Liens

Question 1

lien

Question 2

mechanic’s lien

Answer 2

-in TX, a contractor, subcontractor, architect, engineer, surveyor, or other supplier of materials (materialman) or labor to be used for the construction or repair of a home or building, may secure a mechanic’s lien

Question 3

purpose of mechanic’s lien

Answer 3

-ensure that those engaged in building projects will receive payment for their labor

Question 4

scope of mechanic’s lien

Answer 4

• it covers payment for
  1) labor performed
  2) materials furnished or fabricated,
  3) or for the preparation of the plan

(does not extend to sidewalks, streets, or utilities that are public)

Question 5

subcontrctor

Answer 5

may not claim a lien that exceeds an amount equal to the labor performed, materials used, and proportionate profit margin

Question 6

priority of mechanic’s liens

Answer 6

-has preference over other creditors of the original contractor

Question 7

affidavit of lien

Answer 7

-a person claiming the lien must file an affidavit with the county clerk not later than the 15th of the 4th calendar month after the day of the indebtedness accrues

Question 8

determining indebtedness

Answer 8

original contractor or subcontractor?

Question 9

original contractor

Answer 9

• indebtedness accrues on the last day of the month in which:
  1) a written declaration is received by the original contracting parties stating that the original K has terminated, OR
  2) the original K has been completed, settled, or abandoned

Question 10

subcontractor

Answer 10

indebtedness accrues on the last day of the last month in which the labor performed or the materials furnished

Question 11

Notice:

Answer 11

any person who files an affidavit must notify the owner at her last known address.

• done by certified mail
• if filer is not original contractor, the filer must also send a copy to the original contractor
• notification must occur no later than the 5th day after the affidavit is filed in court
• subcontractor must give the original subcontractor written notice of any unpaid balance no later than the 15th day of the 2nd month in which the subcontractor’s labor was performed or material delivered

Question 12

priority

Answer 12

• a mechanic’s lieb attaches to the house, building, or improvements in preference to any prior lien, encumbrance, or mortgage on the land
• mechanic’s lien does not affect any lien, encumbrance, or mortgage on the land at the time of the inception of the mechanic’s lien

Question 13

liens

Answer 13

in TX, lien state, not a title state

-mortgage or creditor has a lien or security interest in the property, not the title to the property

Question 14

vendor’s lien

Answer 14

• in a K for a deed (installment K), a breach may give rise to a lien in favor of the seller (also known as the vendor)
• an equitable lien may be imposed for the benefit of a vendor who passed legal title to the buyer (vendee) bud did not receive the entire purchase price

Question 15

vendor’s lien 2

Answer 15

• vendor’s lien should be expressly reserved in the deed of trust
• if the buyer (vendee) defaults, the vendor may foreclose the lien and sue for the balance owed under the K, rescind the K and take possession, or sue to recover the title of possession