The Tools For Getting Paid – Lien
THE TOOLS FOR GETTING PAID – LIEN REMEDIES FOR BUILDERS AND CONTRACTORS
I’ve always said that one of the most important business relationships that a builder or contractor should have is with a lawyer that is well-versed in the intricacies of construction law. A construction law attorney can help a builder avoid trouble by providing the right contracts and right corporate documents Business Law Attorney. A construction law attorney can also help a builder should something happen on a project, and can provide representation against allegations of construction defects Residential Construction Defect Liability. But one of the most important roles of a construction law attorney is to help make sure that builders and contractors get paid via the exercise of lien remedies.
Texas Law Provides Lien Rights To Builders
Builders and contractors seeking to enforce payment of amounts owed to them have a number of options under Texas law. One of the most powerful of these options is to file and perfect a lien. While there are many types of liens available under Texas law, the two most common types are statutory liens and constitutional liens.
Statutory liens arise under the mechanics and materialman provisions in Chapter 53 of the Texas Property Code. These types of liens allow contractors, subcontractors, or material suppliers to file a lien against privately owned real property that they furnished labor and/or materials to. While these liens provide powerful remedies to contractors, it is important to note that stringent deadlines apply. Accordingly, it is highly beneficial to consult an attorney as soon as possible so as to avoid missing deadlines, or otherwise making a mistake which would render the lien unenforceable.
Constitutional liens arise under Article XVI, Section 37 of the Texas Constitution. These types of liens are not subject to the stringent notice requirements, nor the stringent deadlines of a statutory lien, but are only available to an “original contractor”. Thus, subcontractors and material providers are not able to seek relief against a property owner through the filing of a constitutional lien.
It is also important to note that neither of these types of liens apply to public (state or governmental) projects. A separate bond lien procedure applies to those types of projects.
Regardless of the type of lien, once a lien is filed and perfected, the party seeking payment has substantial bargaining power. This is true because if the account still isn’t settled after the filing of a lien, Texas law provides that the lienholder may file suit to foreclose upon the lien property to ensure payment through that process. This is a powerful remedy. Indeed, the power of a properly perfected lien is such that sometimes the mere notice of the potential of a lien is enough to secure payment of past due amounts. Thus, if you aren’t getting paid on a project, it is a great step to consult with an attorney familiar with Texas lien law as soon as possible, so that they can begin the process before filing deadlines begin to pass and these powerful debt-collection tools begin to slip away.
A Skilled Attorney Can Help Protect Your Business
The information outlined above is merely a basic summary of Texas law and does not cover the full breadth of lien and collections characteristics, nor the specific considerations required to determine the best procedures and choices for a particular business. A skilled attorney can discuss your business with you to advise of your best options and best practices to fit the specific needs of your business.
Please feel free to make a call today to schedule a free consultation with me to discuss your businesses’ needs.
* The information contained herein is made available by the lawyer or law firm publisher for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this site you understand that there is no attorney-client relationship between you and the publisher. The site and associated blog posts should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
*In accordance with Internal Revenue Service requirements, this is to inform you that any information on this website that could be construed as United States tax advice is not written or intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed on this website. See IRS Circular 230.