Texas Mechanic s Liens

Transcription

1 Texas Mechanic s Liens TIME DEADLINES (When to File and Serve Your Mechanic s Lien & Pre-Lien Notice) To File a Lien--Go to: Texas Mechanic s Lien Forms More Info: Note as to Residential Homesteads: If you are a general contractor working on an owner-occupied residence, that owner has certain homestead rights (Texas Property Code Section ). To file a mechanic s lien on this property, one of the requirements is to have a written and signed contract (signed by both married couples) setting forth all the terms of the agreement. The contract must be signed before any work begins. A homestead is defined in Texas Property Code Section as an owner-occupied residence that is either: a) no more than 10 acres of land if in an urban area or b) no more than 200 acres if in a rural area. Occupants can also use the property for a business. And, the contract must be recorded with the County Clerk s office. No specific time is elucidated in the statute, so the recommendation is to file as soon as possible, hopefully before the work begins.

2 General Contractors (defined as generals, subs and suppliers that have a direct contract with the owner) RESIDENTIAL least once a month. Step 2 #1 Notice of Intention to File a Lien (general) Step 3 #2 Affidavit for Mechanic s Lien (generalresidential) File with the county clerk by the 15 th of the 3rd month following overall completion of the entire project. #3 Notice of Intention to File Suit (general) Step 5 Lawsuit to Foreclose Within 1 year from the deadline to file a Lien COMMERCIAL least once a month. Step 2 #1 Notice of Intention to File a Lien (general) Step 3 #4 Affidavit for Mechanic s Lien (generalcommercial) File with the county clerk by the 15 th of the 4th month following overall completion of the entire project. #3 Notice of Intention to File Suit (general) Step 5 Lawsuit to Foreclose Within 1 year from the deadline to file a Lien

3 1 st Tier Sub or Supplier (your contract is with the General ) RESIDENTIAL least once a month. Should be attached to Second and Third Month Notices. Step 2 #5 Notice of Contractual Retainage (sub) Serve the owner within 30 days of the completion, termination or abandonment of your contract. Alternatively, within 30 days of the termination or abandonment of the owner's contract with the general. Only one Notice is required. Step 3 #6 Second Month Notice (Notice of Unpaid Balance Residential) the 15th of the 2nd month following every serve multiple Notices, depending on how many consecutive months are unpaid. #7 Third Month Notice (Notice of Unpaid Balance and Demand for Payment Residential) the 15 th of the 3rd month following every serve multiple notices just like the Second Month Notice. Texas Property Code is somewhat unclear as to the need for this Notice on residential projects in addition to serving the Second Month Notice do so to be safe and as a further demand for payment. Step 5 #8 Notice of Intention to File a Lien (sub) Step 6 #9 Affidavit for Mechanic s Lien (sub- Residential) File with the county clerk by the 15th day of the 3rd month following completion of your portion of the work Step 7 #10 Notice of Intention to File Suit (sub) Step 8 Lawsuit to Foreclose Within 1 year from the deadline to file a Lien

4 COMMERCIAL least once a month. Should be attached to Third Month Notices. Step 2 #5 Notice of Contractual Retainage (sub) Serve the owner within 30 days of the completion, termination or abandonment of your contract. Alternatively, within 30 days of the termination or abandonment of the owner's contract with the general. Only one Notice is required. #11 Third Month Notice (Notice of Unpaid Balance and Demand for Payment Commercial) the 15 th of the 3rd month following every serve multiple notices, depending on how many consecutive months are unpaid. Step 5 #8 Notice of Intention to File a Lien (sub) Step 6 #12 Affidavit for Mechanic s Lien (sub- Commercial) File with the county clerk by the 15th day of the 4th month following completion of your portion of the work Step 7 #10 Notice of Intention to File Suit (sub) Step 8 Lawsuit to Foreclose Within 1 year from the deadline to file a Lien

5 2nd Tier and Below Sub or Supplier (your contract is with a sub) ) RESIDENTIAL least once a month. Should be attached to Second and Third Month Notices. Step 2 #13 Notice of Contractual Retainage (sub-sub) Serve the owner within 30 days of the completion, termination or abandonment of your contract. Alternatively, within 30 days of the termination or abandonment of the owner's contract with the general. Only one Notice is required. Step 3 #6 Second Month Notice (Notice of Unpaid Balance Residential) the 15th of the 2nd month following every serve multiple Notices, depending on how many consecutive months are unpaid. #7 Third Month Notice (Notice of Unpaid Balance and Demand for Payment Residential) the 15 th of the 3rd month following every serve multiple notices just like the Second Month Notice. Texas Property Code is somewhat unclear as to the need for this Notice on residential projects in addition to serving the Second Month Notice do so to be safe and as a further demand for payment. Step 5 #8 Notice of Intention to File a Lien (sub) Step 6 #9 Affidavit for Mechanic s Lien (subresidential) File with the county clerk by the 15th day of the 3rd month following completion of your portion of the work Step 7 #10 Notice of Intention to File Suit (sub) Step 8 Lawsuit to Foreclose Within 1 year from the deadline to file a Lien

6 COMMERCIAL least once a month. Should be attached to Second and Third Month Notices. Step 2 #13 Notice of Contractual Retainage (sub-sub) Serve the owner within 30 days of the completion, termination or abandonment of your contract. Alternatively, within 30 days of the termination or abandonment of the owner's contract with the general. Only one Notice is required. Step 3 #14 Second Month Notice (Notice of Unpaid Balance Commercial) Serve the general contractor by the 15th of the 2nd month following every month which has unpaid work. May have to serve multiple Notices, depending on how many consecutive months are unpaid. #11 Third Month Notice (Notice of Unpaid Balance and Demand for Payment Commercial) the 15 th of the 3rd month following every serve multiple notices, depending on how many consecutive months are unpaid. Step 5 #8 Notice of Intention to File a Lien (sub) Step 6 #12 Affidavit for Mechanic s Lien (sub- Commercial) File with the county clerk by the 15th day of the 4th month following completion of your portion of the work Step 7 #10 Notice of Intention to File Suit (sub) Step 8 Lawsuit to Foreclose Within 1 year from the deadline to file a Lien

7 Suppliers of Custom Fabricated or Special Ordered Material (suppliers only and not contractors) RESIDENTIAL Step 1 #15 Notice of Specially Fabricated Items (Residential) Materials Never Delivered. Serve by the 15th of the second month after acceptance of the order and before delivery. If your contract is with a general contractor, serve the owner only. If contract is with a sub, serve the owner and general. Lien valid even if no delivery or if order is later canceled. Send your standard invoice by the 15 th of the month following the month of delivery. This is the only notice required if no delivery. Materials Delivered. After delivery, serve in addition, form # 6, followed by form # 7. Then follow the procedures in Steps 5 through 8 under the 1 st Tier Subs/Suppliers- (Residential) section above. COMMERCIAL Step 1 #15 Notice of Specially Fabricated Items (Commercial) Materials Never Delivered. Serve by the 15th of the second month after acceptance of the order and before delivery. If your contract is with a general contractor, serve the owner only. If contract is with a sub, serve the owner and general. Lien valid even if no delivery or if order is later canceled. Send your standard invoice by the 15 th of the month following the month of delivery. This is the only notice required if no delivery. Materials Delivered, your contract is with the general contractor. After delivery, serve in addition, form # 11. Then follow the procedures in Steps 5 through 8 under the 1 st Tier Subs/Suppliers-(Commercial) section above. Materials Delivered, your contract is with a subcontractor. After delivery, serve in addition, form # 14 and form # 11. Then follow the procedures in Steps 5 through 8 under the 2nd Tier Subs/Suppliers- (Commercial) section above.

8 How to Count the Days Texas Mechanic s Lien Texas Pre-Lien notices and Texas mechanic s liens are unforgiving if you miss the deadline by one day, your lien rights will be lost. Assume hypothetically you last furnished labor and materials on April 10 (these examples are based on calendar year 2016, but the same principles apply to any year) and have 90 days thereafter to record your Texas lien. To count the days correctly, follow these steps: Ignore the first day the day of last furnishing the labor or materials (April 10). The courts give you 90 full days after completion and that would not be the case if you finished at 5:00 P.M. on April 10 and it counted as the first full day. It would end up being some strange fraction of a day that is too hard to calculate. Day 1 will be April 11. Day 1 can be either a workday, weekend or holiday. In this case, the first day is Monday, April 11. Count with calendar days not work days. Count weekends and federal holidays. If the LAST day falls on a weekend or holiday, you get the next business day to record your Texas mechanic s lien. When you record a Texas lien with the Court Clerk/Recorder, it is easy to know the deadline is met because the papers are date-stamped. If you are only serving (for example a pre-lien notice on the owner or general contractor) and not recording, you are OK in most states if the mailing is stamped and placed in a post office box or the post office before mail pick-up, by the last day even if the addressee gets it later. You will have proof of mailing to show it was mailed on time. However, some states require the mailing be received by a certain date. If you have any doubts, give us a call and we will research the Texas mechanic s lien statute for you ( ; info.nationallienlaw@gmail.com). There is a big difference between a time limit of 3 months and 90 days. For 3 months you do not count the days and simply go forward three months. In our example of the last day of furnishing labor or materials being April 10, the third month deadline would be July 10. The 90 th day is actually July 9--this is one day shorter because May has 3I days. To summarize, if the last day of work was April 10, 2016, you have until July 11, 2016 to record the Texas mechanic s lien because the 90 th day is Saturday, July 9. When in doubt file or serve the lien early. If you have no choice but to do it on the last day, make it earlier in the day and go in personally to the clerk s office--in case you have to go back and pick-up more papers, forget something or get caught in traffic. And, if you think the last day is on a weekend or holiday play it safe and file the Texas mechanic s lien on the business day before. If you have not recorded a Texas mechanic s lien before or are uncertain about the process, it would just be your luck to send it out by mail or overnight delivery, and have

9 the Clerk reject it for some technicality only to receive the Texas lien back in the mail after the time has expired. To prevent this, personally take it in at least the day before, so you have time to revise your paper work. It also gives you the advantage of being able to talk to a live person who will usually tell you exactly what format is required for the Texas mechanic s lien. Or pay approximately $75 and have a messenger service/process server (see the yellow pages) do it. Finally, never send the papers by regular mail (use overnight delivery) if you are 5 or less days before the lien deadline. Good luck. For more information and to view the Texas Mechanic s Lien Law Summary, CLICK HERE. Prepared by: