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Property was "sold" or more likely transferred to holding company.

Texas

We did some initial work on a property for a client. He led us to believe he owned the property, but apparently it was transferred to a holding prior to doing the work. We file a lien against the property in the name of the client rather than the holding company. How does this affect our claim and are there any additional steps we need to take.

1 reply

Oct 22, 2021

The legal analysis would start with a review of your contract, and then extend to any communications which have occurred, and to the mechanic's lien that you filed and to the notice letters that you mailed by certified mail.

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.

If you had an agreement with the owner's agent, then you may have a right to file a mechanic's lien. But you do not specify the nature and extent of "initial work." For example, construction work that improved the property could support a mechanic's lien.

The filing of a mechanic's lien relates back to the date of initial performance of construction work. So, a transfer of the property would not defeat a valid mechanic's lien filing.

Good luck.

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