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Change in Property Management Texas

We sold a job. An Authorized agent for The Prop Management Company signed off (Texas). Didn't get paid and started sending notices as required. 2 months later - management company says, "Oh... this property was taken over by New Company right after you did this work and they have to pay you." It's technically too late to send new notices (Homestead - residential - but no agreement with homeowner) - and new management company says they will pay us when they collect from old management company. Old company says new one will be paying. We feel like they did a Bait-n-Switch. Can we just file the lien against the original Owner Designee because THEY approved the work and signed the proposal?

1 reply

Feb 18, 2020

First, it's worth mentioning that a mechanics lien filing doesn't tie to a specific business or person - it ties to the project property which was improved. So, if lien rights are available for work done at a specific property, then the property management changing hands shouldn't really matter in terms of the viability of the lien claim. What's more, if the contract was signed and relevant notices were sent to the correct parties along the way, then a change in property management companies shouldn't affect the viability of previously-sent notice. And, if there was a transfer there during the life of the job and the claimant wasn't notified, it'd seem harsh to hold the claimant accountable for that when they had no way of knowing about the change. So, a change on that front won't necessarily spell doom for a potential claim. It's relatively common for a situation similar to the one above to take place when there's some transfer of leadership or ownership on a job. Unfortunately, sometimes, a contractor will get caught up in the transition - and it may take some action to get everyone's attention and make sure that payment is made in full.

Payment recovery tools

Sending a demand letter can let others on the job know you're serious about getting paid and willing to do what it takes to make sure that happens. A demand letter will usually put a hard deadline on when payment must be made, and it will threaten legal action if that payment isn't made. So, if threats like a breach of contract claim, a claim under the Texas prompt payment laws, an unjust enrichment claim, etc. are made to the other parties on the job, they may be more inclined to take the dispute seriously. Further, sending a threat like a Notice of Intent to Lien can raise the stakes even further. When a Notice of Intent is sent to all relevant project participants, they'll know they don't have a choice but to work to resolve the dispute, or else they'll be dealing with a lien claim. Plus, if it's also sent to the owner, themselves - that owner will be aware of the issue and can help put pressure on their property management company to make sure payment is made. Finally, if threats don't do the trick, then pursuing a Texas mechanics lien claim might force payment. Or, pursuing legal claims against the relevant parties might do the trick, too. And, if you're unsure about how to proceed, then consulting a local Texas construction attorney could help to clear things up. More on Texas lien rights here: Texas Mechanics Lien Guide and FAQs.

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