Home>Levelset Community>Legal Help>We are a Subcontractor that often completes extra work beyond our contracted SOW via Work Tickets that are signed onsite by the GCs Superintendent. We would like to submit a form with each monthly pay application that notifies the GC that we do not waive our rights to the Signed Work Tickets that have not been incorporated into a Subcontract Change Order. Is there a specific form or verbiage to use, along with our list of work complete, to retain our rights? We do all our work in the state of Texas.

We are a Subcontractor that often completes extra work beyond our contracted SOW via Work Tickets that are signed onsite by the GCs Superintendent. We would like to submit a form with each monthly pay application that notifies the GC that we do not waive our rights to the Signed Work Tickets that have not been incorporated into a Subcontract Change Order. Is there a specific form or verbiage to use, along with our list of work complete, to retain our rights? We do all our work in the state of Texas.

This is an ongoing issue with almost all of our projects. When we attempt to include "pending change orders" on our SOVs when billing, GCs tend to reject these pay applications stating they cannot submit a billing with these amounts until they have received their Owner Change Order in order to issue our Subcontract Change Order. However, we run into situations where this goes on for months.

1 reply

Nov 26, 2018

That's an interesting situation. First, when submitting payment paperwork, it's definitely a good idea to note that extra work was performed and unpaid - even where payment might not be made for that work immediately. If an issue does arise later in a job, showing that said amounts were billed (or at the very least known) would be helpful. Anyway, when payment won't be made for outstanding change orders until a later date, it's important that unpaid amounts are protected with mechanics lien rights - preserving lien rights (and leveraging them, if necessary) is the most effective way to make sure all payments are made on a job. In Texas, in order to preserve lien rights, certain monthly notices must be sent for work performed and unpaid. By sending monthly notices as required, a subcontractor can be sure that they're securing the right to future payment by preserving their right to fight for that payment with a lien claim. Nobody wants to deal with a lien claim, and owners and contractors might not want to deal with monthly notices either - but sending monthly notices can go a long way toward making sure authorized extra work is ultimately paid. These notices more or less state that certain work has been performed but not yet paid - and they state that if they remain unpaid, the subcontractor will be able to assert their right to payment by filing a lien (should one become necessary). Texas monthly notices are not always well received, but discussing the matter with the contractor and informing them that the notice is merely being sent to preserve later rights - and not being sent because the sub currently intends to file a lien claim - could help soften the reception to monthly notices. Some zlien users have found that including a cover letter explaining why the notice was sent can also be effective to calm a contractor's nerves. There was recently a discussion on that topic on the zlien Community page, and you can find that discussion here. You can learn more about Texas monthly notices at the following locations: What is a Monthly Fund Trapping Notice? and Texas Lien and Notice FAQ.

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