I am the GC on a residential project where the customer has decided to not pay. Must I have a signed contract to file a constitutional lien? Thanks, Terry
Hello,
No, you do not need a signed contract to file a Constitutional Lien. That route is available to you if you are the GC and have performed work or provided material.
You will, however, not be able to foreclose on their property through the lien process. To recover on this, you need to sue and your causes of action will be Breach of Contract, Quantum Meruit, Promissory Estoppel (as applicable), Prompt Payment Act violations, and Sworn Account (if your records are decent).
E. Aaron Cartwright III
214.799.0776
Info@EACLawyer.com
Oops. Almost forgot.
Once you have a judgment, you abstract that judgment and place a judgment lien on their house. Now they will not be able to sell it without paying you.
-Aaron
If the property is the owner's homestead (meaning that the owner owns the property and lives there) then your contract with the owner would have to satisfy the requirements of Texas Property Code sections 53.254, et seq., which requires specified homestead lien warnings, signing by husband and wife, and recordation in the county property records.
You really should retain a construction attorney to review and evaluate your legal position based on the contract and pertinent documents. The right to be entitled to file a mechanic's lien is set out in Texas Property Code Chapter 53, and you really need to make sure that if you file a lien, you have properly and appropriately done so.
Filing an invalid lien could subject you to liability under the Texas Fraudulent Lien Act, and you could be liable for statutory damages of $10,000, or actual damages, whichever is greater, plus attorney's fees. Facing such a claim would add insult to injury.
Good luck.
If you are a subcontractor, and do not have a contract with your customer, you would have had to comply with the funds trapping notice requirements of Chapter 53 of the Texas Property Code. If you do not know what a funds trapping notice is, you likely did not comply and would not have lien rights.
Retain a construction attorney to evaluate your legal situation and to provide advice.
Good luck.