Mechanic’s Liens: How Contractors and Property Owners Can Protect Their Interests
Construction projects often involve tight timelines, multiple parties, and high financial stakes. When payments don’t come through or work isn’t completed as agreed, both contractors and property owners can find themselves in challenging positions.
Mechanic’s liens are legal tools designed to protect the financial interests of those involved in improving real property. However, they can also become points of contention.
At Garcia & Ramires, PLLC, we work with contractors, subcontractors, and property owners across Arlington, Fort Worth, Dallas, Tarrant, Ellis, Johnson, Rockwall, Collin, and Denton County, Texas, who need clarity and support in handling mechanics’ liens.
If you're a contractor seeking payment or a property owner dealing with an unexpected lien, our attorneys will explain how these liens work, outline the legal rights of each party, and provide guidance on the steps you can take to protect your investment or labor.
What Is a Mechanic’s Lien?
A mechanic’s lien is a legal claim placed on real property by someone who has performed labor or provided materials for a construction project. In Texas, these liens are governed by Chapter 53 of the Texas Property Code.
When correctly filed, a mechanic’s lien can prevent a property from being sold or refinanced until the lien is addressed. It converts a dispute over payment into a matter that affects the property's title, giving unpaid parties a strong incentive to resolve it.
Who Can File a Mechanic’s Lien in Texas?
In Texas, several parties may be eligible to file a mechanic’s lien. However, eligibility depends on the nature of the work performed and the party’s relationship to the property owner. The primary parties who can file often include the following.
Original contractors: Those with a direct contractual relationship with the property owner.
Subcontractors: Those hired by the general contractor, even without a direct agreement with the owner.
Material suppliers: Vendors who provided building materials used on the project.
Design professionals: Architects, engineers, and surveyors involved in planning or design.
Even laborers who aren't under a formal contract may have lien rights in certain situations. However, all parties must adhere to strict procedural rules to maintain these rights.
What You Should Include in a Valid Lien Affidavit
When you file a lien affidavit, it must be complete, accurate, and filed with the appropriate county clerk’s office where the property is located. Any errors could render the lien invalid. Any affidavit must contain the following standards:
A sworn statement of the amount owed.
The claimant’s name and address.
A description of labor or materials provided.
The name of the property owner and the original contractor.
A legal description of the property, not just the street address.
The dates when the work was performed or materials delivered.
Filing Deadlines and Notice Requirements
Texas law imposes rigid deadlines and notice rules for filing a mechanics' lien. Missing even one deadline can potentially invalidate a lien claim entirely. The key timelines and requirements laid out in the Texas Statutes that you should be aware of include the following.
For original contractors: You must file a lien affidavit by the 15th day of the fourth month following completion of work or delivery of materials.
For subcontractors and suppliers: You must send written notice to the property owner and original contractor by the 15th day of the third month, then file the lien affidavit by the 15th day of the fourth month.
For residential projects: You must send a formal notice by the 15th day of the second month following the completion of the work.
For all lien claimants: You must send a copy of the filed affidavit to the owner and original contractor within five business days after filing.
It's essential to follow these steps to ensure compliance and preserve your rights to file a lien in Texas. Any deviation from these deadlines and notice requirements could invalidate your claim.
How Contractors and Property Owners Can Protect Their Interests in Texas
To protect your interests as a contractor or property owner in Texas, you should make sure that clear, written contracts are in place before beginning any project. These contracts should outline project timelines, payment terms, and responsibilities of both parties. It is crucial to document all transactions, maintain detailed records, and communicate openly throughout the process. Taking these steps can significantly reduce risks and help avoid potential legal complications.
How Property Owners Can Respond to a Lien
Property owners receiving a lien notice have several options. Acting quickly can prevent legal complications and protect the property’s title. Some steps property owners can take include:
Review the lien details: Check for errors in the property description, amounts claimed, or timeline.
Request a lien waiver or release: If payment has been made or the issue resolved, the lien holder should submit a release or waiver.
File a lien release bond: Posting a bond allows the lien to be removed from the title while the dispute is resolved.
Challenge the lien in court: If the lien is invalid, exaggerated, or filed outside of deadlines, legal action can be taken to remove it.
Notify your title insurance company: This is especially important if you’re selling or refinancing the property.
Enforcing Mechanic’s Liens Through Foreclosure
Filing a lien doesn’t guarantee payment. If a voluntary resolution doesn’t occur, the claimant may initiate foreclosure proceedings to enforce the lien. The primary elements of the foreclosure process typically include the following.
Time to file a lawsuit: A lien holder has two years from the date the lien could’ve last been filed to sue, according to the Texas State Law Library.
Jurisdiction and procedure: The lawsuit is typically filed in a Texas civil district court.
Judicial review: A judge determines whether the lien was filed correctly and whether payment is owed.
Potential remedies: If the court sides with the lien holder, the property may be ordered sold to satisfy the debt.
While foreclosure is a serious step, it’s often the final option for enforcing lien rights when payment hasn’t been made. Consider pursuing all available options before foreclosure.
How Contractors Can Protect Themselves
Contractors can reduce the risk of non-payment and strengthen their position by taking specific proactive measures. Some tips for contractors include the following.
Use clear written contracts: Spell out payment terms, scope of work, and deadlines.
Maintain thorough records: Keep copies of invoices, receipts, time sheets, and correspondence.
Send preliminary notices: Even if not required, early notices help document your presence on the project.
Follow notice and filing deadlines: Use reminders and calendars to track important dates.
Use phased billing: Tie payments to project milestones instead of a lump sum at the end.
These practices can help reduce disputes and increase the likelihood of recovering payment through a lien if necessary.
How Property Owners Can Reduce Lien Risk
Property owners aren’t powerless when it comes to preventing mechanics’ liens. Careful planning and documentation can go a long way. Some tips for property owners include the following.
Hire reputable contractors: Work with licensed, insured professionals with solid references.
Always use written agreements: Include payment terms, change orders, and dispute resolution clauses.
Request lien waivers: Ask for a waiver with every payment, especially on large or long-term projects.
Track all transactions and communication: Keep logs of emails, checks issued, and job site activity.
Withhold retainage when allowed: In Texas, up to 10% of payment can be held until 30 days after project completion.
Common Mechanics' Liens Disputes
Disputes can arise even when everyone acts in good faith. Knowing what typically goes wrong can help you avoid similar issues. Some common conflicts surrounding mechanics' liens include:
Claims of non-payment: Contractors allege they weren’t fully compensated for their work.
Double payments: Owners pay the general contractor, but subcontractors go unpaid.
Workmanship concerns: Owners withhold payment due to dissatisfaction with the quality of work.
Timing mistakes: Liens are filed too early, too late, or without proper notice.
Invalid documentation: Affidavits or notices don’t comply with Texas Property Code requirements.
These disputes often lead to litigation if not resolved through negotiation or alternative dispute resolution, such as mediation. If you are facing a mechanics' lien or are considering filing a lien, reach out to an experienced civil litigation attorney for legal guidance and advice.
Contact an Experienced Civil Litigation Attorney
Mechanic’s liens are powerful tools in Texas construction law. For contractors and suppliers, they provide a path to recover what’s owed. For property owners, they serve as a signal to verify that everyone working on the project has been paid.
However, filing or defending against a lien requires strict compliance with deadlines, documents, and procedures. Whether you're a contractor seeking to secure your work or a property owner trying to maintain a clear title, understanding your rights and responsibilities is crucial.
At Garcia & Ramires, PLLC, we help clients in Arlington, Fort Worth, Dallas, Tarrant, Ellis, Johnson, Rockwall, Collin, and Denton County protect their financial interests with informed legal action. If you’re dealing with a mechanic’s lien or want to avoid one, contact us to discuss your situation and take action today.
