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What are the dates I need to file a Mechanics Lien and or Intent.

I'm the Secretary Treasurer of a Walls and All, Inc. We are a Sub on a project that is on hold due to the Covid-19. We billed our Pay App#2 on March 18, 2020 in the amount of $66,230.56. This consisted of Material that was special ordered and we were not able to cancel order. Now we have a $35,076.97 invoice that is due May 30th. My question is when is our lien rights out on this pay app#2. (our last day on job was 3/13)(mat. delivered to our warehouse 3/10)

1 reply

May 11, 2020

Texas monthly notice deadlines depend on the last day of the month for when work was performed but not paid for. So, for work performed in March, the monthly notice deadline runs from the last day of March. How long, exactly, you'll have to send notice will depend on your role on the project and the project type, and Levelset has a chart breaking that down here: When do I Need to Send a Texas Preliminary Notice? Additionally, Levelset's Payment Rights Advisor tool will help you calculate your exact deadlines based on the information you provide (like who hired you and the type of project being worked on). You can find that tool here: Payment Rights Advisor. Finally, and very importantly - keep in mind that while monthly notices are required, monthly mechanics lien claims are not. Rather, if you've got multiple unpaid invoices, all of those invoices would have the same mechanics lien deadline. For residential projects, that deadline is the 15th day of the 3rd month after the last month when work was provided but not paid for. For commercial jobs, it's the 15th day of the 4th month. So, if you have unpaid work in March and May, those months will fall under the same overall mechanics lien deadline. And, if your work is ongoing, that clock hasn't even begun to tick. More discussion here: When is the deadline to file a Texas mechanics lien?

Mechanics lien rights and materials not incorporated into the project

First, note that those who manufacture specialty materials will have mechanics lien rights even if those materials aren't actually incorporated or even delivered as long as they sent a Notice of Specially Fabricated Materials. So, a specialty vendor may be able to file a mechanics lien if they can't get paid because you haven't been paid - and, when your customer or the owner refuses to pay you, that might be a strong way to make sure the specialty supplier gets paid. However, lien rights for a subcontractor who's ordered the materials, the sub's lien rights are usually more up in the air. Note, though, that the Texas mechanics lien statute allows for mechanics lien rights if the claimant has furnished material. And, § 53-001(4)(a) of the Texas Property Code does state that material, machinery, fixtures, or tools that are "ordered and delivered for incorporation or consumption" qualify as "materials." So, there's an argument to be made that a sub who orders specialty materials can lien those materials when they've been ordered even when the materials haven't yet been incorporated into the project if they've been ordered and delivered.

Sending a Notice of Intent to Lien first could get you paid

Monthly notices can go a long way toward forcing payment. And, mechanics lien claims are certainly a powerful way to make sure you're paid, too. But, before it comes down to a lien filing, there are some other options which can help. Specifically, threatening to file a mechanics lien - via a Notice of Intent to Lien - will get your customer's attention. Plus, by sending that document to the property owner, you can make sure they're aware of the issue so they can help resolve things. Considering the headaches lien claims cause for owners, they'll often put pressure on the GC or others to make sure the dispute goes away. What's more, TX requires GC's to defend owners when lien claims are made - so that's even more incentive for the GC to make sure everything gets squared away. Finally, threatening to file legal claims - like breach of contract or claims under the Texas prompt payment laws - can get the job done as well. More on that here: Construction Demand Letters – How To Write One That Gets You Paid.

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