If you have filed a mechanics lien to collect payment on a commercial construction project in Texas, you *should* be on your way to receiving payment. But what if your prelien notice(s) and mechanics lien affidavit have not prompted payment? In this article, we will discuss the mechanics lien foreclosure process.
Foreclose to Enforce a Lien
Texas Construction Law provides contractors, subcontractors, and materials suppliers with the mechanics lien (also called a construction lien) to help collect past due payments on commercial construction jobs. However, filing a mechanics lien on a property may not always result in payment. If you are unable to collect payment on a lien after filing the affidavit, then Texas Construction Law allows you to foreclose to enforce a lien. This action forces the sale of the property to pay creditors.
Unfortunately, to foreclose a lien, a lawsuit must be filed. This involves more time and the Texas court system. Fortunately, like filing a mechanics lien, the act of filing and serving of the Lawsuit can be enough to prompt payment.
How long do I have to foreclose on a lien?
If you have to initiate a lawsuit for a mechanics lien foreclosure to collect a payment, then it is critical to meet the associated deadlines. For a mechanics lien, the later of these two scenarios applies:
- Two years after the deadline to file the mechanics lien.
- One year after completion, termination, or abandonment of the work under the original contract.
So, in most cases, you have up to two years to file a lawsuit to foreclose on a lien. If you fail to foreclose on the lien within these time parameters, your mechanics lien becomes invalid.
Do I need a lawyer to file a lawsuit to foreclose a lien?
Although individuals are allowed to represent themselves in a court of law, this is rarely recommended. A lien foreclosure action is a lawsuit, which means it needs to be drafted, filed, and served appropriately in compliance with the rules of the jurisdiction in which the lien was recorded. In fact, if you are considering filing suit to foreclose on a lien, we highly recommend you engage a Texas Construction Law attorney.
Are lien foreclosures common?
The number of lien foreclosure lawsuits that go to trial is more rare than common. Typically, the act of filing an official mechanics lien affidavit is enough to prompt payment for the work you completed on a commercial construction project. However, if that is not the case, and you have to take further action, the act of filing a lawsuit to foreclose a lien is next. Fortunately, since trials are both time consuming and expensive for all parties involved, this action often prompts settlement of the debt before a trial is necessary.