…Should i go ahead and pay these or have the statue of limitations expired?

1 month ago

So I’m in Texas, I hired a framer to complete the dry in phase for a residential addition. He got as far as all bu the siding on the project and quit showing up. I had paid him for about 75% of the amount we had contracted for, I did I not pay the total as he did not finish the project as laid out in our contract. I got a call last week from the lumber yard that he has not paid the last 5 invoices which were for the exterior sheathing and roof deck which they did install along with the tyvek house wrap. These invoices Also included the Hardi Siding, fascia and soffit which my in house crews had to install scene he did not show back up. The lumber company has only called to notif me they will need to file liens on me the GC and the homeowner for Thess invoices. ( please note that they have not mailed me anything or the owner) Out of the 5 only 3 were delivered to the site, so the 2 small invoices which were will calls I’m disregarding , however the three that were delivered on 5/31/19, 6/12/19 and 6/29/ 19 total about 4K I recognize these as legitimate. My question is should i go ahead and pay these or have the statue of limitations expired? Ive read much on this subject but still unclear on timelines for filing and process as a whole. So please proved some input. I would also like to find a local construction attorney int he DFW area that i can call on form time to tome and assist me going forward. Happy to pay you for your time as well. Just want to do all by the book. On this job I’m well over budget since this sub walked off but want to make sure All subs and suppliers are satisfied and my owner is not affected going forward. However i cant afford to over pay either, thanks for your time.

Senior Legal Associate Levelset

Texas is a state with strict mechanics lien requirements and notice deadlines. If those requirements aren’t followed, then the ability to file a mechanics lien may be limited. But, at the same time, even where lien rights might not be available, that doesn’t necessarily mean certain amounts should or should not be paid. Ultimately, that comes down to a business decision for the parties involved.

Monthly notice requirements
In order to file a Texas mechanics lien, a supplier hired by someone other than the property owner must first send monthly notices. These notices are sent based on when payments for prior months’ work or materials remain owed but unpaid.

For residential jobs, a supplier hired by someone other than the owner or GC must send a 2nd-month notice to the property owner and the project’s GC. This notice must be sent by the 15th day of the 2nd month after the month where the work was performed but not paid for. The dates are a bit confusing due to TX’s bizarre mechanics lien laws, but Levelset provides a good breakdown and calendar here under “When do I need to send a Texas preliminary notice?“: Texas Preliminary Notice Guide and FAQs.

Invoices or statements may potentially qualify as “notice”
Note that while a monthly notice is often a more-formal document, providing another copy of the statement or billing for the previously unpaid work will be sufficient to serve as a monthly notice under § 53-056(f). Meaning, if a supplier sends a copy of a previously unpaid invoice in accordance with the monthly notice requirements, that copy of the invoice or statement could fulfill the supplier’s notice requirement.

Finally, it’s also worth noting that if monthly notices (or, invoices/statements re-sent in lieu of additional notice) are actually received by the intended parties, it might not matter as much whether they were properly sent. After all, the purpose of notice is to notify. So, even where a “notice” wasn’t mailed properly, it could be effective if received by the necessary parties.

But again – if notice wasn’t sent as required, then the right to lien wouldn’t exist.

Ensuring everyone’s squared away and that an owner won’t be affected
The best way to be sure that everyone’s squared away on the job and that the owner won’t be affected moving forward is to collect lien waivers from everyone who’s performed work or given materials on the job. If they’ve had a payment issue, that issue will likely come up when it comes time to submit a waiver since no one wants to waive rights before they’ve gotten what they’re owed. Plus, once all lien waivers are in hand, it’s easier to be sure that an owner won’t be hit with a mechanics lien out of nowhere and end up having to pay for work twice. More on waiver collection here: How To Handle Requesting & Tracking Lien Waivers.

I hope this information has been helpful, and please feel free to come back or reply here with any more questions you may have regarding Texas’ lien laws. Note, though, that I’m not able to advise you how you should proceed – I’m only able to provide you with relevant legal information so you can make the best decisions for your situation and your business.

Regarding an attorney in the DFW area – we’re currently adding a ton of experts to the Expert Center every day, so we’ll have some attorneys that you may be able to reach out to in the DFW area here on the site soon! But, in the meantime, there are other online resources that might be really helpful in searching for the right attorney – like Lawyers.com and FindLaw.com.

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Guest
Anonymous

Matt, thank for the reply and valuable info here.

So after reading some of the materials here it sounds like the materials supplier is supposed to send by mail an initial notice or intent to file a lien by the 15ht of the first month that the bill becomes past due? Or the second month? Since there are three unpaid invoices with different dates these will be multiple time lines for each as well.

The owner of the lumber yard did call me and explain the past due invoices , then i asked him to email me them,. He did just this week but i have not received anything else to date. Based on what i read this email would be considered a notice since he provided the unpaid invoices.

In your opinion would this mean the first two invoices dated 5/31 and 6/12 that are over 3 months be past due be past the time to file a Lien ?since the owner and myself have not received anything in writing until this week… Thanks again and I appreciate the input.

Senior Legal Associate Levelset

The notice acts a bit similarly to a Notice of Intent to Lien, but it’s a little bit different. Typically, it’s called a monthly notice or a fund trapping notice rather than a notice of intent to file a lien. Though, an “initial notice” is probably a good term for the notice. Anyway – that notice must be sent by the 15th day of the second-month after the month where work went unpaid.

If the notices (or, here, invoices) were sent in accordance with the required timelines – they may  be sufficient to fulfill the monthly notice requirements. As I briefly mentioned above, under section 53-003 of the Texas Property Code, “If a written notice is received by the person entitled to receive it, the method by which the notice was delivered is immaterial.” But, notice must still be sent by the required deadline.

While I’m not able to advise on whether a certain claimant will or will not have lien rights, I can reiterate some deadline information we’ve got elsewhere on the site (we’ve provided a convenient TX monthly notice calendar here under “When do I need to send a Texas preliminary notice?”). In that calendar, we note that for work done in May of 2019, a second-month notice must’ve generally been sent by July 15, 2019. And, for work done in June of 2019, a second-month notice must’ve generally been sent by August 15.

And, as we discussed briefly above, suppliers on TX residential projects must send second-month notices to both the owner and the GC. And, if notice wasn’t properly sent and wasn’t actually received by all required parties within the required timeframes, lien rights won’t be preserved.

Happy to help! I know problem projects can cause quite a headache.

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