Home>Levelset Community>Legal Help>Lien in Texas

Lien in Texas

Hi there, We are a supplier of construction products. I sent a separate question re: a lien in Florida. We have almost identical situations happening in these states. We were to supply a residential project in Texas, the subcontractor sent us a PO, confirmed our order, we made the material, sent one truckload of material (and were paid for that) and then were told not to send any more. We have charged them for our standard restocking fee (25%) as they haven't taken the product that they contracted and agreed to take. They have not paid the fee. We have issued a legal letter and are going to issue a statement of claim but also want to look at lien options. We issued the restocking invoice on Oct 25. I am concerned we're past the timeline to be able to file a lien, hoping that there are other options here for us.

1 reply

Dec 4, 2018

Hi, and welcome back! Another great question. Also - I'd like to start off with this piece of content zlien put together last year regarding these situations. While it shouldn't be held as gospel, this download takes a look into how each state handles specially fabricated materials that are ordered but not necessarily delivered or incorporated into a project: Free Resource - Do Suppliers of Specially Fabricated Materials Have Mechanics Lien Rights? Anyway, looking to Texas, under the Texas Property Code Section 53.021(b) and § 53-023(2), a person who specially fabricates materials that are unsuitable for use on other projects are entitled to lien, even if the materials are never delivered to the site (i.e. the contract is canceled). In order to be considered "specially fabricated materials", under § 53-001(12), the materials must be "reasonably unsuitable for use elsewhere" - so if the materials can be easily used in some other job, the right to lien might not arise when materials aren't delivered and/or incorporated. To preserve this right, however, suppliers must send a Notice of Specially Fabricated Materials after executing their material contract - as laid out by § 53-058 of the Texas Property Code. Of course, in order to preserve the right to lien in Texas, it's imperative that parties hired by someone other than the owner (such as a subcontractor) send monthly notices. Without sending these notices, the right to file a lien will not be preserved. You can learn more about them here: What is a Monthly Fund Trapping Notice? Regarding the deadline to file a Texas lien, that can get a little complicated. For residential projects, the deadline to file a mechanics lien will be the 15th day of the 3rd month following the month in which the lien claimant last furnished labor and/or materials to the project. For all other projects, the deadline will be the 15th day of the 4th month after the month in which the lien claimant last furnished labor or material to the project. Those dates can get a little confusing due to the Texas statutory language, but zlien has published some helpful resources on the subject: 2018 Texas Lien Deadline Calendar and the zlien Payment Rights Advisor. Lastly, it's worth noting that because mechanics liens are such an effective tool, the mere threat of lien is often enough to compel payment. Sending a document like a Notice of Intent to Lien can go a long way - it states that if payment isn't made and made soon, a mechanics lien will be filed on the project. Plus, it's cheaper and less risky than a mechanics lien - so if a Notice of Intent to Lien is ineffective to compel payment, a claimant can always pursue some other remedy.

0 people found this helpful

Helpful