The following is adapted from Quit Getting Stiffed.
There is a laundry list of things that must be included in a lien for it to be valid and enforceable against a property. Missing even one thing can be fatal to a lien’s enforceability and to you getting paid. So, let’s take a look at the requirements for an enforceable lien in Texas to learn more about what you can be doing to get paid what is rightfully yours.
Requirements for an enforceable lien in Texas
- The lien must contain the actual amount that you are owed. Include the entire amount you are owed. The lien amount should be for the value of work you performed, the materials you supplied that remain unpaid, and retainage. Technically, retainage does not become due until thirty days after final completion, but it does not make sense to file another lien just for retainage. You can always provide a partial release of the lien if you are paid everything but retainage. The amount of the lien can only be for work you have actually done or materials supplied for the project. You cannot lien for your whole contract amount if you did not perform the whole contract. Lien for all amounts you think you are owed, even if it turns out you are actually owed less. Having a lien for more than what you are owed will not invalidate the whole lien, just the portion you are not entitled to. Add in all amounts you are owed when you file the lien, because you cannot amend or edit a lien once it is filed. Each lien must stand or fall on its own, meaning for each lien, you must prove that you sent timely notice and that it was filed on time.
- The lien must include the name and last known address of the owner.
- The lien must include a general statement of the kind of work you did at the property. This does not have to be anything too specific, just a sentence or two that describes the work you did and the materials you supplied, so the general contractor and owner can figure out who you are.
- To have an enforceable lien in Texas, the lien must include a statement for the months you performed the work for which you are seeking payment. If you are owed money for work done in June and July, then the lien needs to state that the amount you are claiming is for work done in June and July and retainage.
- The lien must include the name and last known address for the general contractor. If you were not hired by the general contractor, you also need to include the name and last known address of the contractor who hired you.
- The lien must include a brief legal description of the property and the county the property is located in. Although not legally required, it’s best to include the address, but the address alone is not enough for a legal description. The appraisal district where the property is located will have a brief legal description in the information provided.
- The lien must include your name and address. Include both your physical address and your mailing address if they are different.
- The lien must include the dates you sent notices to the owner and general contractor and the method by which the notice was sent.
- The lien must be sworn to in front of a notary. The lien must have a jurat, which means that you are swearing that the information in the lien is true and correct. An acknowledgment is not enough.
- If your lien is on a homestead, it needs to include the following heading: “NOTICE: THIS IS NOT A LIEN. THIS IS ONLY AN AFFIDAVIT CLAIMING A LIEN.”
The Consequences of Having an Invalid Lien
We think it’s important to address what can happen if your lien is found to be invalid. We once represented a concrete contractor who had been a client for a while. They knew that, although we would use aggressive collections techniques on projects where they had missed their lien timelines, we would not file a lien because it would be invalid. On one project, they were untruthful with us about when their work was performed. They said the work had been done in April, when it had really been done in March. We filed the lien, and in the subsequent litigation, it was clear that the work had been done in March, not in April, which made the lien invalid. Not only did the judge remove our client’s lien, but he also issued a judgment that said our client had to pay more than $100,000 for the owner’s attorney’s fees.
The consequences of an invalid lien can be harsh, so make sure you follow the property lien timelines and that everything you put in a lien is truthful and can be verified.
Could you imagine having to pay thousands and even hundreds of thousands of dollars as a penalty to filing an invalid lien? Missing one step, one zero, the date, you name it—on your lien could potentially put you out of business. Taking all these steps help you ensure you have an enforceable lien in Texas.
Don’t throw away your hard work and your hard-earned money by giving misinformation and not filing properly. Check out our blogs that break down all lien laws in all 50 states in the US if you’d like to do it yourself! If you need help, contact a Texas construction attorney to assist you with the time-sensitive process of filing a mechanic’s and materialman’s lien. Get in touch with a Construction Law Firm to best serve you today and never worry about nonpayment again.
For more advice on a Texas contractor’s collection and lien rights, you can find Quit Getting Stiffed on Amazon.
About Karalynn Cromeens
Author of Quit Getting Screwed: Understanding and Negotiating the Subcontract, and creator of The Subcontractor Institute, has been a licensed attorney for more than seventeen years. She has spent her entire legal career in construction law, advising countless clients on how to avoid litigation. Karalynn is on a mission to educate and inform subcontractors about the importance of understanding their lien and collections rights, sparking change and leveling the playing field in the construction industry.