Wednesday, June 27, 2012

Why is Texas mechanic's and materialman's lien process so complicated?

The Texas lien process seems a little complicated, and it is.  Why do Texas contractors have to comply with notice and filing requirements and deadlines to perfect a lien?  The lien claim process was designed to protect property owners as well as contractors.  The requirements for Texas General Contractors who have made their agreement directly with the Owner of property are less onerous than the requirements on Subcontractors who have their agreements with the General Contractor.  The rationale behind the varying requirements and deadlines is that the Owner should be given the opportunity to protect his property.

It is the Owner’s responsibility to pay the General Contractor.  There is no doubt that the Owner will know if the General Contractor has not been paid and may ultimately claim a lien.  Accordingly, the process for a General Contractor to claim a lien is not very complicated.

On the other hand, it is not the Owner’s responsibility to pay Subcontractors.  It is the General Contractor’s responsibility to pay Subcontractors according to their contracts.  Without notice, the Owner may not ever know that a Subcontractor has been hired, what the terms of their agreement with the General Contractor are, and whether or not Subcontractors have been paid by the General Contractor.  Accordingly, Subcontractors in Texas are required to provide certain notices to the Owner in order to perfect their lien rights, which is where it can get complicated.

By Sarah Berry, attorney 

Check our blog next week for the next post on mechanic's and materialmen's liens.

Our firm regularly hosts what we like to call "Texas Lien & Bond Claim 101" workshops with small groups of contractors.  If you are interested in attending a workshop please contact Sarah Berry for more information. or (512) 472-2300.

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