I work for several entities that are development companies. Additionally, we are the part owner and the GC. We are a small company that has grown rapidly within 5 years. I have received intents to lien from various vendors of our subcontractors, whom have been paid but have not paid their vendors. If i do not have a conditional lien waiver for progress payment executed what do I need to provide the vendors inorder to prevent lien? Our contracts state the subs are responsible for their materials, tools, supplies and equipment costs and that amount is to be included in their bid packages- so when we generate and execute a contract the subs and my company have a meeting of the minds that they are responsible for covering their vendor fees. Am I missing a step? Should conditional lien waivers on progress payments be executed at time of contract execution? Are their any documents I should be providing and having my subs execute in order to prevent liens?
The legal analysis would start with a review of the contract between the owner and the contractor who contracted with the owner (called the "original contractor" under Chapter 53 of the Texas Property Code - the Chapter that governs mechanic's liens), and then extend to any communications or payments which have occurred.
You do not indicate if you are the owner or the original contractor. If you are the owner, the subcontractors' vendors would have to provide notice by certified mail to you to trap funds by the 15th day of the third month after the month that the vendor's equipment or materials were provided (for commercial projects) or the 15th day of the second month (for residential projects). The owner is only liable for the original contract price. So, if you receive notices of non-payment, then you should withhold payment from the original contractor until the vendor has been properly paid. An owner is also required to withhold 10% retainage from the original contractor under 30 days after the project has been fully completed.
If you are the original contractor, insist that your subcontractors secure lien waivers from their vendors in exchange for payment.
Retain a construction attorney to evaluate your legal situation and to provide advice.