Frequently Asked Questions - Texas Mechanics Lien
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What is a Texas mechanics' lien Claim?
In Texas, mechanics' liens are created by constitutional right and by statute. A Constitutional Lien, which establishes a Texas Construction 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.
It is important to understand that just because the Texas Constitution and the Texas Mechanics Lien Law (property code) establish liens for contractors and subcontractors, Texas mechanics liens are not automatic. The protection a Texas mechanics lien provides under the Texas lien laws can only be provided if the lien is actually filed. In Texas, construction liens are not effective against innocent purchasers of property, or against lenders, unless the construction lien is filed in the form of a lien affidavit.
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.
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Who can file a Texas Construction Lien Claim?
Texas lien laws are some of the most expansive in the nation in terms of who has Texas construction lien rights. The Texas construction lien law provides broad protection for nearly everyone who provided labor, materials or services on a Texas construction project. According to the Texas lien laws, 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. The Texas mechanics lien law also states that 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. Even real estate brokers of commercial property have Texas construction lien rights under the Texas lien laws if their commissions are unpaid. Note that claimants that are working on Texas Homesteads must file a Homestead Affidavit of Lien, which requires its own specific information.
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Are pre-lien notices for a Texas mechanics' lien Claim required?
Texas has a few different types of prelien notices, known as Disclosure Statements, Notice of non-payment, and a Homestead Warning. Each type of Texas prelien notice serves a different purpose, and are differentiated below. Each type of prelien notice is required to comply with Texas lien law, and to ensure that a Texas construction lien will be valid.
On Texas residential property, the contractor has its own specific pre-lien notice, known as a Disclosure Statement. The Texas Disclosure Statement is required to be provided prior to the owner executing the contract. The Texas mechanics lien law sets for the contents of the Texas Disclosure Statement, which sets forth all of the rights and responsibilities of the owner, as well as the lien rights and payment rights of the contractor, subcontractors and suppliers. The Disclosure Statement required by the Texas lien laws on residential projects not only provide a benefit to the owner by explaining how the construction lien process works, but also provides a benefit to the contractor and subcontractors by ensuring that potential Texas construction lien rights are secured.
For all projects, the contractor should attach a list of subcontractors and suppliers to the contract, or provide one with its first payment request. 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 (i.e. is a subcontractor or supplier), notice of unpaid amounts, or a prelien Notice of Non-Payment, 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. Texas Notices of Non-payment have specific legal effects that provide enormous benefits: when payment is due and owing, providing a notice of non-payment freezes funds owned from the owner to the general contractor, essentially ensuring that the noticing subcontractors and suppliers will be paid for the work performed or materials delivered. For work performed on Homesteads, the Notice of Non-Payment must contain specific information and warnings to the homeowner.
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Can you file a Texas mechanics' lien Claim without a pre-notice?
Claimants whose contract is not with an owner, such as subcontractors or suppliers, should provide the project owner periodic written notices of the unpaid value of the claim. These notices should be issued periodically and not solely upon the completion of work. If the Texas pre-lien notices of non-payment are not provided, the mechanics lien can be invalidated even if the mechanics lien itself is filed properly.
Texas pre-lien notices of non-payment to the owner and original contractor should be issued no later than the 15th of the third month following each month in which the claimant performed all or part of its work.
In the case of lower tier claimants “e.g. sub-subcontractors”, these periodic notices should be provided to the original contractor no later than the 15th day of second month following each month of which the claimant performed all or part of its work.
Disclosure Statements and Homestead Warnings must be provided to preserve lien rights on residential and homestead projects.
Click Here to File a Texas Prelien Notice of Non-payment, Disclosure Statement, or Homestead Warning Document
When should a Texas mechanics' lien Claim be filed?
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.
Click Here to File a Texas Construction Lien Claim Document
How much does it cost to file a Texas mechanics' lien Claim?
LienItNow.com prepares, files and serves Texas mechanics' liens for a fee of $290.00. This fee does not include Texas pre-lien notices, which can be provided for an additional fee.
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Do I need a written contract to file a Texas Mechanics Lien?
No, unless the improvements are to homestead property or the mechanics lien claimant is an architect, engineer or surveyor, a written contract is not needed. The contract may be either expressed in writing or implied.
Click Here to File a Texas Property Lien Document
How does filing a Texas mechanics' lien Claim help me get my money?
On a private project, the Texas mechanics' lien places an encumbrance on the property that makes it difficult to resell or re-finance the property without first removing the mechanics lien.
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What is a Texas Stop Notice and why should it be filed
LienItNow.com prepares and serves Texas Stop Notices for a fee of $125.00. A Stop Notice is a notification that has the ability to enhance the effectiveness of a mechanic's lien. A Stop Notice, or a notice to withhold funds, is sent to the company that is financing or funding the construction funds for a project. Once that company receives the Stop Notice, that company has notice that it should withhold sufficient money to satisfy the stop notice claim. The purpose of the Stop Notice is to provide the lender, financiers or funders of the construction project notice that there is money owed to a contractor, subcontractor or supplier so that an inquiry can be made as to why that money is not being paid.
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What is a Texas Amendment to a mechanics' lien Claim?
LienItNow.com prepares, files and serves Texas Amendments to mechanics' lien Claims for a fee of $250.00. Amendments to a mechanics' lien claim are often needed when something about the lien claim changes. Common changes to a lien claim are increases or reductions in the amount due to the lienor, or a change to the last date of work.
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When should a Texas Discharge of mechanics' lien claim be filed?
LienItNow.com prepares, files and serves Texas Discharges of mechanics' lien Claims for a fee of $85.00. Once the lienor has been paid the amount contained in its lien claim, or has come to an agreement that requires the lien claim to be removed from the property records, a Discharge of mechanics' lien Claim should be filed.
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How much does it cost to file an Extension of a Texas mechanics' lien Claim?
LienItNow.com prepares, files and serves extensions of Texas mechanics' lien Claims for a fee of $85.00. All lien claims expire after a certain period of time, and filing an extension of the mechanics' lien claim prolongs the expiration date. Texas law, however, does not permit an extension of mechanics' lien claims.
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Can I file a Bond Claim on a Texas Project?
LienItNow.com prepares, files and serves Texas Bond Claims for a fee of $275.00. Bond claims can only be filed on a project where the owner, contractor or subcontractor has obtained a payment bond to ensure that every contractor receives payment for the work performed on the Project. The payment bonds issued by sureties for construction projects have specific timing requirements, but most require claimants to submit claims against the bond within sixty to ninety days from the claimants' last date of work. Bond claims are as or more effective than a lien claim because the payment bond acts as a guarantee that payment will be made for work properly completed.
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Do I need to file a Pre-Notice to make a claim against a Texas payment bond?
LienItNow.com prepares, files and serves Texas Pre-Notices for bond claims for a fee of $50.00. Depending on the terms of the payment bond, pre-notices may or may not be required. LienItNow.com recommends that, prior to or immediately after starting work or delivering materials to a project, subcontractors and suppliers, file a pre-notice that it is a potential beneficiary of the construction project's bond.
Click Here to File a Texas Pre-Bond Notice Document