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Do we have lien rights for product to be rented or used as a tool on multiple job sites?

Texas

We have one customer that rents the equipment we sell them and another customer that will be making our equipment mobile and taking to multiple job sites. Do we have lien rights since product is not being installed? Thanks Garry

6 replies

Apr 13, 2021
There are certainly mechanic's lien rights for equipment rentals. But if you sold the equipment, that probably is not a rental. Retain a construction attorney to evaluate your legal situation and to provide advice based on your particular facts. Good luck.
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Apr 13, 2021

Hello,

The answer to this question is not black and white. A lot will depend on whether or not you can be considered a subcontractor and how the accounting is done.

For example: If your client rents the equipment from you for 30 days at a time and you do not care what job sites they take it on so long as you are paid for the rental time, you may not be considered a subcontractor for a particular project and therefore your only rights would be a lawsuit for breach of contract, et al, in the appropriate court.

If you rent the equipment for a particular jobsite, deliver the equipment, and pick it up, you may be closer to being consdered a subcontractor and would be able to exercise lien rights against the Property for which you have not been paid.

It's going to be really subjective.

E. Aaron Cartwright III
214.789.1354
Aaron@EACLawyer.com

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Apr 13, 2021

Almost forgot.

Whether you have lien rights is going to be closely related to how well you can attribute the cost of your equipment to a specific job. Here is an article on the subject:

https://www.levelset.com/blog/can-equipment-rental-companies-file-mechanics-liens/

-Aaron

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Apr 13, 2021
Thanks. To be clear we are selling the products to our customers. They are the ones renting or using as a mobile tool.
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Apr 13, 2021

Hello again,

In that case, you have no lien rights. You would have rights to breach of contract, et al, in court if you were not paid.

-Aaron

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Apr 13, 2021
If you have sold the products, I trust that you have received full payment. If not, you can consider selling the products with a vendor's lien, and file a UCC-1 financing statement with the Texas Secretary of State. Retain a construction attorney to evaluate your facts and legal situation, and to provide advice. Good luck.
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