Keeping up with work orders, invoices, and payments in the commercial construction industry is a hassle. Throw in late-payment issues, and your job just became more challenging. Fortunately, Texas Construction Law protects you from late and non-payment situations, although the steps can be complicated. However, getting to know the process and your rights can help save you time and money.
A mechanic’s lien is a legal tool that provides the unpaid party with a security interest in the property, thereby making it difficult for the property owner to financially do anything with the property until the dispute is resolved. To perfect a mechanic’s lien, there are specific steps to meet and deadlines to follow to utilize this powerful lien tool successfully. The first step is the most important and often overlooked, and that is to serve the preliminary notice (also commonly called a pre-lien notice, a notice of intent to lien, or monthly notice) on time and to the proper people.
What is a preliminary notice?
Sending preliminary notice(s) must happen for a mechanic’s lien to be valid. Essentially, the preliminary notice accomplishes two things – it alerts the property owner or prime contractor that you have not been paid even though you are working on the job. There are often many levels of contractors and subcontractors working on projects at all times. In many cases, the property owner, or even the prime contractor, may not be aware of your contribution to the job. Serving preliminary notices makes them aware of your situation.
Where do I start?
When you begin a project, gathering the following project details will save you both time and energy. This information is necessary to pursue a mechanic’s lien and will be needed to serve a preliminary notice. Here is what you need:
- Project owner’s name (or company name) and last known mailing address.
- Project name and address of the project, including the county name.
- A legal description of the property (not always needed, but helpful if available).
- The amounts owed for each month you performed the work.
- The description of the work itself (this can be general).
- The original contractor’s (this is the general contractor) name and last known mailing address (if you are a subcontractor or sub-subcontractor)
- Name and address of any subcontractor above you that may be involved in the project.
The next step is to familiarize yourself with the invoicing deadlines and the mechanic’s lien paperwork deadlines. Missing just one deadline can forfeit your right to file a mechanic’s line, so it’s crucial to stay on top of them. We mentioned earlier that these deadlines could be tricky, partly because they depend on where you fall in the labor hierarchy, so we created this easy to follow chart of deadlines to send a Pre-lien Notice Letter in Texas to clearly outline what is needed and when.
What can I expect?
Sending a preliminary notice letter for each month of unpaid work is an inexpensive way to stay on top of your nonpaid invoices and, in most cases, will result in payment. The pre-lien notice does not have to be notarized or recorded with the property records of the county. All you have to do is mail a signed preliminary or pre-lien notice letter to the project owner and the prime contractor through the mail with Return Receipt Requested (RRR). Be sure and keep the proof of receipt RRR (the green label).Although this all may seem a little overwhelming, experience has proven that staying organized and knowing your rights can help avoid non-payment hassles on your commercial construction projects. With Texas Easy Lien, you can find all of the paperwork needed to pursue your payment rights, and our 100% online service helps you stay organized throughout the process. You can find answers to all of your questions and friendly guidance throughout the process. Get started today at www.texaseasylien.com.