We filed a lien for $80K in December, they subsequently paid and are now current.
We still need to perform and invoice $10K of work.
They also still owe $20K of retainage.
Do you recommend we amend or cancel lien or what until we are paid in full?
1 reply
Jan 22, 2020
First, it's worth mentioning that the Texas Property Code does not specifically allow for the amendment of Texas mechanics liens. So, while it's not uncommon for a lien claimant to attempt to amend their mechanics lien - doing so is a bit of an unofficial process and there aren't really any parameters on how or why a lien should be amended. Though, it's safe to say that any potential lien amendment would need to be made prior to the deadline for filing a mechanics lien.
It's also worth noting that mechanics liens are only available to the extent that construction payments are owed and unpaid. So, using a lien to leverage payment that's not actually owed/for work that's not yet been done is likely in bad form or could even lead to potential liability. What's more, once a mechanics lien has been paid and satisfied, that lien should likely be removed from the property pretty quickly. And, if the owner requests that a lien be released after it is satisfied, the lien claimant must actually execute that lien release within 10 days of the request. Once a mechanics lien has been satisfied, the lien should typically be released.
Now, if a mechanics lien hasn't been paid in full and some of the debt secured by the lien remains outstanding, then matters become less cut and dry. Levelset wrote about that situation here: Mechanics Liens and Partial Payment: What Are the Options?
Can another mechanics lien be filed if work is done but not paid for?
If a mechanics lien is filed, satisfied, then released - that generally won't prohibit filing another mechanics lien for additional work. That exact situation is discussed in this article: Release of Texas Mechanics Lien Does Not Prohibit Future Lien For Additional Work. As discussed in that article, Texas lien claimants are apparently entitled to secure a second lien on the project for work that's done after an initial lien is released.