A Lien Has Been Filed Against My Property
You finished the project and you made your payments. Or at least you thought you did. And now there is a mechanic’s lien on your property and you are trying to figure out what to do about it.
Or you are a general contractor who got paid by the owner, paid your subcontractors what you believed you owed, and now a sub has filed a lien against the project claiming they were shortchanged.
Either way, a lien has been filed against your property or your project and you need to understand your options. Cook Keith & Davis also defends contractors and property owners who have been sued, regardless of the basis of the lawsuit. This is that page.
Step One: Evaluate the Lien
Not all mechanic’s liens are valid. A lien that was filed after the deadline has passed is unenforceable. A lien with a defective affidavit, such as a wrong owner name, wrong legal description, or missing required information, may be invalid. A lien for an amount that is clearly wrong, or for work that was never performed, or filed by a party who has no right to claim one, can be challenged.
The first thing we do when a client comes to us with a lien filed against their project is evaluate whether the lien is legally valid on its face. Many liens have problems. Some have problems that are fatal to the lien. Knowing what you are dealing with shapes everything that comes next.
Option 1: Pay the Undisputed Amount and Negotiate
If some portion of the claim is legitimate, often the fastest resolution is to acknowledge and pay what is clearly owed and negotiate the rest. A subcontractor who is owed real money is more likely to accept a reasonable settlement than one who believes they are being ignored. Resolving the underlying dispute removes the lien.
Option 2: Bond Over the Lien
If you need to sell or refinance the property and cannot wait for the underlying dispute to be resolved, bonding over the lien is often the right move. You post an indemnity bond based on the lien claim amount, the lien is discharged from the property, and the dispute continues against the bond rather than the land. Your property is free to be sold or refinanced. The claimant still has their remedy against the bond fund rather than the real estate.
We handle bond-over proceedings regularly for property owners and general contractors who are under time pressure from a pending closing or refinancing.
Option 3: Challenge the Lien in Court
If the lien is defective, was filed too late, or is based on a false claim, we can file a lawsuit to have it declared invalid and ordered discharged. This is the right path when the claim is clearly groundless and the claimant is not interested in a reasonable resolution. It takes longer than bonding over the lien, but a court order declaring the lien invalid is a complete resolution of the title issue.
Option 4: Wait Out the Foreclosure Deadline
A lien that is never foreclosed eventually becomes unenforceable. If the claimant does not file a foreclosure lawsuit within the statutory window, the lien expires. In some cases, particularly where the lien is clearly defective and the claimant is unlikely to pursue it, the right strategic advice is to do nothing and let the clock run.
We would never recommend this approach without carefully evaluating the specific situation, because the consequences of being wrong are serious: if the claimant does file suit in time and the lien is valid, you have lost the window to resolve it on favorable terms.
When a General Contractor Is Caught in the Middle
Some of our most complicated cases involve a general contractor who is caught between an owner who refuses to pay the final draw and a subcontractor who has filed a lien because they have not been paid. The GC cannot pay the sub because the owner has not paid the GC, and the sub is threatening to foreclose.
This is a difficult position and we have handled many of them. The solutions typically involve some combination of pressure on the owner, negotiation with the sub, and careful management of the GC’s own lien rights against the owner. If you are in this situation, the worst thing you can do is nothing. Both the owner dispute and the subcontractor lien have deadlines, and letting time pass is rarely to your advantage.
A Note on Fraudulent Liens
Occasionally a lien is filed by someone who knows the claim is false, who inflated the amount, who was already paid, or who filed as a pressure tactic rather than to collect a legitimate debt. Texas takes a dim view of this. Filing a fraudulent lien affidavit is a criminal offense, and a person who files one is personally liable for damages caused by the false filing.
If you believe a lien filed against your property is fraudulent, tell us. We will evaluate it and advise you on the appropriate response.
Frequently Asked Questions
A lien has been filed against my property. Does this mean I owe the money claimed?
Not necessarily. A lien affidavit is a one-sided document, because the claimant files their own account of what is owed. Whether the lien is valid and whether the amount is correct are separate questions that require evaluation. Many filed liens have legal defects, incorrect amounts, or were filed after the statutory deadline. Contact us and we will evaluate the lien before you decide how to respond.
Can I still sell my property with a mechanic's lien on it?
Selling a property with a recorded lien is difficult because a title company will typically not insure the title and a lender will not fund a loan against it without the lien being addressed. Your options are to resolve the underlying dispute and obtain a release, bond over the lien to discharge it from the title, or challenge the lien in court. We handle all three approaches. Call us if you have a pending sale and a lien that needs to be addressed quickly.
What is bonding over a mechanic's lien?
Bonding over a lien means posting an indemnity bond with the court in an amount based on the lien claim. Once the bond is accepted, the lien is discharged from the property's title, and the property is free to be sold or refinanced. The dispute continues, but against the bond fund rather than the real estate. This is often the fastest way to clear a title that is under time pressure.
I'm a GC. The owner won't pay me, and a sub filed a lien. What do I do?
This is a complicated position but a common one, and we handle it regularly. The solution typically involves simultaneously pursuing the owner for the amounts owed to you, negotiating with the subcontractor to hold off on foreclosure while the owner dispute is resolved, and protecting your own lien rights against the owner. Contact us immediately, because both sides of this situation have deadlines that are running.
Can I get the lien removed without paying or bonding if it looks defective?
Possibly. If the lien is defective, was filed after the deadline, or is based on a false claim, we can file a lawsuit to have it declared invalid and ordered discharged. A lien filed after the deadline has passed is unenforceable, and a lien with a wrong owner name, a wrong legal description, or missing required information may be invalid. The first thing we do is evaluate whether the lien is legally valid on its face, because that shapes everything that comes next.
Do I have to do anything, or will the lien expire on its own?
A lien that is never foreclosed eventually becomes unenforceable. If the claimant does not file a foreclosure lawsuit within the one-year statutory window, the lien expires. In some cases, particularly where the lien is clearly defective and the claimant is unlikely to pursue it, the right advice is to do nothing and let the clock run. We would not recommend that approach without carefully evaluating your situation, because if the claimant does file suit in time and the lien is valid, you will have lost the window to resolve it on favorable terms.