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Understanding mechanic's liens in Texas

 Posted on October 27, 2016 in Uncategorized

Buying a home should be an exciting, fun time for any family. Unfortunately, many end up with bad experiences because they didn't do their homework first. Before you buy a home, there are many details you can't afford to overlook. Once you're approved for financing, the house has passed inspection and you are ready to move in, there may still be one problem with your home you are unaware of. In order to cross everything off your list when buying a home, you may want to first check to make sure you don't have a mechanic's lien against it or determine if you are responsible for it.

What is a mechanic's lien?

When a new home is built or an older home remodeled, a general contractor is often hired to handle the project. This individual bids out the jobs, schedules the subcontractors and makes sure that your suppliers and contractors are paid. If the contractor fails to do his job, you may end up with a lien on the property called a mechanic's lien.

A mechanic's lien is often taken out by subcontractors and suppliers when they don't get paid for their work or supplies. This lien is placed on the home and can be passed on to the next homeowner when the home is sold.

It doesn't matter if the homeowner actually paid the general contractor or not. What matters is if the money that was paid reached the hands of the right people. If the general contractor chooses to keep the money, then a mechanic's lien may be placed on the home to let everyone know that money is still owed on the property. Rarely is this the homeowner's fault, although they may end up in trouble.

How can I avoid one?

If you are buying a home, check with the county clerk to go over your home's records to determine if there is a mechanic's lien on the property. If there is one, you may need to negotiate with the current homeowners to get that paid so it's not your responsibility.

If you are working with a general contractor to build or improve your home, you can limit your chances of problems in several ways.

  • Write checks directly to the suppliers and subcontractors and have the general contractor pass it on.
  • Have your general contractor get lien waivers from all the suppliers and subcontractors.
  • Pay your suppliers and subcontractors yourself and deduct the total from the amount you pay the general contractor.

If you are struggling with a general contractor to get your bills paid or have purchased a home that has a mechanic's lien on it, an attorney may be able to provide valuable information on how to deal with it.

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