool, property attachment | Strict deadlines, filing costs |
| Bond Claim | Public projects | 90 days | Required on public jobs | Limited to bonded projects |
| Small Claims Court | Smaller disputes | 2–4 months | No attorney needed, lower cost | Amount limitations |
| Legal Action | Complex cases | 6+ months | Professional representation | Higher costs, longer process |
How Do Lien Waivers Affect Your Payment Rights?
Understanding lien waivers protects your rights while maintaining positive client relationships. These documents function as specialized receipts that prove payment for specific work while formally releasing your right to file future liens for that work.
Texas recognizes four distinct waiver types: conditional and unconditional versions for both progress and final payments. The critical distinction lies in timing. Conditional waivers only become effective once payment clears your bank, while unconditional waivers take immediate effect upon signing.
Strategic waiver management protects you from payment disputes while demonstrating professionalism to clients. Never sign unconditional waivers until funds are verified in your account. Lien waivers differ from lien releases. Waivers prevent future lien filings, while releases remove existing liens from public records.
What Alternative Solutions Exist for Payment Disputes?
Sometimes the direct approach isn’t the best. Consider these alternatives before jumping into legal action.
Mediation and Arbitration
Many construction contracts include clauses requiring mediation or arbitration before litigation. These processes can be faster and less expensive than court, and they often preserve business relationships better than adversarial proceedings.
Mediation involves a neutral third party helping you and the client negotiate a resolution. It’s non-binding, meaning either party can walk away if they don’t like the proposed solution. Arbitration is more like a private trial where an arbitrator makes a binding decision on your case.
When to Hire Legal Counsel
Consider hiring an attorney when the amount owed is substantial, when multiple parties are involved, when the client is disputing the quality of your work, or when you’re facing counterclaims. Many construction attorneys offer free consultations and will work on contingency for collection cases.
The right legal counsel can often resolve disputes faster than you could on your own, especially when they understand Texas construction lien laws and have relationships with local courts and other attorneys.
Frequently Asked Questions
How long do I have to file a lien in Texas if I’m not getting paid? Deadlines vary by project type and your role. Commercial projects allow subcontractors until the 15th day of the fourth month after completing work, while residential projects require filing by the 15th day of the third month. General contractors have different timeframes based on overall project completion rather than individual work completion.
Can I file a lien without a written contract in Texas? Yes, Texas law recognizes both written and implied contracts for lien purposes. General contractors with direct property owner relationships have the strongest position, but even oral agreements can support valid liens if you can demonstrate that the work improved the property and payment was expected.
What’s the difference between a mechanic’s lien and a bond claim? Mechanic’s liens apply to private property and create direct claims against real estate, while bond claims target the insurance policies required on public construction projects. The key difference is whether you’re working on privately-owned or government property.
How much does it cost to file a lien in Texas? Filing fees vary by county but are typically modest. Professional document preparation services offer affordable alternatives to hiring an attorney for the full legal process.
Protect Your Payment Rights the Affordable Way
Being a contractor not paid in Texas doesn’t mean you’re out of options. The state provides robust protections through the Prompt Payment Act, mechanic’s lien laws, and bond claim rights. Success depends on understanding which remedy fits your situation and acting within the required timeframes.
Texas’s booming construction industry creates tremendous opportunities for contractors who understand how to protect their interests. With Texas leading the nation in construction activity, knowledge of payment protection laws becomes essential for sustainable business operations.
Don’t let payment problems derail your business. Texas Easy Lien provides an affordable, efficient way to prepare and file all the necessary documents to protect your rights and get paid. Contact us to learn how we can help you navigate the lien process and collect the money you’ve earned.
