Thursday, May 30, 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.

1 comment:

  1. Prime Construction & Remodeling LLC is a full service design and construction firm servicing the entire state of New Jersey. With a commitment to communication throughout the construction process, our goal is to establish long term relationships by exceeding expectations and building trust through exceptional performance. Our business standard is reflective upon our core values – professionalism, honesty and integrity. That’s why our biggest business is repeat business.

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