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Ask Attyadvisor Your Own Question
Attyadvisor, Attorney
Category: Real Estate Law
Satisfied Customers: 6866
Experience:  29 years of experience in General Practice, Real Estate Law and Estate Law.
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I found out that the person we hired to replace the roof on

Customer Question

I found out that the person we hired to replace the roof on our flip house subcontracted the repair and never paid his subcontractor even though I paid him - half up front and remaining on completion. The contract that he had with the roofer has only HIS name and signature - I thought it was his crew at the time. The roofer, I found out yesterday, was under the impression that the contractor was part-owner of the house, though that is completely false. James (the contractor) represented to me that he was partners with the roofer, and I just found out that he told the roofer that he was partners with me, but none of that is true. Now the roofer wants his money, of course, but is threatening to put a lien against my flip house, even though I paid the contractor over a month ago. Can he legally do put that lien on my property, even though his contract was NOT with me - my name is ***** ***** it anywhere - only James's name (the contractor's) is on that contract, and James does not have any ownership of the property?
JA: Because real estate law varies from place to place, can you tell me what state this is in?
Customer: Texas
JA: Have you talked to a lawyer yet?
Customer: Just a friend of a friend
JA: Anything else you think the lawyer should know?
Customer: Not that I can think of
Submitted: 11 months ago.
Category: Real Estate Law
Expert:  Attyadvisor replied 11 months ago.

Welcome and thank you for your question. I will be the professional that will be assisting you.

Expert:  Attyadvisor replied 11 months ago.

A contractor can subcontract work on a roof. The issue is what is stated in your contract and the subcontract.

It sounds as though you paid in full and this issue is exclusively between the contractor and the sub. Please correct me if I am wrong.

Expert:  Attyadvisor replied 11 months ago.

"Mechanic's liens, despite their name, are typically used by subcontractors and suppliers, and are a legal claim against property that has been remodeled or improved. For example, if you are remodeling your bathroom and the supplier who supplied the bathtub isn't paid by the general contractor, a lien can be placed against your house to recover the money.

What can be surprising to most homeowners is that it doesn't matter if you already paid the general contractor for the bathtub. If the subcontractor or supplier isn't paid by the general contractor, the law allows the subcontractors to come after you and the property that was improved (which is often your house). In the end, you may be responsible for paying for the work twice or being forced to sell your house, so it is important to understand how mechanic's liens work and how to avoid them.

Why Mechanic's Liens are Allowed

It may seem fundamentally unfair that you can end up paying for the general contractor's irresponsible behavior. The rationale for allowing mechanic's liens in the first place is that between the person with improved property (you) and the person who supplied your new marble bath tub, the supplier's needs to get paid are greater.

The law also presumes that you can in turn sue the general contractor. While this is true, this doesn't really help you in the short-run. Suppose a supplier places a mechanic's lien against your house because the general contractor failed to pay him when the general contractor lost all of his money gambling. You can certainly go file a lawsuit against the general contractor, and over time maybe garnish his wages or force him to sell his property, but that takes time and wringing money out of someone who doesn't pay his subcontractors and suppliers can be difficult. Meanwhile, you owe twenty thousand dollars and have a matter of days or months to pay the supplier or else your house will be sold to satisfy the mechanic's lien against you.

How Mechanic's Liens Work

To get a mechanic's lien, state law will usually require the subcontractor or supplier to do the following:

  • The subcontractor/supplier (who does not contract directly with the homeowner) must provide notice to the homeowner of what is being contributed (e.g., supplying the bathtub), typically within 20-30 days of contribution.
  • If the subcontractor/supplier isn't paid, they must file a "claim of mechanic's lien" in the county where the property is located.
  • The subcontractor/supplier then has typically two to six months to work out a solution with the property owner or file a lawsuit.

If the lawsuit isn't filed in time, then in most states the lien should have no further effect. However, it is still worth your time to get a court order (well after the lawsuit should have been filed), to clear your property of the lien. Otherwise you may have difficulties selling the property down the road.

Expert:  Attyadvisor replied 11 months ago.

Can subcontractors file liens on my home when I paid the contractor but he failed to pay his bills?

The answer to this question is controlled by Chapter 53 of the Texas Property Code, which sets out the process for filing and invalidating mechanic's and materialman's liens in Texas.

Under Chapter 53, unless the original contractor (the contractor who contracted with the owner for the work) has perfected a homestead mechanic's lien contract, no one on the project can file a valid mechanic's lien. To perfect a homestead mechanic's lien contract, the original contractor would have to: (1) have a written contract signed by all the owners (husband and wife) of the home; (2) prepare the contract with Chapter 53's specified homestead lien warnings; (3) and file the contract with the county clerk. If one or more of these requirements is missing or omitted, no contractor can file a valid lien for construction work on the home.

The owner may pay the original contractor up to 90% of the original contract price. However, if the owner receives a notice of non-payment from a subcontractor or supplier, the owner is required to withhold payment from the original contractor until the non-payment problem is resolved.

The owner is required to withhold the remaining 10% of the contract price (really 10% from each payment to the original contractor) until 30 days after the project is fully completed. (If no one can file a valid mechanic's lien on the project, then the owner is not required to withhold the 10% retainage. This situation occurs when the original contractor did not perfect a valid homestead mechanic's lien contract, or has posted a payment bond.)

If the owner has paid out all of the contract funds for the original contract in accordance with Texas law, no subcontractor or supplier may file a valid lien against the homeowner or the homestead property. Under Texas law, an owner is only responsible for the original contract price and no more, as long as the owner does not pay the original contractor after receiving a notice of non-payment, and (if required) withholds 10% retainage until 30 days after the project is fully complete.

If the subcontractor's lien is invalid, you can write to the subcontractor, and provide the reasoning why the lien is invalid, and demand the the subcontractor voluntarily release the lien. It is best to provide a filled out lien release to make it convenient for the subcontractor. You should advise the subcontractor that if it does not voluntarily release the lien, it could be liable for filing a fraudulent lien, which could allow the owner to recover $10,000 or actual damages whichever is greater under Chapter 12 of the Texas Civil Practice & Remedies Code.

Also, you should advise that if the subcontractor does not voluntarily release its lien, you as the owner may be forced to file suit and seek a summary removal of the lien, as well as attorney's fees and court costs under Texas Property Code section 53.160.

Where in Texas are you located so I can provide a link for a local Attorney in your area that provides FREE consultations and can assist you with this matter?

Expert:  Attyadvisor replied 11 months ago.

If you any additional questions for me please do not hesitate to let me know. Thank you for using JA we appreciate your business. If you would be kind enough to rate my service positively so I will receive credit for my work I would appreciate it.

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