Home>Levelset Community>Legal Help>What recourse do I have as a CA Contractor to collect on work done for a Texas Subcontractor when invoices are over 90 days late and it is believed that the Texas Contractor has already received payments on the job?

What recourse do I have as a CA Contractor to collect on work done for a Texas Subcontractor when invoices are over 90 days late and it is believed that the Texas Contractor has already received payments on the job?

I am a California Contractor and I sent my guys to do work under a Texas Contractor at given rates. We payed my guys. We billed the Texas Contractor the negotiated rates. He is a Subcontractor of a Subcontractor and we are a Subcontractor under the Texas Contractor. We have invoiced him and have not gotten paid for over 90 Days. We did not file liens or Notice, but have been in constant contact, sending invoices and trying to negotiate a settlement. I am aware of the Texas Prompt Payment Laws and that we should have been paid already. The total amount is about $38,000 and that covers five key sites and help with another 10 sites. It is our belief that the Texas Contractor has been paid for our sites (Chase Banks), but has not been paid for some of his sites and he is using the site payments we worked on to float the payment on his other sites. What recourse do I have to get paid on these sites?

1 reply

Dec 12, 2017

Unfortunately, Texas is very strict regarding notice requirements. If these projects were residential, in order to preserve lien rights, notice would have been required by the 15th day of the 2nd month following each month work was performed. However, for projects that are not residential, there may still be time - notice must be sent to owner and prime for each month unpaid amounts are claimed by the 15th day of the 3rd month following each month work was performed for which the claimant is still unpaid. In any event, it's great news that there has been constant contact- if there has been some admission by the other side that payment is owed, such documentation will come extremely handy should the dispute progress towards litigation. Before it goes that far, though, it may be a good idea to consider mediation or arbitration to handle the dispute. Costs are typically far below what may be spent in litigation and a result may be reached more quickly. Further, if the Texas Prompt Payment laws do apply as you'd mentioned, that will only serve as extra munition when resolving the dispute. I'll post the URL to an article of ours describing how to enforce prompt payment rights at the end of this answer. Because interest penalties apply to late payments and because attorney fees may be awarded, the other party will have that much more reason to come to the table with a good offer and come to a speedy resolution. Of course, consulting a Texas construction attorney may be in order to determine how to move forward if lien rights will not be available. Here's that article I'd mentioned above: https://blog.zlien.com/construction-payment/how-to-make-a-claim-under-prompt-payment-laws/

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