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Construction liens: Getting paid when someone won’t pay

On Behalf of | Jul 3, 2018 | Construction Law

Construction is a difficult business, with long hours, changing work conditions and occasionally unreasonable client expectations. These expectations can sometimes lead someone to withhold payment for a job, even when you’ve held up your end of the agreement. Fortunately, you’re not without options — you can file a mechanic’s lien, which cover a wide range of issues when things don’t go as planned. Unfortunately, Texas has the most complicated filing rules in the country, which can be difficult to navigate. Here are some tips to demystify the process.

What Is A Lien?

A lien is a legal document that describes a debt, which people who are owed money draft to ensure they get paid. In the construction business, a so-called “mechanic’s lien” is a middle road between doing nothing and filing a full-blown lawsuit against the property owner. Liens that are filed successfully become public record and can impact the owner’s credit score and ability to sell the property if they don’t pay on time. Whenever someone else does a title search on the property, the lien will show up.

Who Can File A Mechanics Lien?

If you worked on a construction project, you can file a mechanic’s lien to get paid for your work. This includes general contractors, subcontractors, engineers, architects, fabricators and other people whose labor gets the job done. Most work that you’d commonly think of in association with a commercial or residential building project is eligible for a mechanic’s lien.

How Does A Lien Force Payment?

The lien creates a payment obligation that’s directly tied to the property, so that the owner can’t sell without paying you. These complications are significant enough that many property owners will settle accounts after you send a letter demanding payment by a certain deadline, with a mechanic’s lien to follow afterwards. However, filing the lien itself is sometimes necessary to guarantee payment.

How Do I File A Mechanics Lien?

Texas has a reputation for the most complicated and confusing lien laws in the country, and it’s a reputation we’ve earned. The full requirements for drafting a lien and filing it are outside the scope of this article, but the requirements are numerous, specific and sometimes counter-intuitive. While it’s technically possible to file a lien on your own, a single mistake can invalidate the entire thing and you won’t have an opportunity to try again. If you work in construction, you’re probably used to doing a lot of things yourself. However, this is a job best left to professionals.