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Mechanics Lien was not used to keep homeowner from closing

TexasLien ForeclosureMechanics LienRecovery Options

We filed a mechanic's lien with Levelset because a builder did not finish paying us for cabinets we built and delivered. The owner said they closed on their house and that he was not paying us. We thought they could not close without taking care of lien.

1 reply

Jun 10, 2020
Filing a mechanics lien doesn't procedurally block the sale of a house. If a buyer, their lender, and their title company are ok with the lien being there, they aren't blocked from proceeding. However, in the vast majority of situations, prospective owners, their mortgage company, and their title company will refuse to move forward with a purchase if there's an active lien on the property. After all, that could result in the loss of the property (via foreclosure).

How to recover payment on a lien after the property is sold

If you've filed a lien and the property was then sold - your lien will still be just as effective as it was before the sale. And, notifying the new purchaser that you had filed a lien on the land before they closed should be a really effective way of bringing your payment issue to the front of everyone's mind. Further, showing understanding and asking the purchaser to resolve the matter with the seller or to have the seller resolve the matter could be effective. By doing so, that will put pressure on the party who actually failed to make payment. And, it will let them know that the debt is still very much their problem, even if they've sold the property. If negotiations and payment discussions aren't enough to resolve the matter, escalating things with a Notice of Intent to Foreclose could. A Notice of Intent to Foreclose lets recipients know you're serious about your lien and are willing to file a lawsuit, if necessary. So, sending the document to the seller and the purchaser should bring heightened pressure to deal with the matter at hand, and that could lead to payment from either party. Nobody wants to pursue a lien enforcement action, but sometimes that becomes necessary. Consulting with a Texas construction attorney will be useful for determining how to proceed with a suit, if need be. In addition to a lien enforcement action against the property, claims against the non-paying customer - like a breach of contract claim or claim under the Texas prompt payment laws - should be on the table, too. Certainly, threatening to bring those claims could lead to payment, too.
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