If I did not file a retainage notice in TX, will filing a lien be considered fraudulent?
1 reply
Aug 8, 2018
Texas notices can be a doozie, so it's understandable when they cause confusion. The Texas retainage notice can be a helpful document, but failing to send it will not automatically bar a lien claim. Explaining the purpose of the notice should help. Under § 53-057 of the Texas property code, "A claimant may give notice under this section..." as an alternative to including retainage amounts in monthly notices under § 53.056 or § 53.252 of the Texas Property Code. Meaning, when the Texas retainage notice is sent, the amounts withheld as retainage from each invoice are protected and monthly notices need not be sent specifically for those retainage amounts (important note: other unpaid amounts would still require monthly notices, regardless of whether the retainage notice was sent). If the Texas retainage notice is not sent, then amounts that are being withheld as retainage must be protected by monthly notices just like any other unpaid amount. Finally, it's important to note that not all errors or issues with a mechanics lien will result in a lien being considered fraudulent - there's a difference between fraud and an honest mistake. Thus, while an error on a lien claim may or may not render that lien invalid, if it's honestly made, the penalties associated with fraudulent lien filings will typically not come into play. More on that topic here: Frivolous Mechanics Liens: Intentionally Fraudulent vs. Honest Mistakes.