Mechanics and Materialmen’s Liens
What is a lien?
A lien is a sworn legal document that encumbers real property and lists the debt accrued, stating how much is owed. This document is used by creditors as a way of guaranteeing payment for services or materials rendered. If payment is not made, the resulting consequences could be the real property owner’s inability to sell or refinance the property.
What is a Mechanic’s Lien?
A contractor, subcontractor, or construction worker hired for a specific job can protect their right to be paid by filing a special type of lien. This lien is called a mechanic’s and materialmen’s lien. It is filed against the property where the work was performed. The lien covers almost all labor, materials, supplies, and equipment involved in making improvements to real property. The lien can be filed before the project begins. It can also be released or removed once payment has been made. It also can be filed as a way to get paid for work already done. For people in the building trades, a mechanic’s and materialmen’s lien is often the least expensive and most effective option way to get paid. It has become the practice for many categories of contractors, architects, engineers, and laborers to often serve and file all needed lien documents in order to protect their unpaid invoices.
Types of Mechanics and Materialmen’s Liens
Statutory Lien – This lien is available to anyone who supplies labor and/or materials to a construction project through a written or verbal agreement with the owner’s agent, contractor or subcontractor. These liens usually have specific and stringent deadlines. They also have strict notification rules enforcing when, how, and to who these notifications are sent.
Constitutional Lien – This lien is provided by the Texas Constitution. It is only available to companies or individuals who have a contract with a property owner where the project is under construction. These types of liens don not require any type of notification. They do not need to follow the statutory lien timelines. If it is not filed before the owner sells the property, the lien will not be enforceable to the new owner that purchase the real property. In other words, the contractor can lose his lien rights.
Who can file to a mechanic’s lien?
A mechanic’s lien can be filed by any person who provides labor, materials, fixtures or tools on a project. This is particularly for the construction, repair or improvement to a house, building, levee, or embankment. Most work that you would associate with homes or commercial buildings is covered. Other eligible people include:
- Makers of specially fabricated materials, even if the material is not delivered or installed. See, Texas Property Code. §53.021(b)
- Architects, engineers, and surveyors who prepare a plan or plat under a written agreement with the owner. Id. §53.021(c); §53.023(3)
- 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. Id. §53.021(d)
- Demolition specialists who provide labor or materials for demolition of a structure on real property under a written contract with the owner. Id. §53.021(e)
By not following the real property laws relating to liens, a person can file what is considered an invalid lien. It is important to know the deadlines and notice periods.
Lien Timelines and Notices
It is important that lien claimants know the following information to ensure that you or your company are following legal requirements:
- The lien timelines run from the oldest invoice. If work was performed from January through March and remains unpaid, the notice timeline begins in January. From then, the party (e.g. sub-subcontractor or material supplier) has until March 15 to send out a notice for work performed throughout those three months.
- The timeline for notices begins when the materials are delivered or supplied to the contractor for use within the construction project or when the labor was performed, not when either was invoiced.
- Construction law attorneys perform the diligence to show that the proper notice was sent.
Filing a Mechanics & Materialmen’s lien in the State of Texas can be a complicated process. Our board certified real estate lawyer has the experience and skills related to Texas mechanics and materialmen’s liens. We want to help you achieve the outcome you need. To discuss your questions about liens, we invite you to talk to us. Call our attorneys in Houston at 713-454-7875 or email us your concerns.