Home>Levelset Community>Legal Help>Contractor filed a fraudulent lien

Contractor filed a fraudulent lien

TexasMechanics Lien

Contractor was fired on 15th August 2018 after multiple delays and not paying subs, files a lien on my property which was about to close by attaching fraudulent invoice. Contractor was paid in full and also removed HVAC, Microwave and kitchen vent just before getting fired and did not give it back. On 15th August 2018 the contractor demanded for another $60,000 to complete the work which we refused to pay, as we had already paid them over the contracted amount. We fired them on the spot, went to City of Houston permits department and found out that none of the city inspections we completed and house was red tagged. We paid some of the subs who were not paid by the contractor again secures their loyalty and completed all the jobs. We got the house under contract on 30th October 2018 and found out that the contractors have filed a lien with one fraudulent invoice which they made up on their letter head.

1 reply

Dec 3, 2018
I'm very sorry to hear about that - unfortunately, construction is home to some bad actors who improperly wield their mechanics lien rights. First, as you likely know, mechanics lien rights arise when construction work has been performed and unpaid - and the right to lien only exists for amounts that are unpaid for work performed. Liens filed with an improper basis can lead to serious penalties, and the state of Texas takes its property rights seriously. There are a number of ways to remove a Texas mechanics lien - which we elaborate on in the second half of this article:

How and When To Release A Texas Mechanics Lien

For one, an owner can file a summary motion in order to remove an invalid or unenforceable mechanics lien filed on their property under § 53-160 of the Texas Property Code. Further, Texas is one of the many states where an owner can bond off a mechanics lien. Of course, both options can require a fair amount of payment to get the ball for removal going, and to file a summary motion, an attorney will likely be required. But the cheapest and fastest way to force the removal of a mechanics lien is to convince the lien claimant to remove the lien themselves. Where payment of the alleged debt will not be made, owners often successfully fend off fraudulent lien claims by sending a demand letter, via an attorney, requesting the removal of the lien. When such a letter lays out information as to why the lien is improper (and potentially fraudulent), as well as the penalties associated with such a lien filing, it's possible that the lien claimant with be compelled to remove the lien on their own accord. Citing potential penalties and actions such as slander of title can also be effective. Regardless of what the next official step will be, though, it'd be wise to consult a local Texas real estate or construction attorney - they will be able to review the relevant documentation and other information and advise on the best path forward. Considering the drastic nature of mechanics liens, the risk of moving forward without the help of an attorney might not be worth it.
0 people found this helpful