Your Guide to Filing a Lien on a Property in Texas

Late payment is a common issue in the construction industry, costing construction professionals $208 billion in 2022, alone. Construction is an industry already working on razor-thin margins, making late and non-payment a major issue. Many contractors recognize that filing a lien can help you get paid. However, complexities in the process can lead to missed deadlines that void the document’s authority. 

Filing a lien on a property in Texas is not just within the legal rights of subcontractors working on private commercial construction—it’s a standard tool for battling nonpayment in the construction industry. The industry term for the document is a mechanic’s lien. 

Filing may sound complicated at first, but it’s not a difficult process as long as you know the rules. Let’s start with a clear understanding of a mechanic’s lien and how filing this lien on a property in Texas can help contractors recover nonpayment on a job.

What is a Mechanic’s Lien?

A mechanic’s lien is an official document stating that a general contractor or property owner owes money to a contractor or subcontractor for work completed on a property. It is the most powerful tool a contractor or subcontractor has to battle nonpayment on a private commercial construction project because it prevents the property owner from doing anything with the property—until you get paid. 

Related: 8 Things to Know About Getting a Mechanic’s Lien in Texas

A mechanic’s lien is available to general contractors, subcontractors, suppliers, engineers, architects, and sub-subcontractors. Once you successfully file a lien on a Texas property, the property owner can’t sell the property or use it in financial transactions until the debt is paid. When a lien is enforced, it can even force an owner to sell the property to pay off debts. 

What is the Purpose of Filing a Lien?

The construction industry is unique in that contractors typically make upfront investments and work on projects that take months (or more) to complete. Getting paid on time is crucial to finishing the project and staying afloat while work is in progress. A construction lien is a form of protection that ensures property owners follow laws for paying contractors on time

In Texas, a property owner must make payment to the general contractor (GC) within 35 days for private projects. The GC must pay subcontractors and suppliers within 7 days of receiving payment. The 7-day turnaround period also applies to payments down the next tier. In other words, once a second-tier subcontractor is paid, they have 7 days to pay their subs and suppliers.

Payment for public projects is due to the GC within 30 days after the latest of these circumstances:

  • The date the entity receives goods under the contract
  • The date work is completed
  • The date the invoice is received

Once general contractors receive payment for public projects, they are required to pay subs and suppliers within 10 days. The 10-day payment deadline is passed down to the next tier on the payment chain.

Payment may be withheld if there is a good faith dispute regarding whether the work was properly performed. If the payment request is disputed for a public project, the public entity must notify the contractor within 21 days of receipt. 

Filing a lien allows you to legally enforce your right to get paid as outlined in these regulations. It essentially gives you a stake in the property until payment is received. Accurately filing a lien can help you avoid hiring an attorney and dealing with expensive lawsuits to get money owed to you. 

Four Steps to Filing a Lien in Texas

Under Texas law, there are clear-cut, specific steps involved in filing a mechanic’s lien and associated paperwork. Failure to follow the steps correctly or to meet required deadlines could void the authority of the lien. Follow these steps to successfully file a lien on a property in Texas. 

1. Be Prepared on Every Job: Record Essential Information

Unfortunately, subcontractor nonpayment is common in the private commercial construction industry. While Texas has specific laws to protect both contractors and subcontractors from nonpayment, you must be prepared to follow proper procedures to take advantage of these laws. Gathering the necessary project information is the first step in filing a lien on a property in Texas. Here’s what you’ll need:

  • Project owner’s name (or company name) and last known mailing address: Accurate owner information is crucial for serving notices and filing the lien correctly. This information can often be found in the contract documents or obtained from the general contractor.
  • Project name and address, including the county name: The lien must be filed in the county where the project is located, so having the correct address and county information is essential.
  • A legal description of the property (not always required, but helpful if available): While not always mandatory, having a legal description of the property can help ensure the lien is properly recorded and enforceable.
  • Amounts owed for each month you performed work: Documenting the specific amounts owed for each month’s work is important for accurately calculating the total lien amount and demonstrating the timeline of your unpaid labor or materials.
  • Description of work you completed (can be a general description): A brief description of the work you performed on the project is required for the lien affidavit. This helps establish your role and contribution to the project.
  • The original contractor’s (general contractor) name and last known mailing address (if you’re a subcontractor): As a subcontractor, you’ll need to identify the general contractor in your lien paperwork, as they are the party who hired you for the project.
  • Subcontractors need the names and mailing addresses of every subcontractor involved above them on the project: If you’re a lower-tier subcontractor, you’ll need to gather information on all other subcontractors above you in the contractual chain to properly serve notices and protect your lien rights.

Gathering this information at the start of every job can save you valuable time and effort should a payment issue arise. Having accurate project details on hand makes navigating the lien process smoother and increases your chances of successfully securing the payments you’ve earned.

Meeting Lien Requirements for a Texas Homestead Project

When a property is the property owner’s primary residence, it is considered a homestead, which has special protection. When working on a homestead property, you must take additional steps before beginning work.  These requirements must be fulfilled before performing work on a homestead property for a lien to be valid in the event of non-payment.

  • Develop a written contract between the GC and the homeowner
  • Make sure the contract is executed and signed before work begins
  • If the property owner is married, the contract must be signed by both spouses, even if the property is only in the name of one spouse. 
  • The contract should be filed with the county clerk in the county where the homestead is located.

2. Send a Pre-lien Notice

A subcontractor or any other professional who doesn’t have a contract with the property owner is required by law to serve the owner and general contractor with a pre-lien notice to file a mechanic’s lien. The notice alerts the general contractor and owner that the subcontractor is missing a payment. 

Lien deadlines are calculated on a monthly basis, and your pre-lien notice deadline will be based on the month of non-payment. A pre-lien notice must be sent by traceable delivery that confirms proof of receipt (such as certified mail). When you mail the notice, keep your receipt as proof of mailing. 

3. File a Mechanic’s Lien Affidavit

Often, sending a pre-lien notice is enough to recover nonpayment on a job. If the notice doesn’t motivate payment, it’s time to move forward by filing a lien affidavit. There are special requirements for filing a lien on a property in Texas:

  • The lien affidavit must be signed, notarized, and filed in person at the county property records office where the project is located.
  • A copy of the lien must be mailed to the property owner and general contractor by the 5th business day after filing a lien with the county. This can be a signed copy instead of a file-marked copy. 
  • Failure to send a copy of the lien to the property owner and general contractor will invalidate your lien. 

4. Mail a Notice to the Property Owner and General Contractor

Once you’ve recorded your lien with the Texas county clerk, you have five days to send notice to the property owner and GC. Do this as soon as possible to ensure the notice is received on time. When you mail the notice, keep your receipt to document your actions. 

The Importance of Deadlines When Filing a Lien

Each step of filing a lien is crucial and comes with deadlines. For many, deadlines can be the most confusing part of filing a lien. Missing a single deadline can invalidate the lien and prevent you from collecting payment. 

Related: What is the Deadline to File a Mechanic’s Lien?

Adhering to deadlines is absolutely critical in the lien process. Even a minor delay in sending a notice or filing a document could potentially jeopardize your lien rights and your ability to secure payment. Strict adherence to all applicable deadlines ensures your lien remains valid and enforceable. It’s imperative to mark all relevant dates on your calendar and build in buffer time to account for any unexpected delays or complications.

Your deadline depends on your role (as a GC or sub) and the type of project you’re working on. The last day to file a lien document is always the 15th day of the month. However, the month of your non-payment dictates your deadline date. 

Mechanic’s lien deadlines in Texas are as follows:

  • Deadlines for general contractors on commercial projects are no later than day 15 of the 4th month after the contract’s end or abandonment.
  • Deadlines for subcontractors on commercial projects are no later than day 15 on the 4th month after labor or materials were last provided.
  • Deadlines for general contractors on residential projects are no later than the 15th day of the 3rd month after the contract’s end or abandonment.
  • Deadlines for subcontractors on residential projects are no later than day 15 of the third month after labor or materials were last provided.
  • The deadline for lien enforcement is no later than one year after the last possible date you could have filed the lien. 
  • Deadlines for pre-lien notices to be filed by subcontractors are one full month before the date of the deadline for filing the lien. 

It’s easy to see why lien deadlines in Texas can be confusing. Luckily, once you get out your calendar, it’s not too hard to pinpoint the date of a lien deadline. For example, if you’re a GC who didn’t get paid in January for a commercial project, you’d file the lien affidavit on or before May 15th. If you’re a subcontractor who didn’t get paid the same month for a commercial project, you’d file a pre-lien notice on or before April 15th and file the lien affidavit on or before May 15th.

Lien Filing Made Easy

Filing a lien may seem confusing and complicated, especially for those unfamiliar with the process, but it doesn’t have to be. An online service can simplify the entire lien filing experience. At Texas Easy Lien, we make filing a lien on a property in Texas easy and affordable by providing construction businesses and contractors with the online tools they need to send notices, file liens, and manage the process with as few delays as possible.

Our user-friendly platform guides you through each step, ensuring you meet all deadlines and comply with legal requirements. From automated form generation to deadline tracking and e-filing capabilities, our service is designed to streamline the process and minimize the risk of costly mistakes. 

By leveraging our expertise and resources, you can focus on your core business operations while having the confidence that your lien rights are being properly exercised. Don’t let the complexities of lien filing deter you from securing the payments you’ve rightfully earned. Let Texas Easy Lien be your partner in mastering the lien process efficiently and effectively.

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