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In Texas I have 2 projects and 2 contracts for 1 owner- 2…

Customer Question
In Texas I have...

In Texas I have 2 projects and 2 contracts for 1 owner- 2 different buildings. If the owner received a notice of lien on project 1 can they withhold funds from me on project 2 that has no liens agains it?

Lawyer's Assistant: Has anything been filed or reported?

The building owner stated he got an intent to lien notice on project 1

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

That is it! Thanks!

Submitted: 7 months ago.Category: Legal
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Answered in 2 hours by:
11/17/2017
Lawyer: Irwin Law, Attorney replied 7 months ago
Irwin Law
Irwin Law, Attorney
Category: Legal
Satisfied Customers: 7,563
Experience: Lawyer & Real Estate Broker, 30+ years, foreclosure, land contracts, inheritance, probate.
Verified

Did you file the lien on Bldg. #1? If not, I fail to see any connection between that and your bill for work on project 2. It sounds like Your customer might be having some cash flow problems.

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Customer reply replied 7 months ago
Here is the situation. We- LP Services was hired to do work for the Hartman corporation. They own many buildings and have many projects going on. We did 1 job- completed it and we were paid on that job. We started a 2nd job roughly a month later for a different building. Each job had a separate contract that was signed.We are now finished with job/ contact 2. We were paid half of this contract in the beginning of the job to start and paid 1 15% draw mid job. We are now finished with this job, in its entirety. Once we are done the job is inspected and walked by the property owner and us- the contractor for a final sign off. That happened and there were a few minor issues that needed addressing. We addressed the issue the next day and had a 2nd inspection and all was OK and signed off on/ completed.
It is now time for us- LP services to be paid out the remainder of this job. We are owed roughly $23,000 per our contract.
Here is the issue- The Hartman corporation received a notice of intent to lien on the first job we did for them which was on a different building and carried a separate contract. An electrical sub contractor that we hired to do some work on that first job decided now to send an intent to lien notice to the property owner- Hartman- on the very first job. It is frivolous and this sub contractor is just trying to get money for work he never completed.However Hartman corporation said to us- Even though we owe you money on a contract for building 2 where the work has been completed we are holding your funds because we got a notice of intent to lien on an old project you did for us.My question is- Can they legally do this? Can The Hartman Corporation legally hold funds from us that we are owed on a completed job because they received an intent to lien notice on a different job that has nothing to do with the job that we are owed money on?We had 2 different contracts with this company for each job we did.Thank you,Nikki
Lawyer: Irwin Law, Attorney replied 7 months ago

Whether they can do that or not depends on the precise language of the contracts between you and Hartman. There would have to be indemnification language that would permit them to withhold money based upon any claim for which your company might eventually be liable to them for. I don't claim to be an expert in Texas mechanics lien law, but I know that there are many legal defenses between filing the notice of intent and actually obtaining a judgment against the property owner. If the lien notice is invalid on its face, it should be disregarded. You should have of your lawyer review the construction agreements to see whether or not such withholding may be permitted, or if you are entitled to your money after perhaps posting some kind of surety arrangement. Hartman will have to defend any lawsuit that might be brought to enforce the lien, so that is an actual problem that will have to be resolved.

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