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If I filed a lien on a property, will the lien be forfeited if we resume construction with out getting paid?

TexasLien Priority

We filed a lien on a property for construction work completed that was not paid for using the LevelSet Portal, the General Contractor is asking us to resume work so that we may be paid in full once all is complete. I just am not sure if the lien that we have in place will still be valid if we decide to resume construction with the compensation for the original lien.

1 reply

Jan 20, 2020

Nothing in the Texas Property Code's mechanics lien provisions prohibits a lien claimant from continuing their work on the job even after they've filed a lien. Of course, when a payment dispute has gotten to the point where a lien claim has become necessary, usually the relationships on the job have deteriorated and proceeding might be impractical - or, the customer may even try and prohibit the lien claimant from proceeding with their work. But still, it's generally up to the claimant to decide whether they'll continue with their work or to suspend work due to the nonpayment.

Pros and cons to returning to the job after a mechanics lien has been filed

However, if a customer has requested that work continue even with the lien filing, it might make sense to return to the job. A failure to proceed, as contracted, could potentially result in a claimant breaching their contract and giving rise to counterclaims against them. Plus, the claimant can likely amend and update their payment claims to reflect new amounts owed. On the other hand, if payment isn't coming for the work already performed, it makes sense that a claimant wouldn't want to put themselves further in the hole. Sure, a lien claim might be amended to reflect amounts newly owed and unpaid - but putting good money after bad on the project and continuing to work and spend time and money is naturally daunting. Levelset discusses similar issues here: Can you Walk Off the Job? | The Right to Stop Work for Non-Payment.

If returning to the job, it makes sense to seek extra security

Notably, before returning to a job that's got serious payment issues and delays, it might be wise to ask the customer to enter into an additional agreement - like a personal guarantee or a promissory note - that works to bolster the contractual agreement for payment. That way, if payment problems persist, the claimant will have additional assurances of payment and avenues for recovery if payment isn't made.

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