Texas is notorious for having some of the most complex and confusing lien laws in the nation. This step-by-step guide will help you navigate this complex process and outlines who is eligible to file and provides information on mandatory notice and timing requirements that can impact the validity of your lien.
Step 1 – Determine if You’re Eligible to File A Lien
The first step in filing a mechanic’s lien is determining if you are eligible to file. Texas Property Code states that a mechanic’s lien can be filed by any person who provides labor, specially fabricated material, or furnishes labor or materials for construction or repair to a house, building, levee, or embankment.
Other eligible claimants include:
- Creators of specially fabricated materials (even if the material is not delivered or installed).
- Architects, engineers, and surveyors who prepare a plan or plat under a written agreement with the owner.
- Landscapers and related tradespeople under a written contract to provide labor, plant material or other supplies for installation or construction of a retention pond, retaining wall, berm, irrigation system, fountain, or other similar services.
- Demolition specialists who provide labor or materials for demolition of a structure on real property under a written contract with the owner.
Under Texas lien laws, most private property – home or commercial building improvement projects – is covered.
Step 2 – Drafting and Sending Lien Notices
After determining that you’re eligible to file a mechanics lien, the next step may be to draft and serve any required notices. The preliminary lien notice is an official way of informing a property owner that you have not been paid.
In Texas, the required notices may vary depending on whether the project is residential or commercial, and your relationship with the owner, general contractor, or a third party. Knowing your relationship to the original contractor and/or owner is essential to knowing when you need to send your notice.
Texas requires notices to be sent both 60 and 90 days after work or materials were provided on the project and meeting these deadlines is critical in ensuring the success of filing a valid mechanics lien.
Deadlines generally fall on the 15th of each month. This means that if you have still not been paid for work performed in July, the 60-day notice is due September 15th and the 90-day notice is due on October 15th.
Make sure that all relevant information is included in the notice. This includes:
- A statement of who you are and your relationship to the owner and/or contractor
- What work was performed and/or materials were provided
- What you’re claiming has not been paid
- Clear notice that if payment is not made you will be filing a lien
Step 3 – Preparing a Mechanics Lien
If you’ve submitted any necessary notices and have still not been paid, the next step is to draft and file your mechanics lien (also referred to as an affidavit of lien).
All mechanics liens in Texas must be filed with the clerk in the county where the work on the property was performed. 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.
Also, it is important to remember that mechanics liens in Texas must be notarized. If you are preparing your lien documents on your own, it is important to remember not to sign them until you and the notary can sign together. The state of Texas has very specific requirements about what information must be included on the lien. Failure to provide all the required information may result in the lien being invalidated.
A Texas mechanics lien must contain:
- A statement of the amount of the unpaid claim;
- The name and last known address of the owner;
- A sworn statement outlining what work was performed and/or what materials were furnished;
- The name and address of the claimant’s employer or person or company to which the claimant furnished the materials or labor;
- The name and last known address of the original contractor;
- A sufficient and “legally identifiable” description of the property against which the claimant is filing a lien;
- The claimant’s name, mailing address, and, if different, physical address; and
- Dates and to whom notices were sent and;
- Your name, contact information, and address.
It is also important that you know how to properly format your documents, as each county in Texas has different requirements and fees. Check with the county in which you are filing and make sure that you are aware of how they would like the documents formatted.
A good example of this is when a lien is being claimed against a homestead property. In this case, the lien has to contain a notice that states “NOTICE: THIS IS NOT A LIEN. THIS IS ONLY AN AFFIDAVIT CLAIMING A LIEN.” The notice must be printed, stamped, and typed in at least 10-font boldface at the top of the page.
Step 4 – Filing a Mechanics Lien
After a mechanics lien has been prepared and notarized, it is time to file your lien. Again, all mechanics liens in Texas must be notarized and filed in the county where the work on the property was performed.
Below is the process for filing your lien:
- Mail or personally deliver the original copy of the Affidavit of Lien to the county clerk’s office. Some counties do allow e-filing, so be sure to check with the clerk’s office beforehand.
- Pay the applicable filing fee. Be aware that some counties apply fees by the page, so contact the clerk’s office beforehand to see how to minimize costs.
- Once the lien is recorded, get a stamped copy of the recorded lien for your records.
Texas law requires that the lien is served to the owner of the liened property prior to the recording of the lien and not later than the 5th business day after the recording of the lien.
Most of the time, mechanics liens are paid without having to pursue further action. Whether or not this is the case every time, once a lien is served you can be confident that you have taken proper legal measures to receive payment.
One important consideration is that in Texas, mechanics liens do not permanently affect a property’s title. This means that the property can be sold without your receiving payment.
Mechanics liens in the state of Texas remain valid for 2 years from the last date on which it could have been recorded or 1 year from the final completion of the work – whichever is later. After the lien expires, it cannot be extended.
A mechanics lien is possibly the most powerful tool in a contractor’s belt to ensure you are paid for any services you have performed. LienItNow can help you easily file a lien in Texas. What are you waiting for? Get the payment you deserve.