Good Morning,
Since I've missed the deadline to file an intent to lien. I have a project with 3 open invoices that are 127 days late. What do you recommend I do?
1 reply
Sep 26, 2019
Good morning! I'm not able to provide you any legal advice or recommend a specific course of action. However, I can provide some information that might be helpful here.
Retainage notice
Note that even when monthly notices aren't sent, as required, sending a Notice of Contractual Retainage might still preserve the right to file a mechanics lien for any retention that's been withheld. A Notice of Contractual Retainage can be sent really any time during the life of the project, but it must be sent no later than the earlier of the following two dates: (1) 30 days after the date the claimant's contract is completed; or (2) the 30th day after the original contract (for the overall project) is completed or abandoned. So, if the deadline to send that notice hasn't yet passed, a claimant can still preserve their right to lien - then later file a mechanics lien, if necessary.
Other options outside of the mechanics lien process
Mechanics liens make payment recovery a lot easier for construction businesses, but they're hardly the only option for payment recovery. Less formal means, like sending an invoice reminder or demand letter, might be effective to get paid.
We discuss some formal, non-mechanics lien options in this article: Can’t File a Lien? Here Are Some Other Options For Recovery. Still, let's briefly discuss a two potential options.
For one, Texas has prompt payment laws which require payment be made on a timely manner. And, when payment isn't received timely, interest penalties will apply - 1.5% per month. For more on the Texas prompt payment laws, these two resources may be helpful: (1) Texas Prompt Payment Guide and FAQs; and (2) How To Make A Claim Under Prompt Payment Laws.
Further, note that a failure to make payment by the terms of the contract will typically result in a breach of that contract. So, an action under breach of contract might be available, too.
And, just like with the threat of a lien claim - threatening to take legal action, like a breach of contract claim or a prompt payment claim, could be effective to compel payment, too.