How and when to file a lien?

Posted by Georgie Barney on March 17th, 2021

What should you do if your client stops making payments on the construction project you have worked on and fails to respond to your calls and emails?  You might have heard that filing a lien on property is an option to collect the payment.

If someone decides not to pay you then filing a lien in Texas is all you have got. And it's totally worth it.

Proceed with caution

Liens are contractors’ and builder’s ultimate protection. The filing a lien is not complicated if its processed under state laws. Liens do not guarantee payments though. They are designed to secure your right of payments if valid documentation is used. Each step of the process must be carefully followed, and the final step includes filing a lawsuit to foreclose on the property, much like a bank would on a mortgage default. “If any of the steps are missed or done incorrectly, the contractor could end up with a lawsuit filed against him for filing an invalid lien and could result in liability to the contractor for more than the lien was worth in the first place.

Process of filing

There are numerous state specific lien laws that differ depending on the state. You need to make sure the lien process you are following is specific to the state where your project is located and fulfilling all the requirements. Pursuant to this warning, the basic process is as follows:

1. The contractor provides goods or services to improve a property, for which he does not receive payment.

2. The filing of lien by a contractor should be done within a specific number of days (generally specified to be 90 days) from the last day of work performed on the property.

3. The lien must be filed in the property records office of the county where the property is located. The lien must identify the owner of the property (who may be different from the person who ordered the work) and ideally include a legal description of the property from property records and common address. The lien must state the amount the contractor seeks to collect for the work and must identify the person or company who ordered the work to be done.

4. A copy of the lien is sent by certified mail to the property owner.

5. If payment is not made, to collect the debt amount within the specified time, the contractor needs to file a foreclosure suit, which could result on the property getting sold.

6. If the foreclosure suit is not filed within the timeframe, the lien expires and no longer would have the power against the property.

In Texas, the process of filing a lien doesn't require a lawyer anymore. A way to file lien online is https://www.texaseasylien.com/. Though the lien process could be time-consuming and complicated, makes it extremely simple and it can be a powerful tool if carefully used.

A small claims court case may be a more efficient and cost-effective method of collection than the lien process for some contractors. Most small-claims courts have jurisdictional limits for cases of ,000 or less, and cases are typically heard by the court within 45 to 60 days of filing. Contractors considering using a small-claims court should research the local jurisdictional and other requirements for the courts in their state and locality.

Filing a lien is not complicated if you know the process properly. To learn more visit: https://www.texaseasylien.com/