Monthly Archives: May 2013


Texas Mechanics Lien

In Texas, mechanics’ liens are created by constitutional right and by statute. A Constitutional Lien is available only to contractors in direct contractual privity with the owner for the improvements to the property. Statutory mechanics’ liens may be asserted, similar to other states, by general contractors, subcontractors, materialmen, mechanics, or artisans. A Texas mechanics lien that is filed with regard to work performed on privately owned property attaches to and encumbers the fee simple ownership of the property.

Real estate brokers of commercial property also have Texas mechanics lien rights for unpaid commissions in the state of Texas.

For public projects, a lien against monies due the prime contractor may be filed. The Texas public mechanics lien claim is against monies due, not against the real property or improvements.
Contractors, as well as subcontractors, sub-subcontractors and suppliers who have a contract with a general contractor or a subcontractor can file a Texas construction lien. Architects, engineers and surveyors are also entitled to Texas statutory liens so long as their design is utilized in the performance of the construction work.

A Texas Mechanics lien must be filed by the 15th of the fourth calendar month after the day on which the indebtedness accrued or the third month for a residential project. The timing depends upon when the indebtedness accrued which can depend on the tier of lien claimant. In the case of an original contractor has a contract with an owner, the owner’s debt accrues the last day of the month in which (1) the original contract is completed, finally settled or abandoned, or (2) either the owner or contractor receives from the other a written notice of contract termination.
In the case of a subcontractor, a debt accrues on the last day of the month in which the claimant performed labor or furnished materials.
Texas pre-lien notices, known as Disclosure Statements, are required in residential construction. The original contractor should furnish a Disclosure Statement to the owner before it enters into a contract for construction. Essentially, the contractor should attach a list of subcontractors and suppliers. A signed periodic statement that lists the bills or expenses that the original contractor intends to pay or have been paid under its request for payment must also be provided. If the Texas lien claimant is not the original contractor, notice of unpaid amounts must be given directly to the owner and the original contractor. Specifically, any Texas lien claimant must file its Affidavit of Lien in accordance with Texas statute.

Destruction of Ancient Pyramids

A construction company has destroyed a 2,300 year old Mayan Structure for a road building project in Belize. The structure is located in the Nohmul Center, and is one of the most important sites in northern Belize. Destruction of the site was detected last week. This type of demolition is really a tragedy, however, it does provide a direct means of examining the inner area of the structure, and allows the remains of domestic tools of that time to come to the surface. Unfortunately, destruction of ancient structures is fairly common.

Now That’s A Lot of Liens!

The foreclosure lawsuit of the historic Union Trust Building in Downtown Pittsburg has pitted a big California bank against local contractors. The building was constructed in 1916 by Henry Clay Frick, and recently completed extensive renovations.  The bank, California National Bank of Long Beach, filed the lawsuit because about 10 different contractors filed $3.57 in mechanics liens.  The bank claims the Pennsylvania mechanics lien filings are a breach of the loan agreement with the owner of the Union Trust Building.  The contractors are hoping that the filing of the mechanics liens and the resulting foreclosure suit will result in the owner finally paying them what is is owed for the work they performed on the property.

Colorado Court Strikes Mechanics Lien with an Overstated Amount


 

Colorado, like many states, allows mechanics liens to be placed on property where a prime contractor, subcontractor, supplier, and laborer performed work. In Colorado, as in all states, mechanics liens are filed on construction projects. But the mechanics lien laws are a double edged sword, and the lienor must be sure that he is properly liening the construction project.  A recent decision by the Colorado Court of Appeals in Byerly v. Bank of Colorado puts lienors on notice that improperly filed liens will be declared invalid.

The case is unique because it relates to a contract between a developer and a contractor where the fee was not just monetary: the developer was to give the contractor 5 acres of land as compensation in addition to certain monthly monetary compensation.  However, the contract states that the contractor would only receive the land as compensation if the developer was released from the construction loan the bank had issued.  This arrangement appeared to make the payment of the land contingent on certain circumstances: the release of the construction loan by the bank.

Instead, the developer was unable to sell the lots it was developing, and then failed to pay the contractor’s fees. The contractor filed a Colorado mechanics liens in the amount of the unpaid monthly fees and for the value of the land it was supposed to receive under the contract. When the bank foreclosed, it attempted to get rid of the contractor mechanics lien by arguing that the amount of the lien was excessive and that a contractor cannot file a lien for an amount over and above the contract price.
The Colorado Court of Appeals held that the maximum amount for which a prime contractor can file a lien is the contract price.  The Court also found that the “conditions precedent” had not been established in order to file a lien for the value of the land, so the filing of a mechanics lien was not valid to the extent that these amounts were included therein.

Note that the court indicated that its holding does not necessarily apply to all circumstances. If the contract has not been recorded as required by statute, then subcontractors, suppliers, and laborers may file a mechanic’s lien for the full value of the services and labor provided, regardless of the contract price.

Jet Star Removal

Workers have begun demolition on New Jersey’s Jet Star Roller Coaster. The coaster was hit off of the pier and into the ocean by Hurricane Sandy last October. The picture of this coaster sitting in the sea served as a representation of the devastation that Sandy caused. Construction, or rather destruction, was delayed for months as contractors needed to decide the best way to remove the coaster. They eventually chose to remove it by bringing in a barge with very large crane. Removal began on Tuesday, and was set to be finished within 48 to 72 hours. The rest of Casino Pier, the amusement park where the Jet Star was located, is being rebuilt. They will have 18 rides, including a new pendulum ride, and are set to open this summer.

 
 

Modern Construction Progress Website

 

The Dulles Town Center, in Dulles, Virginia, has begun construction on the new Regal Cinema. This theater is to be 45,000 square-feet, with 10 stadium style theaters, and 1 Regal Premium Experience theater. The theater is set to open next summer, but citizens are able to view the building progress on this construction website. This website is special in that it allows viewers to track the daily progress by clicking on calendar dates, and the website also features things such as a time lapse button, and at the bottom left of the viewing screen is a weather icon, showing the weather for the specific date the viewer has chosen. This website has been around for over a decade, but with its new technology OxBlue is gaining a larger client base, and with good reason. This website is easy to use, and gives everyone easy access to progress on construction, with its modern camera technology.

US Increase in Home Construction, but Decrease in Workers

The demand in the construction industry for the building of new homes is steadily rising. However, it is becoming increasingly difficult for builders and subcontractors to find workers. The home building market is moving forward quickly. In March, the industry reached the 1 million mark, which has not happened since 2008. With this jump in the numbers, it would seem that the home building industry is going well. Unfortunately, laborers are hard to find because when the housing market crashed, the workers left those jobs and found others, which were often times higher paying jobs such as mining or gas drilling. And many of the immigrant workers have also left the industry, either finding different work, or moving back to their home country. Because the workers have found new jobs, they are reluctant if not unwilling to return to the construction industry. Builders are only hiring 75 to 80 percent of laborers needed because that is all they are able to find. And laborers and suppliers are able to raise prices because demand is high. Although it is a slow process, the laborers are increasing, which will aid in meeting the demand in the home construction industry.

Connecticut Mechanic’s Liens

Liens filed on private property including the land and buildings of charitable organizations are known as mechanics’ liens . In Connecticut, when a construction lien is filed with regard to work performed on privately owned property, it attaches to and encumbers the fee simple ownership of property.
Contractors who have a contract with an owner as well as subcontractors and suppliers who have a contract with a contractor can file a lien. Connecticut also allows design professionals to file liens. 
In Connecticut, the lien claim must arise out of an agreement with, or the consent of, the owner, or of some person having authority to act on behalf of the owner.

Connecticut requires that a Notice of Intent to Claim Mechanic’s Lien be served for those who do not have a direct agreement with the owner for the work or materials/services provided. A Notice of intent to lien must be served after work has commenced but no later than 90 days after work has ceased.  A notice of intent to lien does not need to be given prior to recording a mechanics lien, and service of the construction lien certificate itself meets the statutory notice of lien requirements.
Connecticut mechanics’ liens on private property must be filed with the town clerk of the town in which the project is located within 90 days of the last date the lienor provided materials or services to the Project.

Service of the lien must be served upon the owner by a process server if the owner residse in the same town as the liened property.  Otherwise, service can be made by certified mail within 30 days after filing the mechanic’s lien.  Be sure to serve each property owner separately.

Keep in mind that your lien is not valid forever.  You have one year after filing the mechanic’s lien to enforce your lien by filing a lawsuit to foreclose.