Preserving and Executing Lien Rights Leads to Prompt Payment

Contractors and suppliers have a remarkable collections remedy at their fingertips:   the mechanic’s lien.    But as we’ve (and countless others @constructionlaw @timrhughes @myconstructlaw @matthewdevries) have warned a thousand times…the lien laws vary state-by-state, and they are highly complex.

Preserving those lien rights by promptly and properly filing a preliminary notice, notice to owner, or other type of required construction notice is critical.   Thereafter, timely recording your mechanics lien or public bond claim is also critical.

With all the legal complications and technicalities, some contractors and suppliers may wonder whether the mechanic lien is worth all the trouble?

Yesterday, Walter Duke at the Texas Construction Law Blog may have tendered an answer to this question.   His post, 4 Practical Steps to Help Ensure Prompt Payment, does a great job of focusing the non-payment issue onto four practical efforts.    One of those four important steps?    You guessed it…the mechanics lien.

Here is the praise Walter gives the mechanic lien in his post:

Mechanics liens are one of the easiest ways to ensure payment on a construction project, and yet they are one of the most commonly botched practices among contractors. All other tricks for getting paid on a project rely on the willingness, ability, and legal obligation of another party to pay up.  Liens, on the other hand, place your remedy in the land and its improvements (which, in theory, always have intrinsic value).

I thought this was a nice concise summary of why the mechanic lien is so powerful, and so frequently works.    Rather than regurgitating Walter’s post here, take a look at it on his blog in full to see more of his thoughts on mechanic liens, and the 3 other practical steps to help ensure prompt payment.

Are Texas Lien Deadlines Most Complex in Nation?

Generally speaking, lien laws and deadlines are complicated. The Texas lien statutes, however, may be among the most complex in the nation.

When calculating your deadline to file a lien, there are two features that distinguish the Texas framework from other states.

First, rather than requiring your lien be filed within so many days from the last day of providing labor, the Texas statutes calculate the due date by months, with confusing language like “by the 15th day of the month ___ months after lien claimant completes work.” Second, the notice requirements differ by project, use the same confusing calculation method, and in some circumstances require contractors to re-serve the notice month after month.

One law firm in the Dallas-Ft Worth area has gone so far as to publish a blog post each month with the lien deadlines for work performed during that month.

On our Lien Law Punchlists page, we’ve compiled two charts from lien deadline information published by Texas law firms.   A contractor and supplier can quickly look at this chart to determine when its lien and notice is required.    One is the Lien Deadline Chart and the other is the 2 and 3 Month Notice Chart.    You can also look at our Texas Lien Law Punchlist for a more wordy explanation of these charts.

What You Need To Do Immediately After Filing A Construction Lien

So, you filed your construction lien on time.  Whew!   Now what?

If you’re a subscriber to our blog, you know we frequently post about the technical requirements and strict deadlines that lead up to the filing of a construction lien.   We don’t, however, frequently discuss the technical requirements and strict deadlines that follow a lien’s filing.   There are a few, and as usual, these requirements vary state-by-state.

Generally speaking, however, you have to keep two things in mind immediately after filing a construction lien.

First, you may need to send notice of filed lien to the property owner and/or contractors “up the chain.”  In some states (like in Texas) a lien is actually unenforceable unless a copy of the filed lien is delivered to the property owner within 5 days of its filing.   That’s a serious penalty, and a pretty immediate deadline.   Other states have similar penalties (in Oregon, for example, you cannot collect attorneys fees from the other party in foreclosing on lien that was not delivered to the property owner after filing).

Now, here is how Express Lien helps.

Any liens ordered from us (in any state) are delivered to the property owner and all other interested parties (those named on the lien) immediately after filing.   Notice of the filing is delivered certified mail, and a record of the mailing is maintained in your online account, available for you to review or download at anytime.   You simply place your order and forget about it – we do all the rest.

Second, liens expired if they are not “foreclosed upon” or “enforced” within a certain period of time.    In some states, liens must be enforced within just 90 days (California), while other states can provide up to 2 years (Texas).   Failure to file a lawsuit enforcing / foreclosing the lien will result in the lien expiring.

How does Express Lien help with this?

Well, once you put the “Lien’s Filing Date” into our system, the system will calculate your lien’s expiration date.  If you order the lien from Express Lien, we’ll put the date in the system for you.    We don’t actually foreclose or enforce the lien for you (you’ll need an attorney for that), we do give you a heads-up when the deadline is approaching.

Charts to Make Texas Lien and Notice Deadlines Easy

Texas is unlike any other state when it comes to calculating its lien and notice periods.   Instead of a lien being due after a certain number of days or months, Texas uses somewhat cryptic language to define the lien period:  “on the 15th day of the month four/three months after the last month the claimant performs work.”

WHAT!?!?

Well, to help you out, we’ve created some easy to read charts.   You can take one look at this chart and easily figure out when your lien should be filed.    Check out the Texas Lien Deadline Chart here, or the Texas Two and Three Month Notice Deadline Chart here.   These are housed in the Support section of ExpressLien.com‘s website.

But you don’t even have to go that far – you can see the charts right here on our blog:

Texas Lien Deadline Chart

Texas Two and Three Month Notice Deadline Chart

* Original Contractors do not have notice requirements in Texas

** Two Month Notice must only be delivered by lower tier subcontractors and suppliers (i.e. those who did not contract with the original contractor)

*** If on a residential project, every deadline is one month earlier.

Remember, too, that you can keep track of project deadlines using our free Lien Pilot.

Engineers, Architects and Surveyors – Oh My!: Texas Provides Lien Opportunities

When you take a moment and look over the vast spectrum of lien resources on the web, you will find that almost everything is geared towards the contractor, with a bit of focus towards suppliers and material manufacturers. But do you ever see anything lending a hand to the design professionals of this world?

At ExpressLien.Com, the focus is on providing persons and companies with the opportunity and resources to protect their business and get paid for their work. We certainly do not discriminate against those design professionals whose hard work lends to the construction industry.

Recently, Architectural Record reported that architectural layoffs are abounding, and that the current economical conditions make for prime economic strain for those in the design profession. With news of poor economic resources and limited budgets for developers, it is important, now more than ever, for design professionals to seek guidance in preserving their claims and protecting their pay.

The Texas Collection Law Blog recently released an article discussing the rules for filing liens in Texas as a architect, engineer or a surveyor. The blog’s writer, Marc Lippincott, a principal at the collection firm of Cary & Lippincott, PLLC, out of Austin, Texas, states that:

“In 1995, the Texas Legislature added provisions to the Texas Property Code that made it much easier for engineers, architects, and surveyors to secure a lien for their work. The amendments eliminated the difficult and problematic requirement that the design professional’s contract be filed prior to the commencement of work. Now, the design professional only needs to have a written contract and properly record (file) the lien.”

Reducing headaches for design professionals makes it more simple and attractive for those parties to learn the ropes of the lien laws. ExpressLien.Com has excellent legal resources for your benefit. Check them out today.