Send Lien to Mortgagee?

2 months ago

We have filed 2 liens totaling $240,000 for work done on 2 large hotels in Texas. We have send Lien docs to the owners and know they have mortgages with a local bank. Should we also send the lien to the bank to gain more attention and urgency?

Senior Legal Associate Levelset

That’s a great question. As you mentioned above – a mortgagee doesn’t have to receive notice of a lien filing in Texas. Rather, only the property owner and the prime contractor (if applicable) must receive a copy of the lien claim. However, when the mortgagee is known, it generally couldn’t hurt to provide notice to them, as well. Since they have a vested interest in the property, a mortgagee receiving notice of a lien filed on one of their investments could certainly put additional pressure on the property owner to resolve the payment dispute.

Ultimately, though, that comes down to a business decision of the lien claimant. Going above an owner to their mortgage company could certainly put a strain on relationships, but if the bridge has already been burned, there may be little left to salvage. Plus, if it’s become clear that the dispute won’t be resolved amicably, it might not be time to pull punches.

As a final note, if additional attention needs to be brought on a lien claim, keep in mind that sending a warning like a Notice of Intent to Foreclose can go a long way. By sending such a notice, a claimant can inform the property owner that they’re serious about recovery and that they aren’t afraid to pursue the claim in court. Nobody likes a lawsuit, so that can help to bring an owner to the table to talk payment.

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