Filing a lien on a property in Texas is not just within the legal rights of subcontractors working on private commercial construction, it’s also a standard tool for battling nonpayment in the construction industry. The industry term is a mechanics lien, and it’s not a difficult process – as long as you know the rules. Let’s start with a clear understanding of a mechanics lien, and how filing this lien on a property in Texas can help subcontractors recover nonpayment on a job.
What is a Mechanics Lien?
A mechanics lien is an official document stating that either the contractor or the property owner owes money to another contractor for work completed on the property, and it is available to general (prime) contractors, subcontractors, suppliers, engineers, architects, and sub-subcontractors. A mechanics lien 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.
Under Texas construction law, there are concrete steps involved in filing a mechanics lien and any other associated paperwork. Keep reading to learn everything you need to know to successfully file a lien on a property in Texas and protect your payment rights.
Step One: Be Prepared on Every Job
Sadly, subcontractor nonpayment is a common practice in the private commercial construction industry, which is why Texas has specific laws to protect those affected. The first step in filing a lien on a property in Texas is to gather the necessary project information. You will need the following information:
- Project owner’s name (or company name) and last known mailing address.
- Project name and address, 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)
Sub-subcontractors will also need the names and mailing addresses of every subcontractor involved above them on the project. We recommend gathering this information at the start of every job, so it is readily available should a subcontractor need to exercise lien rights to collect payment.
Step Two: Send a Pre-lien Notice
A subcontractor is required by law to serve the owner and general contractor with a pre-lien notice to file a mechanics lien. The pre-lien notice alerts the general contractor and owner that the subcontractor is missing a payment. By law, the pre-lien notice must be sent via certified mail, or any other form of traceable delivery that confirms proof of receipt (always keep the receipt as proof of mailing). It is important to note that lien deadlines are calculated on a monthly basis, and your pre-lien notice deadlines are based on the month of nonpayment.
Step Three: File a Mechanics Lien Affidavit
Often, sending a pre-lien notice is enough to recover nonpayment on a job. However, if the notice does not motivate a payment, then it’s time to move forward with filing a lien affidavit. When filing a lien on a property in Texas, the paperwork must be filed according to law. Let’s look at the requirements for filing a lien:
- 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 the lien with the county. You do not have to mail a file-marked copy of the lien, you just have to provide a signed copy of the lien.
- Not sending a copy of the lien to the property owner and general contractor will invalidate your lien.
Don’t Miss the Deadlines
Every step of filing a lien is crucial and has deadlines. Missing a single deadline can forfeit your right to file a lien. At Texas Easy Lien, we provide a very detailed schedule of deadlines for the pre-lien notice letter and the lien affidavit documents.
Filing a lien may seem confusing and complicated, but it doesn’t have to be. All of the legally mandated forms mentioned in this article are available on our website, www.texaseasylien.com. We make filing a lien on a property in Texas easy and affordable so that you can protect your payment rights without the expense of an attorney.