Have Questions about Construction Liens?
Below you will find some frequently asked questions (FAQs) we get at the offices of Attorney Javier Marcos. Please feel free to contact us or use the form on this page to send us your specific questions. We always offer free evaluation of your case.
Construction liens are you best chance to get paid for the work, equipment or products that you put into a project whether it be a residential property or commercial property. The Texas Property Code protects contractors, sub-contractors or anyone who put in work on a project to get paid per the contract. A construction lien is your best chance at getting paid because it puts an “encumbrance” on a property so that generally it cannot be sold, refinanced without first taking care of its debts and outstanding liens.
In the event that you are a sub-contractor, it creates an enforceable situation between the owner and the general contractor to make sure that the general contractor pays out to all the sub-contractors especially if the general contractor has already been paid.
It does not matter who hired you for the job, whether it was the owner or the general contractor the owner hired to get the project done. You as a sub-contractor that provided a service or product to the project is entitled to payment and as such can file a lien on the construction project.
Any General Contractor, Subcontractor, Laborer, Material Supplier, Architect, Engineer, or Surveyor, who has provided labor, materials, equipment, plans, plats, or surveys to a Property for the construction or repair of a house, building, or a structure, may Lien a Property (file a Lien against the Property).
There are six legal processes that you can use to help you get paid for work you have done or products you have provided for a project on a privately owned project:
- send a Pre-Lien Payment Demand Letter to the Property Owner, General Contractor, and the contractor who hired you
- file a Lien Affidavit against the Property
- serve the Property Owner, General Contractor, and contractor who hired you with a Notice of Lien Filing Payment Demand Cover Letter
- send a Pre-Foreclosure Payment Demand Letter
- send a Payment Demand Letter to the debtor only
- file a Lawsuit to foreclose on the Mechanics Lien and/or for breach of contract.
Each one of these methods can be used independently or in conjunction with one another.
The following steps are typically necessary in order to perfect a statutory lien under the Texas Property Code:
Prepare and Serve the Pre-Lien Notice Letter: If you were hired by anyone other than the property owner, before you can file a lien you must serve the owner and general contractor with a Pre-Lien Notice Letter in accordance with Texas Property Code Section 53.056. Contained within the Pre-Lien Notice Letter you should include a demand for immediate payment and a threat that if payment is not made, that you will move forward with the filing of a lien. A pre-lien notice letter should be sent by a construction lawyer on law firm letterhead to maximize your opportunity to enforce immediate payment.
Perform a Property Record Search: Texas Property Code Section 53.054(a)(6) requires the lien affidavit to contain a legally sufficient description of the property sought to be charged with a lien. To ensure this requirement is fully satisfied, you should research the Texas Real Property Records and/or the County Appraisal District and obtain the actual legal description of the property.
Perform a Registered Agent Search: Although the Texas Property Code only requires the lien documents be served on the owner and contractor(s) at their last known address, you should locate their legal Registered Agent through the Texas Secretary of State and/or the Texas Comptroller and ensure that all legal documents are served on their proper legal representatives and placed in the right hands.
Prepare the Lien Affidavit: A lien is initiated by preparing and filing a “lien affidavit” in accordance with Texas Property Code Section 53.054. The lien affidavit must include at a minimum the following information: a sworn statement of the amount owed; the name and last known address of the property owner; a general statement of the work performed and when it was performed; the name and last known address of the contractor who hired you; the name and last known address of the general contractor; a legal description of the property; your mailing and physical address; and a statement identifying when and how all pre-lien notices were sent. The lien affidavit is signed before a notary by the person claiming the lien. Click here to File A Lien.
File the Lien Affidavit: After you prepare the lien affidavit, you need to prepare a letter to the county clerk’s office to file the lien affidavit. Send the letter, the lien affidavit, and the filing fee to the county clerk’s office where the property is located before the statutory deadline.
Serve the Filed Lien Affidavit and Send a Second Demand for Payment: Texas Property Code Section 53.055 requires the lien affidavit to be served on the property owner, the general contractor, and the first-tier subcontractor (if applicable) by certified mail within five days after it has been filed with the County Clerk’s Office. In this notice letter, you should include another demand for payment with a representation that if payment is not immediately made you will move forward with filing a lawsuit to foreclose on the property and seek damages in the principal amount owed, plus interest on that amount, all incurred attorneys’ fees, and cost of suit. This letter should be prepared and sent by a construction attorney on law firm letterhead to maximize the chances of getting paid.
Commercial Property Lien
The lien affidavit must be filed with the County Clerk’s Office in the county where the property is located by no later than the 15th day of the fourth month from when you last worked at the project, excluding punch work and warranty work.
NOTE: The deadline to file a Lien is not extended if the 15th falls on a Saturday, Sunday, or legal holiday. If your deadline falls on one of these days, file the Lien Affidavit on the preceding business day. The Lien Affidavit must actually be filed, not simply placed in the mail or waiting at the clerk’s office to be filed.
Residential Property Lien
The Lien Affidavit must be filed with the County Clerk’s Office in the county where the property is located by no later than the 15th day of the third month from when you last provide labor and/or material to the property, excluding punch work and warranty work.
NOTE: The deadline to file a Lien Affidavit is not extended if the 15th day falls on a Saturday, Sunday, or legal holiday. If your deadline falls on one of these days, file the Lien Affidavit on the preceding business day. The Lien Affidavit must actually be filed on or before the 15th, not simply placed in the mail or waiting at the Clerk’s office to be filed.
The Texas Property Code requires the following specific categories of information to be in a lien affidavit in order for the lien to be valid:
- Identification of the Claimant – the lien affidavit must identify the registered legal business name or DBA name as well as the person that is filing the lien for the business as well as his/her title if applicable. If the lien affidavit is being filed by an individual, then only the full name of the person is required. In addition, the mailing and business address of the claimant as well as the county in which the person who signs the affidavit is a resident is required.
- Identification of the Owner or Reputed Owner – The lien affidavit must include the name and address of the property owner or the person or entity reasonably thought to be the owner.
- A Description of the Work Performed and Materials Furnished – All claimants must detail all the work and materials provided to the project. All claimants except General Contractors must also state the months in which the work or materials were provided. In certain cases, invoices may satisfy this requirement but in some situations it is simpler to have one document detail all the work, materials, equipment and products furnished for the project.
- Identification of the Person Who Hired the Claimant – This requirement is satisfied by including the name and last known address of the person or company that hired you.
- Identification of the General Contractor – If you are a sub-contractor, the name and last known address of the project general contractor.
- A Description of the Property – The affidavit must contain a legal description of the property. The description must be detailed enough for the tract of land to be identified with reasonable certainty. A lot-and-block description of the property is preferred, but if not available a lot, block, and subdivision description, or a metes-and-bounds description are also sufficient. This information can be difficult to obtain and a failure to properly describe the property could result in an invalid lien.
- The Amount of the Claim – The lien affidavit must include the amount of which you are owed for the labor and/or materials provided to the project only.
- Identification of Statutory Notices – All claimants, other than general contractors must state the date on which each pre-lien notice letter was sent to the owner and general contractor and identify the method by which the notices were sent.
- The Affidavit Must be Sworn Under Oath – This is accomplished by concluding the affidavit with what’s known as a jurat, whereby the affiant affirms or swears under oath that the contents of the affidavit are true. The jurat is made before a notary. Failure to use a jurat in the affidavit will render it void.
Pursuant to Texas Property Code Section 53.024, the amount of a subcontractor’s lien may not exceed: (1) an amount equal to the proportion of the total subcontract price that the sum of the labor performed, materials furnished, materials specially fabricated, reasonable overhead costs incurred, and proportionate profit margin bears to the total subcontract price, minus (2) the sum of previous payments received by the claimant on the subcontract.