Home>Levelset Community>Legal Help>Can you tell me what a "junction" on a lien bond means? Someone told me that a seller of the property I'm liening can sell the lien to someone else and not be required to pay the debt.

Can you tell me what a "junction" on a lien bond means? Someone told me that a seller of the property I'm liening can sell the lien to someone else and not be required to pay the debt.

TexasBonding Off Lien

I have two signed contracts with the invoices for work we started. We asked for another draw and the customer said she felt she didn't owe us anymore money. She did pay a 1/2 down on her credit card on the newest contract so we could finish the work and now is trying to do a chargeback through my merchant account. So they owe $10K on the original contract and is trying to chargeback $10K. I did file a lien on the $10K owed on the original contract and I am wanting to file another lien for the chargeback.

1 reply

May 10, 2019

That's an interesting question. First, let's look at what happens when a mechanics lien is bonded off. Then, we can look at the ability to increase the amount of a lien - either by adjusting the already-filed lien, or by filing a second lien on a project. I'm unfamiliar with the term "junction" as it relates to the bonding off a mechanics lien, but let's talk about bonding off a mechanics lien. When a mechanics lien is filed, that lien creates an interest in the underlying project property - and payment is secured by the owner's property. When that lien is bonded off, the bond replaces the land in securing the debt. But, for the purposes of the lien claimant, it shouldn't make that much of a difference. If payment still isn't made after the lien has been bonded off, the claimant will enforce their claim (by filing suit) against the bond rather than against the project property. But, either way, an unpaid lien claim might need to be enforced if unpaid. Once that bond is filed in place of the mechanics lien, it's on file with the court - and it can't be removed or taken away until the underlying payment dispute has been resolved. But, regardless of what happens with the ownership of that bond, the bond itself's sole use is to secure the mechanics lien which has been bonded off. For more information on bonding off a lien, this resource should be valuable: Primer on Bonded Off Mechanics Liens. As for increasing the amount of a lien, only amounts that are owed but unpaid may be liened. So, in a situation where an owner attempts to recover payment already made, unless the money is no longer in the hand of the contractor, lien rights might not arise. But, if an owner successfully charges back some amounts that were owed and paid to their contractor, that contractor could conceivably lien the amount that has become owed and unpaid. As long as the lien deadline has not yet passed, a claimant might be able to amend their already-filed lien to increase the amount of the lien. Alternatively, a lien claimant could also file a second mechanics lien on the same property for new amounts that have become owed and unpaid. Considering the Texas Property Code does not specifically set out the ability to amend a filed lien, filing a second mechanics lien might be a better option for an unpaid claimant looking to increase the amount of their lien. For more on Texas mechanics liens, this resource should be valuable: Texas Lien and Notice Overview and Statutes.

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