We are a subcontractor, one of our General Contractors has not paid us. We sent a Notice of Intend to Lien but didn't know about the Monthly Notice. Can we still file a lien against the General Contractor for payment?
1 reply
Nov 18, 2019
If monthly notices are required, they must be sent prior to filing a Texas mechanics lien claim - otherwise, a subcontractor's lien claim will generally be considered invalid and unenforceable. Granted, keep in mind that monthly notices are sent on a recurring basis, and even if some monthly notice would have already become due during an earlier month, notice might still be on the table for work performed in a later month.
Additionally, note that retainage operates under different notice rules in Texas, too. So, even if a claimant failed to send all relevant monthly notices, they may still be able to send a Notice of Contractual Retainage and end up preserving mechanics lien rights on their retainage.
For more on Texas' monthly notice requirements, here are some great resources:
- How To Prepare & Send Texas Monthly Notices – Texas Notices Explained- Texas Preliminary Notice Guide and FAQs
Other options for payment recovery
Of course, keep in mind that there are always recovery tools outside of the mechanics lien process that could be valuable for recovering payment. Levelset discusses some of those tools here: Can’t File a Lien? Here Are Some Other Options For Recovery.
Invoice reminders and payment demand letters
Invoice reminders serve as a more-gentle payment recovery tool. So, if there's a serious dispute already in play, something as simple as an invoice reminder might not always do the trick. Still - simply reminding a customer that they've failed to make payment is often enough to get them to do the right thing and pay what's owed.
Escalating things a bit, payment demand letters might do the trick too. A demand letter operates similarly to a Notice of Intent to Lien - but with other legal threats thrown in (such as those discussed below). And, a demand letter can show the property owner, general contractor, customer - any party who receives it - that you're serious about recovering payment and willing to take whatever steps may be necessary.
Legal claims may be available
For one, payment is a key term of any contract - and failure to pay what's owed could certainly lead to a breach of contract action. And, when hired by someone other than the owner, an unjust enrichmentclaim could potentially be available against the owner since their property is improved and since payment wasn't received for some of the work that improved that property.
What's more - Texas has prompt payment laws in place that require payments be made in a timely manner. So, prompt payment laws may be helpful in demanding payment too - and interest penalties can be assessed, if that's the case.
Small claims court may streamline legal claims
Finally, note that if some sort of legal action is required to recover payment, taking the dispute to small claims court might streamline the claim process. Granted, claims in small claims court cannot exceed $10,000 - so if the dispute exceeds that amount, traditional litigation may be required.
Consulting a local construction attorney could help
Finally, consulting a local construction attorney - such as one of these Texas Construction Payment Experts - could help to clarify what options may be the best for your particular situation. They'll be able to review documentation and other relevant circumstances and advise on how best to recover payment.