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For Texas contractors, ensuring you get paid for your work is just as critical as completing a high-quality project. However, navigating the complexities of Texas mechanic’s lien law can feel overwhelming, especially with recent legal changes. That’s why RCAT invited J.P. Vogel, a construction law expert and partner at Gray Reed, to break down key updates to Texas Mechanic’s Lien laws in an informative session. His presentation covered everything from how to file a mechanic’s lien in Texas to understanding the Texas Construction Trust Fund Act and securing payment bonds. This blog highlights key takeaways from J.P.’s presentation, but for a full breakdown of the legal strategies and best practices, watch the complete video here: https://www.youtube.com/watch?v=T05-Dl_NA8M Why Understanding Texas Lien Laws Matters Getting paid on time is one of the biggest challenges in the construction industry. While mechanic’s liens exist to protect contractors and subcontractors from non-payment, many hesitate to use them due to fear of damaging business relationships or making mistakes in the filing process. However, failing to properly file a lien or secure a payment bond can result in significant financial loss. J.P. emphasized that the more contractors understand their lien rights, the more confidently they can protect their business from bad debt. Common Reasons Contractors Hesitate to File Liens Despite the protection liens offer, many contractors choose not to file them. Here’s why—and why those concerns shouldn’t stop you: Fear of Damaging Relationships: Many worry that filing a lien will harm relationships with clients or general contractors. However, reputable industry professionals understand that liens are part of doing business. Enforcing your right to payment shouldn’t be seen as aggressive—it’s just good business. Uncertainty About Deadlines: Texas law requires strict adherence to lien filing timelines, and missing a deadline can invalidate a claim. However, with the updated laws simplifying the process, contractors now have clearer guidelines to follow. Perceived Complexity: Some contractors assume lien laws are too complicated to navigate. While legal guidance can help, the process is more straightforward than many think—especially with the new statutory templates that make filing easier. Concerns Over Cost: While filing a lien does involve some administrative costs, the financial loss from unpaid invoices is far greater. Investing in proper lien procedures ensures you don’t walk away empty-handed after completing work. Being proactive with lien filings can prevent cash flow issues and protect your business from nonpayment. The Basics of Mechanic’s Liens in Texas A mechanic’s lien is a legal tool that allows contractors, subcontractors, and suppliers to secure payment for work performed on a property. If a contractor isn’t paid, they can file a lien against the property, which can delay sales or refinancing until the debt is settled. Common reasons contractors hesitate to file liens: Concern about damaging relationships with GCs or property owners Confusion over deadlines and the correct filing process Fear of legal costs or incorrect documentation J.P. reassured attendees that liens are a standard part of doing business in Texas construction and should be treated as a routine payment collection tool rather than a last resort. The 2022 Changes to Texas Mechanic’s Lien Laws As of January 1, 2022, several key changes to Texas lien law took effect, simplifying the process for contractors: Pre-lien notice requirements were streamlined – fewer deadlines to track A new “rolling lien” structure was introduced, allowing contractors to cover multiple months of unpaid work in a single filing Email is now an acceptable method for sending lien notices (previously, notices had to be sent via certified mail) These updates reduce the administrative burden for contractors and make it easier to file and enforce a lien claim when necessary. How to Properly File a Mechanic’s Lien in Texas J.P. outlined the three-step lien filing process under Texas law: Pre-lien notice – Sent to the property owner and general contractor by the 15th day of the third month after work is completed. Lien affidavit – Filed with the county clerk’s office by the 15th day of the fourth month after the last day of work. Post-lien notice – Sent to the owner within five days of filing the lien. By following this timeline, contractors retain their legal right to payment while avoiding costly mistakes. Bonds and How They Affect Contractors For contractors working on public projects or large-scale commercial jobs, payment bonds often replace the need for a mechanic’s lien. Key takeaways from J.P.’s discussion on bonds: Payment bonds guarantee that subcontractors and suppliers get paid, even if the general contractor defaults. Owners and GCs can file a bond to remove a lien from a project, meaning contractors must redirect their claims to the bonding company instead. The Miller Act (for federal projects) and McGregor Act (for Texas public projects) provide additional protections for contractors seeking payment. Understanding how bonds and liens interact is crucial for ensuring full payment on every job. The Texas Construction Trust Fund Act J.P. also emphasized the importance of the Texas Construction Trust Fund Act, which holds owners, GCs, and financial officers personally liable for mismanaging construction funds. Key points: Funds received for a construction project are legally considered “trust funds” for paying subcontractors and suppliers. Misusing these funds (such as diverting them to other projects or personal expenses) can result in criminal penalties. Contractors can use the Trust Fund Act to enforce payment from GCs or owners who withhold funds improperly. For Texas contractors, understanding this law is critical—both to protect your own payments and to avoid personal liability for financial mismanagement. Practical Steps to Protect Your Payments Contractors can take proactive steps to ensure they get paid on time and in full. Here’s a checklist to follow: Send Notices Early – Don’t wait until payment issues arise. Follow Texas’s required timeline and send pre-lien notices as soon as you’re legally allowed. Document Everything – Keep thorough records of contracts, change orders, invoices, proof of work performed, and all communications related to payment. Understand the Law – Learn the deadlines and requirements for liens, retainage, and prompt payment laws to avoid costly mistakes. Use Clear Payment Terms – Ensure contracts outline exact payment timelines and what happens in the event of nonpayment. Consider Legal Help – A construction attorney can guide you through complex cases, but many liens can be filed independently using the new simplified process. Be Proactive with Follow-Ups – Regularly check in on outstanding invoices and use lien notices as leverage when necessary. By taking these precautions, contractors can minimize disputes and maximize financial stability. Key Takeaways from J.P. Vogel’s Presentation J.P. provided actionable strategies to help contractors secure payments, file liens correctly, and protect their businesses. Some of the biggest lessons include: Be proactive with lien rights – Don’t wait too long to act on unpaid invoices. Always follow up on payments quickly – The sooner you send notices, the stronger your case. Use lien laws and the Trust Fund Act strategically – These legal tools exist to protect contractors from financial loss. Final Thoughts & Resources Texas lien laws are complex, but contractors who stay informed can protect their businesses and improve cash flow. For a deeper dive into these topics, watch J.P. Vogel’s full presentation to gain additional legal strategies and best practices. Watch here: https://www.youtube.com/watch?v=T05-Dl_NA8M RCAT is committed to providing valuable resources to help roofing professionals navigate industry challenges. To learn more, visit RCAT’s membership page today: https://www.rcat.net/membership.html
For Texas contractors, ensuring you get paid for your work is just as critical as completing a high-quality project.
However, navigating the complexities of Texas mechanic’s lien law can feel overwhelming, especially with recent legal changes.
That’s why RCAT invited J.P. Vogel, a construction law expert and partner at Gray Reed, to break down key updates to Texas Mechanic’s Lien laws in an informative session.
His presentation covered everything from how to file a mechanic’s lien in Texas to understanding the Texas Construction Trust Fund Act and securing payment bonds.
This blog highlights key takeaways from J.P.’s presentation, but for a full breakdown of the legal strategies and best practices, watch the complete video here: https://www.youtube.com/watch?v=T05-Dl_NA8M
Getting paid on time is one of the biggest challenges in the construction industry.
While mechanic’s liens exist to protect contractors and subcontractors from non-payment, many hesitate to use them due to fear of damaging business relationships or making mistakes in the filing process.
However, failing to properly file a lien or secure a payment bond can result in significant financial loss. J.P. emphasized that the more contractors understand their lien rights, the more confidently they can protect their business from bad debt.
Despite the protection liens offer, many contractors choose not to file them.
Here’s why—and why those concerns shouldn’t stop you:
Being proactive with lien filings can prevent cash flow issues and protect your business from nonpayment.
A mechanic’s lien is a legal tool that allows contractors, subcontractors, and suppliers to secure payment for work performed on a property.
If a contractor isn’t paid, they can file a lien against the property, which can delay sales or refinancing until the debt is settled.
Common reasons contractors hesitate to file liens:
J.P. reassured attendees that liens are a standard part of doing business in Texas construction and should be treated as a routine payment collection tool rather than a last resort.
As of January 1, 2022, several key changes to Texas lien law took effect, simplifying the process for contractors:
These updates reduce the administrative burden for contractors and make it easier to file and enforce a lien claim when necessary.
J.P. outlined the three-step lien filing process under Texas law:
By following this timeline, contractors retain their legal right to payment while avoiding costly mistakes.
For contractors working on public projects or large-scale commercial jobs, payment bonds often replace the need for a mechanic’s lien.
Key takeaways from J.P.’s discussion on bonds:
Understanding how bonds and liens interact is crucial for ensuring full payment on every job.
J.P. also emphasized the importance of the Texas Construction Trust Fund Act, which holds owners, GCs, and financial officers personally liable for mismanaging construction funds.
Key points:
For Texas contractors, understanding this law is critical—both to protect your own payments and to avoid personal liability for financial mismanagement.
Contractors can take proactive steps to ensure they get paid on time and in full. Here’s a checklist to follow:
By taking these precautions, contractors can minimize disputes and maximize financial stability.
J.P. provided actionable strategies to help contractors secure payments, file liens correctly, and protect their businesses. Some of the biggest lessons include:
Texas lien laws are complex, but contractors who stay informed can protect their businesses and improve cash flow.
For a deeper dive into these topics, watch J.P. Vogel’s full presentation to gain additional legal strategies and best practices.
Watch here: https://www.youtube.com/watch?v=T05-Dl_NA8M
RCAT is committed to providing valuable resources to help roofing professionals navigate industry challenges.
To learn more, visit RCAT’s membership page today: https://www.rcat.net/membership.html