What is a Mechanic’s Lien?
A Mechanic's Lien is a legal filing intended for business contractors to assert a security interest in the non-paying party’s property. A lien is only asserted after notice of nonpayment has failed. However, to file a Mechanic's Lien in Texas, you must first meet all statutory requirements that should be discussed with a Dallas, Texas Mechanic's Lien attorney.
Who is Eligible to File a Mechanic’s Lien in Texas?
Any contractor or subcontractor who has not received payment for work performed can file a Mechanic's Lien to secure an interest in the property being worked on. The amount of the lien should correspond to the total amount owed that has not been paid to the contractor or subcontractor.
What is the Process for Filing a Mechanic’s Lien?
Filing a Mechanic's Lien in Texas requires the following steps:
- Issue a preliminary notice to the non-paying party after beginning a job for which payment has not been received.
- If payment has not been made after receiving a preliminary notice, the aggrieved contractor/subcontractor can issue a notice of intent to assert a Mechanic's Lien.
- If payment still has not been made, the aggrieved party can demand payment by filing a Mechanic's Lien.
Important Deadlines for Pursuing a Mechanic’s Lien Relating to Commercial Projects
If you wish to pursue a Mechanic's Lien, you must meet all statutory deadlines, and failure to do so can invalidate a Mechanic's Lien. Adhering to deadlines mandated by Texas state law is critical, and working with a Dallas Mechanic's Lien attorney can help to ensure you meet all deadlines.
Deadline No. 1 – Sending a Preliminary Notice
A preliminary notice of nonpayment should be sent well before a notice of intent to assert a Mechanic's Lien is sent. As such, preliminary notices for nonpayment should be sent shortly after payment is due, and payment is not received.
Deadline No. 2 – Sending a Notice of Intent to File a Mechanic’s Lien
Under Texas law, subcontractors and suppliers who have not received payment must send notice to the non-paying contractor by the fifteenth day of the third month following nonpayment. In other words, if you performed work in January and have not received payment, you must send a preliminary notice no later than April 15.
Deadline No. 3 – Filing the Mechanic’s Lien
If payment is not received after sending a notice of intent to file a Mechanic's Lien, you must file the Mechanic's Lien no later than the fifteenth day of the fourth month following the date work was completed. Using the same example for the deadline to file a notice of intent, if work was performed in January, the Mechanic's Lien must be filed no later than May 15.
Because the rules differ based on whether you are considered a general contractor versus a subcontractor or supplier, speaking with a Dallas, Texas, Mechanic's Lien attorney is a good first step to tackling a complex issue.