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Specially Fabricated Material

We are a concrete Ready Mix company that delivers ready mix concrete(sand, rock, portland mixed with water in our mixer trucks for delivery within 1 hour). Are we considered a specially fabricated material contractor? If yes, when does the Notice of Specially Fabricated Material need to be sent since the material is fabricated within 1 hour of delivery. Can it be sent after deliver? If we are considered Material supplier what notices are needed to be sent and what time frames? When is a preliminary notice sent to a customer? How long from the date of delivery do you have to file a mechanics lien? If all notices have been sent. Also, can you file a lien without sending proper notices? Once a lien is filed what happens after that. How long is a mechanics lien good for? What if customer never pays? If customer pays, is the lien removed and how?

2 replies

Aug 22, 2019

The Texas Property Code defines specially fabricated materials as "material fabricated for use as a component of the construction or repair so as to be reasonably unsuitable for use elsewhere." Generally, the designation of materials that are "specially fabricated" are pieces of equipment or materials which were specifically designed to be used on a certain project type but would not be able to be used on some other site due to the unique nature of their design. Standard concrete would not seem to fall into that category. However, based on the definition in the Texas property code, there may be an argument that concrete could be considered "specially fabricated" since, after an hour, the concrete wouldn't be usable elsewhere. Before getting too far along - note that these are common questions we receive, and most of them are covered at either of the following pages: (1) Texas Notice FAQs; and (2) Texas Mechanics Lien Guide and FAQs Notice of Specially Fabricated Materials A Notice of Specially Fabricated Materials, when appropriate, will have the same deadline - regardless of how quickly the turnaround is for the work performed. That deadline is no later than the 15th day of the 2nd month after the month when the order for specialty materials is received. When talking about the Notice of Specially Fabricated materials, though, it's important to consider its purpose. Any construction materials - specially fabricated or not - will be lienable if they're actually incorporated into the project at hand. The purpose of the Notice of Specially Fabricated Materials is to provide mechanics lien protection for instances where materials begin to be fabricated, but aren't actually incorporated into the project. In those situations, without the protection of the notice, a specialty material fabricator would be without protection since the materials don't make their way into the project. But, where the materials are actually incorporated (and incorporated quickly), a Notice of Specially Fabricated Materials might not be all that necessary or useful. Other notices Texas does require other notices be sent in order to preserve the right to lien, though. Namely, monthly notices are required, and if retainage is being utilized, a Notice of Contractual Retainage will likely be necessary (or at least useful). As for monthly notices - a monthly notice will be required if a claimant performs work but goes unpaid for the work. Monthly notices are due on the 15th day of 2nd month and/or 3rd month after the month when work is done but not paid for, depending on who hires you and the project type (there's a helpful chart at the "Texas Notice FAQs" above, under "When do I Need to Send a Texas Preliminary Notice?"). Notice of Contractual Retainage must be sent at the earliest of the following dates: (1) 30 days after the agreement which contemplates retainage is completed, terminated, or abandoned; or (2) the 30th day after the prime contract is terminated or abandoned. Deadline to file a Texas mechanics lien There's actually a question devoted to this under the Texas Mechanics Lien Guide and FAQs, linked above. In Texas, the deadline to file a mechanics lien will be the 15th day of the 4th month after the month when the lien claimant last furnished labor or materials (and this is shortened to the 3rd month for residential pojects). That deadline sounds confusing sometimes, and you can help determine deadlines for specific jobs using this tool: Payment Rights Advisor. What happens after a lien is filed? Usually, payment comes quickly once a mechanics lien is filed! Sometimes, though, it may take a little more to get paid. Levelset discusses that idea in this article: The 4 Steps to Take After Filing a Mechanics Lien But, to recap that aricle... A good first step is to send a copy of the lien to everyone involved. In Texas, the owner must be sent a copy of the lien within 5 business days of it being filed with the court (though, it can be sent earlier). But, sending the lien to other project participants as well - like your customer - may help speed things along. Another good step might be a Notice of Intent to Foreclose. That document acts as a warning that, if you remain unpaid, you're not afraid to enforce your lien claim. Finally, if necessary, enforcing the filed lien claim might be a necessary move. That entails actually filing a lawsuit, but lien claims rarely make it to this point. How long is a lien good for? The deadline to enforce a lien claim will depend on the project type. For non-residential property, the deadline will be the later of either (1) 2 years from the last date on which the claimant could have filed their lien; or (2) 1 year after the termination, completion, or abandonment of the job. For residential property, the deadline to lien is the later of: (1) year from the last date on which the claimant could have filed their lien; or (2) 1 year from the termination, completion, or abandonment of the job. How does the lien get released? Once the lien claim is satisfied, the lien claimant must release their lien no later than the 10th date after the date when they receive a written request to release the lien. If the lien is never satisfied and the lien claimant doesn't enforce their lien in time, the lien will simply linger in the property record. Though, it might be a good idea to release an expired lien - even if it hasn't been paid. More on that here: Do you Have to Cancel a Mechanics Lien, or Will It Expire? I hope this was helpful! I strongly recommend exploring the FAQ pages linked near the top of this answer. Those pages discuss many crucial aspects of the Texas notice and lien requirements.

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Mar 5, 2020

I wanted to follow-up and confirm your company is successfully managing your prelim and lien notices via Levelset.

If I can further assist your company with any unpaid invoices, please feel free to call or email. My firm can collect for you even when lien rights have expired or were never pursued.
Mike Ross Miller, Ross & Goldman mross@mrgpartners.com (512)275-6412 Direct https://www.mrgpartners.com/levelset
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