I piut a 23,500.00 roof on a house thats in foreclosure. It's also on the mrkt and due to close wed, thur this week. I have sent in an invoice to the title co. They have acknowledged it. Is my payment at closing optional w/o a lien?
1 reply
Apr 30, 2019
That's an interesting question. First, an invoice - without more - is not as powerful as a lien claim in making sure that payment gets received. There are ways to make the debt more binding without actually filing a mechanics lien (and those options are explored in this article). But, without some other document or agreement further binding payment, an invoice is just an invoice, and a mechanics lien is a much more powerful tool to compel payment. Regarding whether payment is optional, if an agreement to make payment upon closing has been made, then regardless of whether there's a lien in place, payment isn't "optional". Payment will still be owed at the time of closing, and the agreement to make payment upon close will still be enforceable by legal action. Further, a mechanics lien filing prior to close won't necessarily make payment at close "mandatory" either. Granted, most title companies and mortgage companies wouldn't let a closing occur until a lien claim is resolved. But, it's possible for the close to befome final without payment actually being made to a lien claimant - and if that occurred, then something like a notice of intent to lien or a lien enforcement action might become necessary. But keep in mind, if there's been no indication that there will be a payment problem, and if all parties (i.e. the buyer, the seller, all title companies involved, mortgage companies, etc.) are aware of the outstanding debt and potential for a lien claim if unpaid, then filing a mechanics lien might be premature. Property closings are very sensitive to things like mechanics liens, and a lien claim could blow up a transaction - for better or for worse. So, when deciding whether a lien claim is necessary for recovery, it's important for a construction business to consider all potential options and to communicate often, if possible, with the party who must make payment. For more on Texas lien claims, this resource should be valuable: Texas Mechanics Lien Overview.