Professionals working in construction, such as contractors, subcontractors, architects, engineers, carpenters, plumbers and others, have a right to be paid the total amount owed for their work and in a timely manner. Mechanic’s lien protects these professionals by ensuring that they receive their money.
A lien is the right to possess property that belongs to another until that person pays off what is owed. Typically, in the beginning of a construction project, a bond is issued to make sure that the contractors and suppliers get paid for their hard work.
“Mechanic lien laws are in place to allow contractors and subcontractors to get paid without having to rely on a suit for breach of contract and all that goes with it,” Attorney Brian J. Hansen said. “It is a powerful tool when done correctly.”
Our McAllen lawyers can answer your questions about mechanic’s liens and anything pertaining to construction law. Contact us for a free consultation.
Who qualifies for a lien in private work?
According to Texas Property Code Section 53.021, a person has lien if, “(1) The person labors, specially fabricates material, or furnishes labor or materials for construction or repair in the state of: (A.) a house, building, or improvement; (B) a levee or embankment to be erected for the reclamation of overflow land along a river or creek; or (C) a railroad; and (2) The person labors, specially fabricates the material, or furnishes the labor of materials under or by virtue of a contract with the owner or the owner’s agent, trustee, receiver, contractor or subcontractor.”
This section of the property code also states that a person has a lien even if they have not delivered the material and also if they are an architect, engineer or surveyor who has prepared a plan, a person who installs landscaping and a person who aides in the demolition of a structure.
Steps to Filing a Lien Claim
There are three steps that you should take in order to make your claim effective. First, you must determine whether your construction project is a private work, state public work or federal public work. Upon doing so, you will determine which laws apply to your situation. For example, private work is regulated by the Texas Property Code, public work is regulated by the McGregor Act and federal work by the Miller Act.
Second, according to the specific act or code that applies to your work, you have to send out notices, like a lien affidavit, to the right people and with plenty of time for them to review them.
Finally, once the claim has been accepted but not paid, you must file suit within the proper deadlines that apply to the laws or bonds of your claim.
“Having a lien on the property provides a security interest on it,” Hansen said. “The law is very particular in what needs to be included in the notices and when they need to be sent.”
Laws Regulating Construction Payments
Knowing which entity you are working for in construction can help you identify the laws and bond claims that will work for your unique situation.
The Miller Act
Any federal construction work payment is regulated by the Miller Act. Under this act, prime contractors have to establish a payment bond for contracts over $100,000. There are also payment protections for contracts between $30,000 and $100,000. These payment bonds are a form of security to protect those working and supplying materials for public construction projects. If the contractor fails to pay suppliers and subcontractors, they can be sued in the U.S. District Court.
Texas Government Code
A payment bond is provided for subcontractors and suppliers in public work. Under the Texas Government Code, formerly known as the “McGregor Act,” a prime contractor is required to post a payment bond for any governmental job that is more than $25,000. For any public jobs below this amount, a limited lien is provided, however, this rarely happens as most project jobs are worth more than that.
Texas Property Code
The Texas Property Code covers the original contractor and all subcontractors and suppliers of a project. The amount of lien that can be claimed by a subcontractor under this code is the total subcontract price of their labor minus the payments they have already received.
We Can Settle Your Disputes
We know that mechanic’s liens and bond claims can be quite tricky. That is why our McAllen attorneys can help.
“We are experienced in handling mechanic’s liens and can help contractors and subcontractors with filing such liens properly,” Hansen said. “We often encounter contractors and subs who have filed liens themselves but made small mistakes, which invalidate them.”
If you would like more information about how to secure your payment in a construction project, or if you have any other questions pertaining to construction law, you can call 956.686.6606 for a free consultation.