Filing Your Mechanic’s Lien in the Lone Star State
In most states, the preliminary notice is an important step for Subcontractors and Suppliers in the lien filing process. Texas is no exception. Luckily, you may have already met these requirements without knowing it.
While Texas does have a specific prelien form, an invoice or request for payment can be considered proper notice. The only other requirement is that these notices must be give to the client every 2 and 1/2 months from the start of the project. It is also always best to send these out via certified mail, as you will be able to recorde the dates that notices went out on the final lien document.
A Texas Mechanic’s Lien for a Subcontractor or lower tier claimant must be filed within by the 15th day of the 3rd month from the ldate on which indebtedness accrues. According to Texas law, debt accrues on the last day of the month in which you performed work. This means that you have 2 and 1/2 months from the last day of the last month in which work was performed. If you performed work on June 4th, your deadline for filing would be September 15th. The 2 and 1/2 month deadline always begins on the last day of the month. This allows for plenty of time to meet any prenotice requirements that may be required.
Be Sure Your Lien is Served in a Timely Manner
Serving your filed lien within the specified time limit is an important part of the mechanic’s lien process, as it could be the difference between a valid and invalid document. Pennsylvania lien statutes outline a very specific method of service on the owner of any property with a lien attached to it. The document must be served by a county sheriff, and the affidavit of service must be filed with the county prothonotary. This must be done within 30 days following the filing date of the lien document. Once you fall outside of the 30 day window, the sheriff will not be able to serve your document.
Pennsylvania law offers lien claimants a second chance for proper service should they miss the original service deadline. A lien claimant may file a praecipe for reinstatement. This document essentially extends the service window by an additional 30 days from the date that the praecipe is filed by having the prothonotary reissue the document. Once the clerk reissues the original lien, it can be sent to the Sheriff for service. A praecipe for reinstatement is not only useful if you miss the 30 day mark. Should the owner’s address change after the lien is filed, reservice upon the new address is now possible. Lienitnow has filed this document for clients who are worried that the owner did not receive the original mechanic’s lien and would like to attempt service upon an alternate address. In our experience, most states offer a deadline for service which is greater than 30 days and does not require process service by a county agency. Although Pennsylvania may have more intricate requirements for service than most states, the praecipe for reinstatement offers a safety net for mechanic’s lien claimants who would like to properly serve their document.
Deciding to file a mechanics lien is a often a difficult decision. It should not be. Many companies do not want to upset their customers by filing a mechanics lien, but a mechanics lien is the only way that the law permits you to securitize the value of the labor and materials you provided to a project. Rather than upsetting a customer, companies will simply allow the mechanics lien deadline to pass, thereby waiving a valuable legal right.
However, the reality is that a mechanics lien can have an effect that results not only in your company getting paid more quickly, but also as a company that will tolerate only so much when payments are not made for work or materials provided to a project.
Here are some suggestions to help you decide to go ahead with deciding to file a mechanics lien. Each “yes” answer is worth one point. If you reach 2 or more points, then it may be time to decide to file that mechanics lien.
Have payments on the project been consistently late?
Has the amount owed to you exceeded your internal limit on receivables?
Is the deadline for filing a lien approaching?
Have you completed your work or delivered your materials more than 30 days ago?
Have you heard of other companies filing liens on the Project?
If you answered yes to more than one of these questions, then you may want to file a mechanics lien claim. If you feel nervous about actually filing a construction lien before giving any notice, you can always provide the owner and anyone you have a contract with what is called a “prelien notice” or “notice to owner.” It’s a warning shot that lets everyone know that you’re about to file a construction lien before you actually pull the trigger.
The nationwide mechanics lien filing tools provided by LienItNow.com complete the job of collecting unpaid project money. File a lien on the property with ease through our online system. We can help with all the different documents you need for a property lien. Use all the tools at your disposal, use LienItNow.com.
Credit managers aren’t lawyers, but they do need to know the law…at least as it relates to keeping their receivables secure and preserving the company’s legal right to collect. When securing a receivable is not done, or isn’t done correctly, collecting the money owed can become more difficult.
Construction projects in general provide a special legal right to collect money: the mechanics lien or construction lien claim. Depending on what State the project is located in, different rules can apply to filing a mechanics lien. If you are not using a construction lien filing service like LienItnow.com, then you should make sure you know the rules to filing a property lien in that State.
To secure your collections you don’t need to play hardball with your customers. Friendly phone calls can work just as well as threatening letters, and when payment is still not received, going the legal route by filing a mechanics lien has a big effect. Having a solid compliance system can mean the difference between receiving prompt payment and wasting valuable time and effort and not getting paid.
Questions that often arise in any given situation are:
Each of these questions are ones that credit managers ask themselves every day, and many of the answers vary state to state. Having a company like LienItnow.com to assist you in answering these questions can be invaluable.