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We have several clients who have not paid. Some we have filed liens on, some not. How should we proceed?

TexasMechanics LienPayment DisputesRecovery Options

We have filed liens on two different property is managed by one management company. They are both multi family properties. We also have a client who has not paid anything on a completed contract and we have not filed a lien on that residential project.

1 reply

Jan 21, 2019
I'm sorry to hear about that. Nothing is more frustrating then when someone refuses to pay you for your work. First, let's look at what can be done after a lien filing, then look to preventative measures. Once a lien has been filed, many believe that the next step is to enforce the filed lien. However, there's a lot of time between the lien filing deadline and the lien enforcement deadline (both of which you can find here - Texas Lien & Notice FAQs). One of the reasons these deadlines are spaced out is to provide an opportunity for the parties involved to negotiate or resolve their dispute. So, reaching out to the property owner to talk deal could help. Of course, they might not always be willing to talk it out, so nudging them a little might help. That's what many use the Notice of Intent to Foreclose document for. It's a warning letter that states, if payment isn't made soon, the lien will be enforced by lawsuit. Considering how drastic the effects of a lien enforcement suit can be, many owners tend to be more willing to talk if they know a lien enforcement action is coming. Plus, some savvy property owners attempt to wait out their lien claimants - and a Notice of Intent to Foreclose puts a clock on making payment. You can learn more about that document here: What is a Notice of Intent to Foreclose? Of course, sometimes, a lien enforcement action may be necessary. Regarding a problem project where no lien has actually been filed, there are some things that can help to compel payment. For one, sending the required monthly notices help put an owner and/or customer on notice that payment is owed but unpaid. Plus, they preserve the right to lien. Before deciding to file a lien, though, many claimants prefer to send a Notice of Intent to Lien. This document notifies the owner that, if payment isn't made fast, a lien filing will take place - and often, sending a Notice of Intent to Lien will be enough to compel payment without the need for ever actually filing a lien claim. You can learn more about that document here: What is a Notice of Intent to Lien? Of course, lien warnings might not always do the trick - so other legal threats, such as potential claims under breach of contract, unjust enrichment, or a claim under the TX Prompt Payment Laws could also be effective. Specifically, prompt payment laws set a timeframe during which payments must be made - and if payments are late, the debt will grow at 1.5% per month in Texas, and attorney fees could even be awarded if legal action is necessary. Of course, if push comes to shove, filing a Texas mechanics lien is still a strong option to compel payment.
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