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Subcontractors: when do you file a mechanic’s lien?

You were hired by the general contractor for a construction project in Austin. The project itself went smoothly, but weeks have gone by and you have still not received payment. The general contractor has been vague about your check, and you are concerned that it may never come. Unfortunately, you spent a substantial amount of money on supplies for the job. You need to receive payment soon in order to pay your bills and the men who work with you. What can you do to secure payment?

 

Mechanic’s lien

You have a right to be paid for your time, supplies and expertise. If you fail to receive payment, you can file a legal claim against the property you worked on known as a mechanic’s lien. A mechanic’s lien bypasses the unresponsive general contractor, and demands payment from the owner of the property. It may seem unfair that the property owner has to pay for the general contractor’s mistake, but the owner can file a suit against the general contractor to recover funds.

Filing a mechanic’s lien

Under Texas law, subcontractors must send the property owner and the general contractor preliminary notice of the lien by the 15th day of the end month after your work was completed. You must send a notice for each month that you performed work and were not paid.

After the notice, you should work out payment with the property owner. If you still fail to receive payment, you need to file the mechanic’s lien by the 15th day of the 4th month after the end of your work on the property. It is important to file your notice and lien by these dates in order to secure payment.

Can you avoid having to file a mechanic’s lien?

You can never fully control when another person will pay you. However, there are a few things that you can do to give yourself a greater probability of timely payment:

  1. Work with a general contractor you trust.Work with contractors that you know will fairly compensate you for your work. Before you accept a job with an unknown contractor, ask other subcontractors about their experience working with that contractor. Avoid contractors with questionable payment histories.
  2. Request payment by joint check. Before you accept a job, ask the general contractor if you can be paid with a joint check. If you are paid with a joint check, the property owner pays you directly with a check that lists both you and the general contractor. You are the only one who is able to cash the joint check, guaranteeing payment as long as their check is good.
  3. Receive pay directly from property owners. This may not always be a possible option for payment. Most property owners will prefer to pay their general contractor, and have them manage subcontractor payment. But if you are able to receive payment from the property owner, you will not have to worry about a general contractor withholding pay.

If you are struggling to receive payment for completed work, consider contacting an attorney who can represent your interests and help you receive the payment you earned.

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