Collecting in Texas

[Meier]

Does anyone have any experience with the legal system/collections in Texas?

My friend is an experienced attorney in Oklahoma. He tells me that in Oklahoma, after you complete your work on someone esle's property (materials or labor, so mowing is included), if you don't get paid, you can immediately file a lien on the property. This lien is only good for like 60 days or so. What you have to do then is get a judgement and that makes the lien valid for something like 5 years or so.

I doubt there's much difference between the way this works in Oklahoma vs Texas.

Anyone have experience with this in Texas?

Thanks,
DFW, TX

[Team Gopher]

Hi Meier,

Here are two great sites to review. There is a lot of information here.

CHAPTER 53. MECHANIC'S, CONTRACTOR'S, OR MATERIALMAN'S LIEN (http://www.capitol.state.tx.us/statutes/py/py0005300toc.html)

Texas Mechanic's Lien and Bond Claim Law:
The Construction Lien (http://library.lp.findlaw.com/articles/file/00322/000211/title/subject/topic/construction%20law_construction%20contracts/filename/constructionlaw_1_395)

[SWD]

Meier, yes I have, unfortunately, a great deal of experience with collecting this way.
Unless the law just changed, as a LCO, you cannot file a lien on a residental home site for lawn, landscape, or other normal LCO activity.
The steps to collect are:
1. Write a demand letter, return receipt requested, post a second normal mail.
2. After return receipt is given to you, wait the time you specificed in the letter.
3. You HAVE to know what preceinct the offender lives in as this is where you will go, talk to the JP, fill out the affidavit, then wait.
4. There are certain filing fees, typically start around $80.00, plus the mail receipts, then your lost time.
The good thing is Texas allows for 'reasonable' cost assocciated with collection efforts to be included in your affidavit. What I have done is calculate what the outstanding bill is, add interest of 18%, administrative fee of $175.00 (for actually doing the paper work), then the lost income for taking off of work to go file.
Usually the JP will try to negotiate a settlement between you the filer and the filee. This is because, once the JP gets involved, he assesses fines to the filee.
5. Now wait, as the Constable has to go out and serve the warrant to command the filee to appear in front of the JP. Depending on how busy the JP is, and how much money the JP and court system will make from this, the warrant may never get served.
Last but not least, if the warrant isn't served, you cannot do an end run around the JP, like into District court, as in other court will hear your complaint.
I have been waiting two years for a Constable to serve a criminal warrant off of a bad check to a dead beat.
Good luck,
Steve

[DFW Area Landscaper]

SWD,

Thanks for the input. I have been reading up on the mechanics' lien in Texas. The problem I see in reading the law is that we have to provide labor for construction or repair of a property.

Now, the city can claim that a property is out of ordinance if the grass is too tall. So, if we're mowing the lawn, wouldn't that be something that keeps or prevents the property from entering a state of disrepair? After all, if the property is not in ordinance with the city code, wouldn't a repair be necessary? Maybe maintenance could be considered a repair?

Chapter 53 doesn't define repair. If it did, we might very well qualify.

If we could figure out a loop hole in the law that would allow lawn mowing companies to get a mechanics' lien, we'd be so much better off.

A friend of mine is an attorney with basically zero experience with this, but he thought we'd be entitled to a constitutional artisans' lien. I just can't find anything anywhere about this type of lien.

The problem with a judgement lien is that if the customer files bankruptcy, they can wipe this out and then you've not only mowed their lawn for free, but your also out the fees for small claims court and filing the lien with the county clerk.

There is an attorney with a lot of experience with these matters that I could hire, but she charges $170.00 per hour. I can't really justify that rate to collect on $200 past due accounts. If I KNEW the customer had money, I'd do it. But then again, that's the reason they're not paying in the first place.

If you can get a mechanics lien, the only way you wouldn't get paid is if they enter bankruptcy and the mortgage gets foreclosed on. From what I understand, most personal bankruptcies basically wipe out all unsecured debts, like credit cards, but leave the mortgage untouched. Then, years later, when the deadbeat finally goes to refi or sell or get a home equity loan, he'd have to pay off the mechanics' lien first, plus interest.

Later,
DFW Area Landscaper

[SWD]

DFW, as I understand it, provided you have gone through the hoops of the demand letter and filing with the JP, a judgement can be attached. What this means is that if the deadbeat files bankruptcy, you go to court (again the JP) and agree upon what you will settle for.
Unfortunately, this takes time, patience and a bunch of money to collect what you are owed.
I wish I had a better statement than 'good luck'. However, I do not. I am still waiting for the constable to serve a warrant on a bad check for over $900 and have been waiting for over a year.
Another thing, just because some one doesn't pay, doesn't mean they are out of money. You just haven't made it painful enough for them to pay.
It took me a ton of time, a ton of phone calls and one certified letter to get a deadbeat to pay me $50 - but it was a principle matter.
All I can say is this state sucks when it comes to enforcing payment for services. I even tried the fraud angle and theft of services but the county attorney said no way, not for landscape maintenance.

[DFW Area Landscaper]

It just seems like such crap that if one constructs or repairs, they're entitled to a mechanic's lien. However, maintenance is not included.

What this means is that LCO's, carpet cleaners and maid services are about the only professions in the state of Texas who can go do work on someones home and aren't entitled to a mechanics' lien.

Plumbers...yes.
Window guys...yes
A/C Contractors...yes
Landcape installation guys...yes
Irrigation guys...yes
Lawn maintenance...no
Roofers...yes
Vinyl Siding guys...yes
Concrete guys...yes

Seems rather arbitrary if you ask me.

I wonder if painters can get mechanics' liens? Also, what about Orkin and the pesticide guys? Would extermination of termites be considered a repair? If riddance of that pest is a repair, then possibly you could say that anyone who removes pests is entitled? And mowing regularly removes certain weeds...which are defined as pests by the Texas Department of Agriculture.

Later,
DFW Area Landcaper

[SWD]

DFW, I agree with all of your info in the post yet one. I have tried through two attorneys, the JP and the county attorney for a mechanic's lien for landscape installation. All said it wasn't possible. Why it wasn't possible was that the state considers plants as a non permanent addition, therefore the state has a precident of not enforcing lien statutes for landscape installation. Perhaps the state has amended that part since I have been looking (it has been a year). I do know that irrigation installation has a mechanic's lien protection.
However, on a positive note, the deadbeat that fled to avoid paying me has been located. And his deadbeat girl friend who bounced a check in partial payment to me is the one whom I had criminal charges on - well I got payment for the bad check from the county yesterday. It only took 16 months.
With regards to payment, on new accounts for maintenance, I bill monthly. If I have not received payment that next month, I stop. If the new account wants landscape maintenance or installation, until a payment history is known, they pay for all material up front and half of the labor. Usually, about 90 % of the time, I have no problems with the customers on this position. It is the other 10% that say no way, and they end up being late payers on maintenance. I have a defined interest rate penalty for late payers, and I do enforce it. This has really helped to weed out the poor customers.
The only aspect I do not like with commercial accounts is I have never been able to successfully get them to pay interest when late. Therefore, I have adjusted my hourly rate upward to allow for the length of payment.

[DFW Area Landscaper]

Nope. Landscape installs get a mechanics' lien.

http://www.capitol.state.tx.us/statutes/py/py0005300.html#top

Section 53.021 Paragraph 2 (d)

A person who provides labor, plant material, or other supplies for the installation of landscaping for a house, building, or improvement, including the construction of a retention pond, retaining wall, berm, irrigation system, fountain, or other similar installation, under or by virtue of a written contract with the owner or the owner's agent, trustee, or receiver has a lien on the property.

Later,
DFW Area Landscaper

[eakern]

Is there any way that one could use a criminal charge for theft of services ? I know if you run out on a dinner or a haircut.etc..you can be charged with theft of services.

[DFW Area Landscaper]

++++Is there any way that one could use a criminal charge for theft of services ? I know if you run out on a dinner or a haircut.etc..you can be charged with theft of services.++++

Won't work. When a thief runs out on a dinner check, they are showing intent to defraud when they attempt to run out. I doubt many judges would view this as simply a breach of contract.

When someone doesn't pay a bill, it's not criminal intent. It's a breach of contract.

Later,
DFW Area Landscaper

[DFW Area Landscaper]

I bumped into another LCO who is storing in the same storage place as me. We got to talking and both realized that deadbeats are killing both of us.

He has successfully filed and collected via the mechanic's lien. He installed a landscape and didn't get paid. He was out $2,600.00. Finally, he hired an attorney who wrote the mechanic's lien for about a hundred bucks and he drove it to Denton and filed it with the county. The problem is, he was late in filing this lien. Because he had missed the deadline, the lien wasn't valid and he knew that. But he filed it anyway in hopes that he would be able to collect.

The home went up for sale. He was licking his chops...payday at last. He was surprised when he drove by a few weeks later and the home had been sold. He called the real estate agent and tracked down the title company. He said "Didn't you guys see my lien? Didn't you guys do a title search?" The title company basically admitted that they don't always do title searches. He told the title company that if they didn't get him a check for $2,600.00 within 24 hours he would notify the buyer that they had just bought a $2,600.00 mechanic's lien.

He had a check for $2,600.00 the next day.

I think the moral of the story is this:

Anyone can file a mechanic's lien, even if they don't have a right to do so. You don't have to prove anything in order to file the document with the county. In Texas, you don't have to back up the mechanic's lien with a subsequent judgement.

If a home owner wants to sell his house and he knows damn good and well that he stiffed the lawn guy and finds that there is a mechanic's lien preventing the pending sale, what do you think the homeowner would do? Would he hire an attorney for $170 an hour and hope that he could get the $300 mechanic's lien reversed, then come after the LCO for the attorney's fees he had to pay? Or would he just cough up the $300 to avoid jeopardizing the $150K sale?

I think it may be a chance worth taking.

Any thoughts?

Later,
DFW Area Landcaper

[Hodge]

I believe Just Mow It files these type of liens. According to the stature:

(b) The construction or materials under Subsection (a) must
be visible from inspection of the land on which the improvements are
being made.
(c) An owner and original contractor may jointly file an
affidavit of commencement with the county clerk of the county in
which the land is located not later than the 30th day after the date
of actual commencement of construction of the improvements or
delivery of materials to the land. The affidavit must contain:
(1) the name and address of the owner;
(2) the name and address of each original contractor,
known at the time to the owner, that is furnishing labor, service,
or materials for the construction of the improvements;
(3) a description, legally sufficient for
identification, of the property being improved;
(4) the date the work actually commenced; and
(5) a general description of the improvement.
(d) An affidavit filed in compliance with this section is
prima facie evidence of the date of the commencement of the
improvement described in the affidavit. The time of inception of a
mechanic's lien arising from work described in an affidavit of
commencement is the date of commencement of the work stated in the
affidavit.