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Claim of Lieb from the contractor

TexasLien ReleasesMechanics Lien

A home remodeler filed a “claim of Lien” against the house he is suppose to be repairing. He has failed to complete work that has been paid for and lied about materials purchased. How can we resolve it. File a lawsuit against him and his llc?

2 replies

May 25, 2021

You have two issues: (1) the contractor did not finish; and (2) wrongful mechanic's lien filing.

(1) You need to create a paper trail, so I suggest that you consider the following.

You should write the contractor a letter by certified mail to request that the contractor return to correct/complete his work. In that letter, you should advise generally what work needs to be corrected/completed. You should also indicate that if the contractor does not return to correct/complete his work, you will have to retain another contractor, and will hold the first contractor responsible for the costs. Finally, indicate in your letter that if the contractor does not advise that he will return to correct/complete his work within one week, you will presume that he has no intention of doing so, and you will hold him responsible for the costs of correcting/completing his work.

When the contractor does not return, you can retain another contractor to correct/complete the first contractor's work. Make sure that the second contractor itemizes his invoices and lists the costs to correct/complete the first contractor's work. You cannot charge the first contractor with the cost of work that was not within the first contractor's scope of work.  

Once you have tallied the costs associated with correcting/completing the first contractor's work, you can consider suing him to recover those costs. The jurisdictional maximum for small claims court in Texas is now $20,000. So, if your claim exceeds that amount, you will have to sue in County or District Court. In small claims court, you can represent yourself. In County or District Court, you will have to retain an attorney. However, under Texas law, you would be entitled to recover attorney's fees if you prevailed.

Make sure that you take a lot of photos of the first contractor's work. Digital photos with the date of the photo imprinted on the photo are best. You should document the condition in which the first contractor left the work and what it took to correct/complete the work.

(2) I assume that the renovation is for your house, and that your house is your homestead. For the house to be your homestead, the house has to be titled in your name and you must live there. The contractor that contracted with you is called the "original contractor" under Chapter 53 of the Texas Property Code (which governs the propriety of mechanic's liens). If the property at issue is your homestead, then for a contractor to be entitled to file a valid mechanic's lien against your homestead, he would have to comply with Chapter 53 of the Texas Property Code. Among the requirements are a written contract signed by the owners of the homestead (husband and wife), certain homestead warnings, and filing of the contract with the county clerk. Those formalities do not usually happen. Without them, any attempted mechanic's lien filing would be invalid.

If the original contractor did not properly perfect a homestead mechanic's lien contract, then no contractor, subcontractor or supplier can file a valid mechanic's lien against your homestead. You should write a letter by certified mail to the lien claimant to demand that the lien be released, pointing out that the property is your homestead, and that the original contractor has not perfected a homestead mechanic's lien. If the lien claimant does not voluntarily release the lien, he could be liable for a fraudulent lien under Chapter 12 of the Texas Civil Practice & Remedies Code. Chapter 12 can award damages of $10,000 or actual damages whichever is greater, plus attorney's fees.

You can also demand that the lien be released under Section 53.160 of the Texas Property Code, which provides for a summary procedure (no trial necessary) for the removal of an invalid lien on someone's homestead.

Retain a construction attorney to evaluate your legal situation and to provide advice.

Good luck.

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May 25, 2021

Hello,

You are correct. A lawsuit would be needed.

First, you should send the demand letter with the appropriate Chapter 27 and DTPA language. This will be important later for damage calculations.

When he inevitably does not respond, you file suit. The causes of action are usually Breach of Contract, Quantum Meruit/Promissory Estoppel (if and as necessary), DTPA violation, fraud, removal of invalid lien, etc. Your goal is twofold: 1) have the lien removed and/or 2) stack so much up against him that it nets out to a removal of the lien and funds to finish the repair.

Generally, this type of suit is not difficult to win if you have the proper paper trail and photo evidence. What becomes difficult is actually collecting. The contractors can sometimes be broke so you can make sure they never get a line credit again but actual collections tends to be very difficult. The judge's signature will remove the lien immediately, however, so that part is not a problem. The owner will be able to do what they need with the home.

E. Aaron Cartwright III
214.789.1354
Aaron@EACLawyer.com
  

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