If you’re a contractor, you know that getting paid for your work can sometimes be a challenge. One of the ways you can protect your right to get paid is by filing a mechanic’s lien. But what is a mechanic’s lien, and how do you file one?
Despite the name, this lien is not only for auto mechanics. The Republic of Texas created the mechanic’s lien law in 1839 to help people in the construction business get paid. Back then, the worker was protected if they filed a written contract within 30 days. Now it’s more complicated to understand the details of filing a mechanic’s lien, so here are answers to some commonly asked questions.
What is a Mechanic’s Lien?
Whether you call it a construction lien or a mechanic’s lien, it is a legal tool that helps contractors, subcontractors, and suppliers recover payment for the labor, services, equipment, or materials they supplied to a construction project.
A mechanic’s lien is a legal claim on real property in exchange for unpaid labor, services, supplies, or materials furnished to improve that specific property. When properly filed, the mechanic’s lien shows up as a debt on the property’s title and motivates its owner to get you paid.
There are different requirements depending on whether a job is commercial, residential, or a public project.
Specific laws apply to residential construction projects. For example, a contractor must provide specific notices to the residential property owner before starting the job. They also must have a written contract if that property is the owner’s homestead.
In addition, you must follow specific legal procedures to get a valid mechanic’s lien filed. Deadlines are different depending on whether you are the contractor, subcontractor, or if the subcontractor hired you.
After the lien is filed correctly, the owner can only sell the property or refinance it once the debt is paid or the lien expires.
Who Can File a Mechanic’s Lien in Texas?
Are you a plumber, electrician, HVAC installer, original contractor, or subcontractor, or did you provide services on a construction project? If so, there’s a good chance you can use the powerful leverage of a mechanic’s lien.
General contractors, subcontractors, material suppliers, and laborers can typically file a mechanic’s lien when they aren’t paid. In addition, according to the Property Code in Texas, design professionals such as architects, engineers, and surveyors can file these liens. Generally, liens are only available on private construction projects, such as residential, commercial, or industrial construction, including renovation, but not on public property projects.
If your business provides construction materials, you are probably eligible. Under the law relating to mechanic’s liens, the material includes supplies, machinery, fixtures, or tools that were used in the project. It also provides for the cost of construction equipment rentals used or delivered on the construction site.
What information do you need to file a lien?
Before you begin the filing process, collect the following information:
- The street address and legal description of the property where the work was done;
- The name and mailing address of the property owner and any contractors above you;
- A copy of any contracts related to the project; and
- A copy of the surety bond if there is one.
- If the work or delivery is not prepaid, you need a written document specifying payment terms.
- Record when you receive payments, the month you did the job, and any missed payments.
- If you are a subcontractor, you need a list of the notices you’ve sent and the dates you sent them.
- Sub-subcontractors also need the name and mailing address of every subcontractor above them on the project.
Knowing the deadlines to file and send pre-lien notices and lien affidavits is just as important as knowing how to file the lien. Now you can see it’s essential to think about payment before you even start the job or deliver supplies. Stay up to date on your billing and keep track of those deadlines.
How do you find a legal description of a property?
The legal description is different from the street address. A detailed real estate description identifies the property for legal purposes. The best way to find the legal description is on the property deed.
Generally, the county appraiser’s office is the best place to find this information. Search online for the specific county where the job was located and add the words’ tax appraisal records to the search.
For instance, if your job was in Austin and Travis County, you would look for Travis County texas appraisal district records. Once on the website, go to Property Search and look for the property in their records database. Verify that your documents match those of the property title. If they don’t match, ensure to use at least the legal property description and the owner’s name as listed in the property deed.
Finding property information on tax appraisal websites often takes time and effort. If you choose to use Texas Easy Lien services to file your lien, we can help you verify the legal description. Although it is best to have the legal description in the lien document, you can use the street address of the project, and your lien will still be valid.
How much is the filing fee for recording a mechanic’s lien in Texas?
The cost to file a mechanic’s lien varies from county to county in Texas. For instance, the filing fee in person in Travis County is $26 and includes 1 page. Each additional page costs $4. In Harris County, the in-person filing fee for the first page is $18.
The law requires the lien to be filed with the County Clerk from where the job is located. Once you know the county, you can find out the cost of their filing fees.
Our online lien document services at Texas Easy Lien make it more affordable to file on even your smaller unpaid jobs. Our document pricing ranges from $19 – $249, depending on the type of document you need, and our notary and filing fees are standardized across counties.
Where do you file a mechanic’s lien?
You file a mechanic’s lien at the County Clerk’s office. Remember, you must file the lien in the county where the job site is located. Even if it is not the same county where your business is or where you live.
Filing electronically can only be done through a registered provider like Texas Easy Lien. If the county where you must file your lien does not accept electronic filing, check their corresponding office for the hours and accepted filing forms.
What is a lien affidavit?
You may see the word lien affidavit and wonder if it’s the same as a mechanic’s lien. An affidavit is a written and signed document valid in a court of law. The affidavit is the actual document you fill out and sign. It is the official document that asserts a lien against a property.
Once the lien affidavit is recorded with the County Clerk where the job is located, it becomes a legal record, known as a property lien.
What is a lien release, and when do you issue that legal document?
Once you have followed all the legal requirements and filed a mechanic’s lien, the property owner is motivated to pay you.
After you file a mechanic’s lien and receive payment, you must file a lien release in the same county where the lien was filed. In Texas, a lien release is a state-mandated document that clears the real property from the lien. When the debt is fully paid or settled, the person who filed the lien must provide a signed and notarized lien release within ten days of getting a written request from the property owner.
This release of lien form must be completed in a way that can be legally filed. If you successfully received payment and need to remove the lien, Texas Easy Lien can also help you with its lien release services.
However, if you do not get paid, the law allows you to foreclose on the lien (file a lawsuit.) A lien must be foreclosed no later than one year from the last day the lien could have been filed in the county. This process, though, will require the involvement of an attorney.
If the court rules in your favor, you may be awarded a judgment. The judgment would let you pursue other collection resources to recover your money, such as garnishment, bank levies, or repossession of property for example.
Do you need an attorney to file a lien?
No, you don’t need to hire an attorney. While the Texas lien laws are confusing, you can work through the steps yourself. First, access this helpful booklet, Texas Mechanic’s & Materialmen’s Liens: A Guide for Self-Employed Contractors and Construction Workers, which explains the basics. Then, get all the paperwork filled out, notarized, and filed with the county clerk in the proper county.
You can choose to prepare your lien documents online with Texas Easy Lien. Answer a few questions related to the project, review, approve, and pay. Then notarize and file, all online.
There are many steps involved in filing and releasing a mechanic’s lien. That’s why we created our simple online lien filing service. Our easy-to-understand process takes you through each step.