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Payment protection on installment payments

Texas

We have a customer with a large project that wants to pay over time. Is there something we can file as part of the project set up to protect our collection rights on this type of project?

2 replies

Aug 25, 2022

You should consider preparing a letter to mail by certified mail, return receipt requested, to the owner to set out the facts and to demand the relief that you want. Attach your unpaid invoice(s) and photographs of your completed work. Make sure that your letter is professional and business like as it may be evidence later.

If need be, consider filing suit in small claims court (assuming that your claim is less than $20,000), using your letter as evidence.

If the property is the owner's homestead (meaning that the owner owns the property and lives there) then your contract with the owner would have to satisfy the requirements of Texas Property Code sections 53.254, et seq., which requires specified homestead lien warnings, signing by husband and wife, and recordation in the county property records. 

You really should retain a construction attorney to review and evaluate your legal position based on the contract and pertinent documents. The right to be entitled to file a mechanic's lien is set out in Texas Property Code Chapter 53, and you really need to make sure that if you file a lien, you have properly and appropriately done so.

Filing an invalid lien could subject you to liability under the Texas Fraudulent Lien Act, and you could be liable for statutory damages of $10,000, or actual damages, whichever is greater, plus attorney's fees. Facing such a claim would add insult to injury.

Good luck.

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Aug 29, 2022
Prepare and record Mechanic’s Lien Contract with a promissory note with the payment schedule
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