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How to file a 3 month notice on retainage.

We sent an invoice in for retainage in Janurary and again in February. We know the GC is in legal with the owner already, but haven't received any updates from them. Can I file a 3 month notice in April and if no payment file the lien in May? We are unsure of the proper steps to take. Your help is much appreciated.

1 reply

Mar 29, 2019

Good question, and I'm sorry to hear about your payment trouble here. I think covering the basics of Texas lien law will go a long way to provide some clarity here. First and foremost - monthly notices. Since it sounds like you understand the timeframe for sending notice and the need for sending them on a rolling basis, let's talk about what amounts are included in the notices. Texas monthly notices are sent for amounts that are owed but unpaid. When the deadline approaches to send a notice for a given month, any amounts that were owed and unpaid in the month leading to the notice can be included. Now, for those subcontractors and suppliers who send the Texas preliminary retainage notice, including retainage amounts in monthly notices might not be necessary in order to preserve the right to lien on retained amounts. At the same time, a party sending monthly notices could still include retainage amounts in their monthly notices if they'd like in order to remind other parties on the project what's being retained (as well as that a lien claim would be filed if retainage is not ultimately paid). So, if a subcontractor or supplier wants to include retained amounts in their monthly notices, they are generally entitled to do so. Now, let's talk about Texas mechanics lien claims. In Texas, the deadline to file a mechanics lien will vary depending on the project's type. For commercial projects, the deadline to file a mechanics lien is the 15th day of the 4th month after the month when the lien claimant last furnished labor or materials to the project. For residential projects, this is moved up to the 3rd month following the month in which the lien claimant last furnished labor or materials but went unpaid. In either event - this deadline is very strict, so it's important to keep an eye on it in order to keep all tools available in case further action is needed to recover payment. Note, though, that while notices are required on a monthly basis, there's only one lien deadline - and that deadline is based on the claimant's last furnishing date. Note also that, before resorting to a lien claim, sending a lien warning/threat like a Notice of Intent to Lien can go a long way toward payment. By sending a document like a Notice of Intent to Lien, a prospective claimant can make sure both the owner and their contractor are aware that they're serious about payment, and by sending to the owner, it can help put extra pressure on the contractor to make payment. You can learn more about that idea here: What is a Notice of Intent to Lien? Further, these resources should be helpful: (1) Texas Lien & Notice Overview; (2) Texas Has Monthly Notices – Are Monthly Claims Required as Well?; and (3) How to File a Texas Mechanics Lien. Further, the zlien Payment Rights Advisor can help to clarify deadlines.

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