Every work should have its price. As for the contractors, they present their costs to the client before signing an agreement. This document should contain items such as a payment schedule and deadlines and the client will agree to it by signing the contract.
Upon the work completion, the client will pay the contractors. Then, the contractors will settle the payment for the subcontractors, suppliers, workers who rented the equipment, and others who have worked under their supervision. All that is left is pure earnings.
That is an ideal scenario that, unfortunately, doesn’t always happen in Texas. There are situations when the client can’t (or doesn’t want) to pay for the completed project. Although the contract obliges them to do so, they sometimes ignore its validity.
The constitutional right and statute in Texas govern the way contractors can get what they earn. It involves using a legal tool called a mechanic’s lien. Visit this website to find out what this document is (although it is a process) named after.
Who Can File a Mechanics Lien?
In simple words, a mechanic’s lien is a document that protects all those engaged in some construction work from non-payers. Specific categories of contractors who have signed a direct contract with the property owner but have not received payment are eligible for a constitutional lien.
In Texas law, everyone eligible to file a lien can be grouped into three major groups. These are contractors who work to improve clients’ properties (builders, mechanics, artisans, etc.); suppliers who sell or make special-purpose materials (for that project); and design professionals (architects, surveyors, etc.).
Mechanic’s lien is a document prescribed by law, but that doesn’t mean it’s obligatory. Also, this tool is not automatically executed if the client has not paid after finishing the project. Although each state has set of rules about everything related to this legal tool, the procedure is more or less the same.
Pre-lien Notices Are a Must
There are different rights that lien gives to different types of claimants. However, all of them need to meet the Texas mechanic’s lien rules to get the right to file it at all. Their primary obligation is sending notices. Besides knowing which one to send, contractors must be aware of time frames for doing that.
Pre-lien notices serve as a reminder to a former client who hasn’t fulfilled their part of the contract, i.e., haven’t paid after the project completion. Besides, there is documentation that claimants must prepare before starting the project. That’s one method to ensure payment and the right to filing a mechanic’s lien. These papers also help the client to gain insight into the possible consequences of non-payment.
One of these documents is the Disclosure Statement. Every contractor who has signed a direct contract with the property owner must provide a DS document. Another requirement is a list of all subcontractors and suppliers, also before the start of the project.
After completing the works, the client usually has a certain period to regulate payments. That schedule and deadlines are stated in the original contract, and a property owner should meet them. If this doesn’t happen, the contractor must find a way to get their money.
Don’t Rush with Filing a Lien
Before filing a lien in Texas, contractors must meet fairly demanding requirements for sending pre-lien notices. Deadlines can be scary, not because of the short period, but because of many dates and notices to remember.
This state’s law seems to be a little more tolerant towards non-payers, given the large number of notices they receive in a short time. But the good thing is that not every claimant has to send these invoices.
For example, direct contractors are exempt from most preliminary notices. On the other hand, subcontractors, suppliers, and all others who don’t have contact with the property owner should follow all requirements in terms of sending notices. Only after doing that on time, their right to lien will be accepted.
Don’t Miss Deadlines
There is a whole set of deadlines and notices that need to be sent to a non-payer before you even start a lien procedure in Texas. The most important thing is to deliver everything on time because even one day of delay can make you lose the right to lien.
On the next source, find the list of common mistakes because of which lien could be invalid:
Make sure that you send the first notice no later than the 15th of the third month after finishing the project. Each next invoice to the same debtor should also be sent by the 15th of the month. Keep in mind that, if these dates are weekends or holidays, claimants have to send notice earlier that month.
Finally, the claimant can file a mechanic’s lien on the 15th in the fourth month after the non-payer has not paid the debts. The claimant has the legal deadline of 5 working days to send a copy of this document to the former client from the date of filing. Enclosing of a lien must happen within a year or two; whether you have done it ‘peacefully’ or you if have filed a lawsuit.
Contractors and constructors do very responsible and sometimes risky jobs. The organization and management of a construction site are complicated, not to mention the execution of it. The same goes for any reconstruction project, which is one crucial reason why these workers and companies should be respected in any way.