How can I ensure that the contractors will pay the subcontractors to avoid construction liens?
Full Question:
Answer:
In Texas, any person who furnishes labor or materials for the construction of improvements on real property shall, if requested and as a condition of payment for such labor or materials, provide to the requesting party, or the party's agent, an affidavit stating that the person has paid each of the person's subcontractors, laborers, or materialmen in full for all labor and materials provided to the person for the construction. In the event, however, that the person has not paid each of the person's subcontractors, laborers, or materialmen in full, the person shall state in the affidavit the amount owed and the name and, if known, the address and telephone number of each subcontractor, laborer, or materialman to whom the payment is owed.
One way for an owner to protect against liens in to file an affidavit of completion. This will start the clock running on the timeline for liens to be filed. An owner may file with the county clerk of the county in which the property is located an affidavit of completion. The affidavit must contain:
(1) the name and address of the owner;
(2) the name and address of the original contractor;
(3) a description, legally sufficient for identification, of the real property on which the improvements are located;
(4) a description of the improvements furnished under the original contract;
(5) a statement that the improvements under the original contract have been completed and the date of completion; and
(6) a conspicuous statement that a claimant may not have a lien on retained funds unless the claimant files the affidavit claiming a lien not later than the 30th day after the date of completion.
It is recommended to have the terms of the contract in writing to avoid future disputes. A lien waiver may also be requested as a condition of partial or full payment. A lien waiver protects against mechanics' liens being filed against the property.
