Home>Levelset Community>Legal Help>As a Subcontractor, once we have completed our Scope of Work, how soon can we file a Lien? Once the project is complete, aren't all funds due within 30 days per the Prompt Payment Act?
As a Subcontractor, once we have completed our Scope of Work, how soon can we file a Lien? Once the project is complete, aren't all funds due within 30 days per the Prompt Payment Act?
Our contract is "pay-when-paid", but when a job is complete, doesn't everything become due and owing?
1 reply
Jul 18, 2019
That's an interesting question. In Texas, a claimant need not even finish their scope of work before they file a mechanics lien, as long as there's payment for their work that's owed and unpaid and as long as proper notices were sent. Texas has strict deadlines for filing mechanics liens, but there isn't a specified "start date" from which liens can be filed. So, in practice, a claimant could file their lien shortly after they've finished their scope of work, if they like. Though, it's generally wise (and potentially required) that a claimant send the proper notices prior to filing a lien, even if the deadline for sending those notices has not yet passed.
Now, practically there are some considerations to keep in mind. Filing a lien "early" could definitely have a negative effect on relationships. Often, discussing a debt with a non-paying customer will help to move things along or at least help understand why payment hasn't come yet. And, if talking doesn't do the trick, escalating things with a document like a Notice of Intent to Lien can be a useful option. By sending a Notice of Intent to Lien, a lien claimant shows both their customer and the property owner that if payment isn't received soon, a lien claim is coming. And, because mechanics liens are such a powerful too, the mere threat of a lien claim on the horizon is often enough to get the ball rolling.
But, no matter how it's done, it's generally a good idea to make attempt at payment recovery and giving some sort of warning before proceeding with a lien claim in order to try and obtain payment without a full-on dispute. Considering the relatively long timeframe for filing a Texas lien claim, there's usually plenty of time to attempt recovery before a lien deadline comes into play.