I have 2 projects which are recently beyond 60 days on their invoices. I filed a notice for both projects approx 1 week ago. Can I move straight to a Mechanics Lien without jeopardizing my lien rights?
1 reply
Jun 25, 2019
That's a good question, and I hate to hear that you've been having trouble getting paid. Let's look at the notice requirements that must be met prior to filing a Texas mechanics lien, then we'll look at how sending a Notice of Intent to Lien can lead to payment without the need for a lien filing.
As you mentioned above, monthly notice must be sent in order to preserve the right to lien in Texas. This notice must be sent at different times depending on the project's specifics. For those subs, suppliers, and equipment lessors working on residential projects, notice must be delivered no later than the 15th day of the 2nd month after each month where the lien claimant performed work but went unpaid. For non-residential projects, this moves back to the 3rd month for first tier subs. For any subs, suppliers, or equipment lessors hired by someone other than the project's general contractor, both a 2nd month notice and a 3rd month notice must be sent.
With those rules established - what notice will be required prior to sending notice will depend on the project type. Clearly, if the deadline for a monthly notice comes and goes without having sent notice, then the ability to lien for the respective month will be lost. However, things get a little less clear where a claimant contemplates filing their lien before the deadline to send another notice. Though, it makes sense that when a notice is required to preserve lien rights, that notice should be sent prior to filing a lien. But, where a claimant isn't sure whether they should send additional notice prior to filing their lien, the safest option is typically to send that notice that's in question. Worst case scenario, it's just an extra notice sent. In a best case scenario, that notice could lead to payment, or it could be the difference between properly preserving lien rights or losing the ability to make a claim.
Finally, it's worth noting that adding a step before proceeding with a lien claim can go a long way. While not a required notice in Texas, sending a document like a Notice of Intent to Lien goes a long way to compel payment. A Notice of Intent to Lien acts like a shot over the bow - it alerts other project participants that there's a serious payment issue present and that if it isn't quickly resolved, a mechanics lien will be filed on the project. Because mechanics liens are such a powerful tool, owners and contractors will both want to do what they can to avoid a lien filing on the project. So, if they know a claim is on the horizon, they'll often work to resolve the issue before a lien is ultimately filed.