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what remedy does an owner have against a defaulting contractor who didnt pay his subs in texas?

TexasMechanics Lien

The owner of the property located in texas did not comply with statutory retainage requirements and the general contractor failed to pay his sub. the sub filed a lien against the property. the general contractor is paid in full. 1. is the only remedy for the owner to pay the sub directly and attempt to collect from the general contractor? 2. if the owner does pay the sub, then what can the owner collect from the defaulting general contractor? thanks, Beth

2 replies

Dec 5, 2019

As you may know, when a Texas owner has failed to withhold retainage, subcontractors are entitled to file a mechanics lien at least to the extent that retainage should have been withheld, as set out by § 53-105(a) of the Texas Property Code. Note, though, that when a lien claim is filed by someone other than the prime contractor, that prime contractor is responsible for defending the property owner in any suit brought on the claim (pursuant to § 53-153(a)). Further, subsection (b) of that section also states that an owner is entitled to recover amounts paid to a subcontractor for which the contractor was liable if the lawsuit on the lien claim results in a judgment against the owner. Still, regardless of what may be allowable or required under the Texas Property Code, note that an owner can likely pursue legal action against their contractor for any debts the owner must pay on their behalf in order to avoid a mechanics lien foreclosure. Additionally, I think this resource will be helpful: A Mechanics Lien Was Filed on My Property – What Do I Do Now?

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Dec 5, 2019

Thanks! Very helpful. Do you know what damages the owner can demand from the contractor? Legal feed, court costs? And to be clear, the owner should only be responsible to the subcontractor for the amount that should have been retained, correct, as opposed to the full amount owed?

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