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Texas Code and Misappropriation of Funds and Fraud

I am a residential homeowner and I contracted with a general contractor to do some rennovations on my home. The contract was over $100,000. The contractor never paid for the service of the plumber and now I have a lien against my home for plumbing services $9,100. I went to a lawyer who stated that the contractor had IRS liens, Liens against his property, Liens against his business and so forth. He stated attempting to get any monies back for non work on the property was probably not going to happen. I went to the police who stated they could not help. Under this Texas Code can I go back to the police and file criminal charges against the contractor as his actions were fraud and a misappropriation of funds.

2 replies

Mar 31, 2021

I am not a criminal attorney, but I suspect you will struggle to get an answer here as this forum is realy more for civil disputes.

Instead of calling the police, I would suggest contacting the attorney general's office in the county in which you are located. What action they will take from there I cannot tell you, but some of these offices have very active consumer protection offices.

Best of luck!

Ben

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Mar 31, 2021

I assume that the renovation is for your house, and that your house is your homestead. For the house to be your homestead, the house has to be titled in your name and you must live there. The contractor that contracted with you is called the "original contractor" under Chapter 53 of the Texas Property Code (which governs the propriety of mechanic's liens). If the property at issue is your homestead, then for a contractor to be entitled to file a valid mechanic's lien against your homestead, he would have to comply with Chapter 53 of the Texas Property Code. Among the requirements are a written contract signed by the owners of the homestead (husband and wife), certain homestead warnings, and filing of the contract with the county clerk. Those formalities do not usually happen. Without them, any attempted mechanic's lien filing would be invalid. If the original contractor did not properly perfect a homestead mechanic's lien contract, then no contractor, subcontractor or supplier can file a valid mechanic's lien against your homestead. You should write a letter by certified mail to the lien claimant to demand that the lien be released, pointing out that the property is your homestead, and that the original contractor has not perfected a homestead mechanic's lien. If the lien claimant does not voluntarily release the lien, he could be liable for a fraudulent lien under Chapter 12 of the Texas Civil Practice & Remedies Code. Chapter 12 can award damages of $10,000 or actual damages whichever is greater, plus attorney's fees. You can also demand that the lien be released under Section 53.160 of the Texas Property Code, which provides for a summary procedure (no trial necessary) for the removal of an invalid lien on someone's homestead. No lien claimant can force you to sell your home without first filing a valid homestead mechanic's lien. So, the determination of whether proper lien filing occurred is important. Retain a construction attorney to evaluate your legal situation and to provide advice. Good luck.

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