What You Need to Know about Mechanic’s Liens in Texas
You’ve done the job. Now, you rightfully expect to pay for it. Anyone who works in the building trades knows that this sometimes means wishful thinking. That’s why it is important to know how a mechanic’s lien can help in such situations.
Mechanic’s liens specifically apply to construction projects. In Texas, a mechanic’s lien may be asserted either under the state constitution or under Texas statutes. In some circumstances, it is possible to file both a “Constitutional Mechanic’s Lien” and a “Statutory Mechanic’s Lien.”
Constitutional Mechanic’s Lien
The Texas Constitution provides specific language regarding mechanic’s liens. It is found in Article 16, Section 37 and references those who are entitled to assert mechanic’s liens under the state constitution:
“Mechanics, artisans, and material men, of every class, shall have a lien upon the buildings and articles made or repaired by them for the value of their labor done thereon, or material furnished therefor; and the Legislature shall provide by law for the speedy and efficient enforcement of said liens.”
There are limitations for placement of a constitutional mechanic’s lien on the property. To assert a constitutional mechanic’s lien, a contract must exist between the contractor and the property owner. This would preclude subcontractors from making a mechanic’s lien. For contractors who qualify, there are some advantages to a constitutional mechanic’s lien.
Unlike statutory mechanic’s liens, there are no notice requirements for filing the lien. The time limits are not as rigid and may extend to two or four years. Constitutional mechanic’s liens are generally used more often when the contractor has missed deadlines for statutory liens. They may only be asserted for labor and materials attached to building and structures.
Statutory Mechanic’s Liens
According to Texas law, various levels of contractors are entitled to assert a mechanic’s lien for unpaid work. Of course, the general contractor has a right. Also, subcontractors who were assigned work from another contractor may place a mechanic’s lien on the property where they have provided labor or materials.
Not sure what this means? Here’s an example. A general contractor is asked to oversee new construction a shopping center. Inside walls are put up by a drywall subcontractor, who hires laborers from another company. The general contractor, the drywall subcontractor, and the third company who provided laborers may all assert statutory mechanic’s liens. Liens may also be placed for failure to pay a supplier for materials.
In order to place a statutory mechanic’s lien, there are very stringent rules. For one, there is a preliminary notice requirement. Texas divides notification requirements according to the classification of the entity asserting the lien. The General Contractor is required to give notice to the property owner. Subcontractors and anyone not contracted by the General Contractor must provide notification to both the property owner and general contractor. Time limits vary according to the nature of the project.
Mechanic’s liens can be confusing, and it is advisable to contact an attorney with experience in asserting them. This should be done as soon as there appears to be an issue with unpaid work or materials.