Home>Levelset Community>Legal Help>Need advice on best approach

Need advice on best approach

General contractor who we worked for was terminated by owner and we’re owed money

1 reply

Jul 31, 2019

Great question. It may be the case that the payment due may be secured by filing a mechanics lien. However, in Texas, construction participants who do not contract directly with the property owner are required to provide certain notices in order to retain the right to file a mechanics lien.

Texas has some of the most complex and confusing mechanics lien and notice laws in the country. Participants other than direct contractors must send (at least one) notice for every month in which they furnish labor or materials to the project for which they remain unpaid. These notices are due 2 months after each month in which they furnish labor or materials to the project for which they remain unpaid, 3 months after each month in which they furnish labor or materials to the project for which they remain unpaid, or both, depending on the project type and the tier of the party providing the notice.

If the required notices were sent, a mechanics lien may be filed. There is a deadline by which a Texas mechanics lien must be filed, as well.

If the prerequisites or other requirements for a valid and enforceable mechanics lien are not met, there may be other ways to collect. While it would be difficult, if not impossible, to obligate parties other than the contracting GC, the GC still owes for work done, whether or not they are still employed by the property owner.

A lawsuit may be required in order to recover the money owed. A potential lawsuit for breach of contract may end up being the most direct path to recovery if the mechanics lien option is not available.

0 people found this helpful

Helpful