We paid our GC, our GC didn’t pay a sub, now they want to file a mechanics Lien. We don’t have a contract with the sub, and we have paid all invoices of the GC. We don’t want to pay twice for the work ($150k). What recourse do we have as a homeowner?
Hello!
Given the situation, I would rush to a lawsuit before the other guy got there. Let's play this out.
If we sue, we're suing in District Court and we are suing the GC and the sub. Our causes of action are Breach of Contract against the GC, violations of the Texas Construction Trust Fund Act against the GC, and a declaratory action against the sub. We bring in the sub as a required third party as they are a beneficiary under the Texas Construction Trust Fund Act and potentially have an interest through their potential lien rights.
The goal of this lawsuit is not necessarily to be awarded money damages, although you can ask for those, it is to establish that you paid the GC and the GC did not pay the sub so the GC is responsible and you have fulfilled your obligations.
I would do it this way because I want the GC in a chair in the courtroom to answer for this travesty before he has the opportunity to disappear. If you wait, you're at the mercy of the sub filing a lien and the sub filing a lawsuit and who knows where the GC will be by that time.
Also, I do not know if this is a residential or commercial project so I do not know if the GC would have needed to comply with Texas Property Code § 53.254 to allow for the sub to properly perfect a lien against a residential homestead anyway. Lots to look at here.
E. Aaron Cartwright III
214.789.1354
Aaron@EACLawyer.com
Since you do not specify, I have to make some assumptions. I assume that the construction is for your house, and that your house is your homestead. For the house to be your homestead, the house has to be titled in your name and you must live there. The contractor that contracted with you is called the "original contractor" under Chapter 53 of the Texas Property Code (which governs the propriety of mechanic's liens). If the property at issue is your homestead, then for a contractor to be entitled to file a valid mechanic's lien against your homestead, he would have to comply with Chapter 53 of the Texas Property Code. Among the requirements are a written contract signed by the owners of the homestead (husband and wife), certain homestead warnings, and filing of the contract with the county clerk. Those formalities do not usually happen. Without them, any attempted mechanic's lien filing would be invalid.
If the original contractor did not properly perfect a homestead mechanic's lien contract, then no contractor, subcontractor or supplier can file a valid mechanic's lien against your homestead. You should write a letter by certified mail to the lien claimant to demand that the lien be released, pointing out that the property is your homestead, and that the original contractor has not perfected a homestead mechanic's lien. If the lien claimant does not voluntarily release the lien, he could be liable for a fraudulent lien under Chapter 12 of the Texas Civil Practice & Remedies Code. Chapter 12 can award damages of $10,000 or actual damages whichever is greater, plus attorney's fees.
You can also demand that the lien be released under Section 53.160 of the Texas Property Code, which provides for a summary procedure (no trial necessary) for the removal of an invalid lien on someone's homestead.
Good luck.