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Home>Levelset Community>Legal Help>Subcontractor asked GC for name of Owner and received wrong information regarding owner name but correct address. Sub sent notice to the wrong owner correct address. Does that effect contractor's rights to file M&M Lien in Texas?

Subcontractor asked GC for name of Owner and received wrong information regarding owner name but correct address. Sub sent notice to the wrong owner correct address. Does that effect contractor's rights to file M&M Lien in Texas?

Texas

It's in the Question.

1 reply

Jul 16, 2018
I'm sorry to hear about that, but it's a good question. First, it's worth noting that if the person entitled to receive the notice was actually notified, the delivery method of that notice is likely immaterial under § 53-003 of the Texas Property Code.

Reputed owners in Texas

Anyway, even when the actual owner is not in receipt of required notices, a claimant might still be able to file a valid lien. Under § 53-056 of the Texas Property Code, a subcontractor's notice must be sent to "the owner or reputed owner." Now, unfortunately, the Texas Property Code does not actually define a "reputed owner", but recent (failed) attempts to amend the lien statute did. Under that proposed legislation, a reputed owner would have referred to a person who is either identified as an owner in a notice of commencement or in an original contract for approval, or a person generally considered or reputed to be the owner of the real property being improved. While that legislation was not passed and the definition is certainly not binding Texas law, it does provide some insight into who might be considered a "reputed owner" in Texas. Further, in other states and in common vernacular a "reputed owner" is typically someone who is believed to be the owner or a party who is held out as an owner. Thus, under the idea that notice was properly sent to the reputed owner of the property, as allowed by statute, a claimant can likely argue that proper notice was sent. What's more, when a contractor provided the owner's information and that information was relied upon and later found to be incorrect, it would seem unlikely that the law would punish the party who was fed incorrect information. Further, note that this issue (whether or not notice provided to an alleged reputed owner would preserve the right to lien) would likely only arise if a filed lien is challenged or must be enforced. While there may be strong arguments for the validity of such notice, predicting how a court might turn is tough to do. But mechanics liens claims rarely make it to a courtroom. Finally, regardless of whether a valid mechanics lien may ultimately be filed, sending a Notice of Intent to Lien is often effective to compel payment without the need of an actual lien filing. So, as long as it would not put a claimant in jeopardy of their lien deadline, sending a Notice of Intent to Lien and awaiting/negotiating a response might be a good idea.
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