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Mechanical Lien, Claim Amount should Include retainage ?

OhioMechanics LienRetainageRight to Lien

When filling Mechanical Lien, the "Claim amount", do we need to include retainage amount as well ? Ex. We have outstanding Invoice for $9,000 and $1,000 in retainage. If we were filling a Mechanical Lien, what would the claim amount be ? $9,000 or the full invoice with retainage of $10,000 ? If this is State specific: please send me link to to find for each state. For this example, use Texas

1 reply

Aug 20, 2020
Mechanics liens can generally include retainage. Lien claims are available for amounts that are owed but unpaid for work performed. So, if you've earned your retainage but haven't yet received it, then including retainage could be appropriate. Certainly, the issue can take on a bit of a different flavor from state to state - so let's look at Texas below. Still, generally: Retainage claims can be included in mechanics lien claims because they represent amounts that are owed in exchange for work already done.

Including retainage in a TX mechanics lien claim

§ 53-023 of the Texas Property Code states that a lien secures payment for "(1) the labor done or material furnished for the construction or repair..." of the project. It does not state that retainage can't or shouldn't be included. And, while  § 53-024 limits the amount a subcontractor can lien, it states that the lien can be filed for "(1) an amount equal to the proportion of the total subcontract price that the sum of the labor performed, materials furnished, materials specially fabricated, reasonable overhead costs incurred, and proportionate profit margin bears to the total subcontract price; minus (2) the sum of previous payments received by the claimant on the subcontract." That section does not limit the ability to include retainage amounts in a lien claim. So, since retainage actually represents payment owed for work previously done, it should be lienable. If your work is ongoing and if you're set to be paid full retainage sometime later on, then it might make sense to not include retainage. And, if recovering retainage later on becomes an issue, filing a separate mechanics lien on those amounts or amending the original lien filing to include additional retainage amounts might make sense too. Still, it's easy to see why a claimant would want to avoid relying on additional future claims, especially when their customer has shown themselves to be unreliable. For further discussion on TX retainage and mechanics lien claims: (1) Texas Mechanics Lien Guide and FAQs; and (2) Texas Retainage Guide and FAQs.
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