A Simple Guide to Understanding Texas Construction Lien Laws
Commercial and residential construction is the backbone of the American economy.
If you’re a contractor, you need to be aware of your legal rights. There are special legal instruments that you can use to protect your hard-earned work.
One of these legal instruments is a construction lien, or mechanic’s lien. This article is a simple guide to understanding a Texas construction lien.
Texas Construction Lien 101: What is it?
Let’s start with the simple definition of lien. When you file a lien on something, you claim ownership of that property while there is a debt against it. When the property owner satisfies the debt, you release the lien.
Most often, banks and lenders file liens. But anyone can put a lien on something as long as they have a legal right to that collateral.
A bank files a voluntary lien when someone takes out a mortgage on a piece of property. Bank liens also apply to things like cars and boats. As long as you owe money on the loan, the bank has a right to file a lien.
An involuntary lien is when you file a lien on a property without permission from the owner. Examples of involuntary liens are tax liens and mechanics liens.
Who Can File a Mechanics Lien?
Mechanics liens protect the rights of the construction industry. A restaurant can’t place a mechanic’s lien on you for not paying your dinner bill.
To have the right to place a lien on a property, the filing party must have done construction on that property. All contractors have this right including electrical, plumbing, and general contractors.
How to File a Lien?
Mechanics liens are only filed on a piece of property. They are never filed on the person or company that owns the property.
Filing a construction lien should be a last resort. It can cause serious problems for the construction project. If you need to file a lien, hire an attorney that specializes in Texas construction lien filings.
To have rights to the property, you must file the lien in the correct timeframe. It’s done after sending a preliminary notice to the property owner. Your attorney will then draft the lien to follow local and state laws.
The final step to file the lien is to record it at your local recording office. Each recording office has different requirements for how to file a lien. So always check with them before you go to record the lien.
What Happens Next?
Now that it’s filed, you must notify all parties involved about the filing. Then you must enforce the lien.
All liens have a deadline and you don’t want your lien to expire. Your attorney works with the associated parties to file suit and enforce the lien. If they pay the debt, then you release the lien by recording a release with the local recording office.
If not, your attorney continues on with the next step in the legal process. They pursue lien foreclosure action.
Know Your Rights and Protect Your Interest
Knowing how to file a Texas construction lien is essential for contractors in the state. The mechanic’s lien is a legal way to ensure payment for your services.
Using this legal tool is how you protect your interest in a property. It keeps all parties honest. And it gives you peace of mind when you work on large construction projects.
For more information on common legal issues, visit our blog. Our law firm specializes in getting your customers to pay their debts. We’re here to protect your legal rights!