THE MECHANICS OF MECHANIC’S AND MATERIALMEN’S LIENS By Shannon A.S. Quadros ©2014 ©2014 By...

THE MECHANICS OF THE MECHANICS OF MECHANIC’S AND MECHANIC’S AND

MATERIALMEN’S LIENSMATERIALMEN’S LIENS

By Shannon A.S. QuadrosBy Shannon A.S. Quadros

©2014©2014By Shannon A.S. QuadrosBy Shannon A.S. Quadros

©2014©2014

CHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & AUGHTRYCHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & AUGHTRYCHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & AUGHTRYCHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & AUGHTRY

SO LET’S START SO LET’S START WITH WHAT THIS WITH WHAT THIS PRESENTATION IS PRESENTATION IS

NOT ABOUTNOT ABOUT

SO WHY SHOULD SO WHY SHOULD YOU LISTEN TO YOU LISTEN TO

ANYTHING I HAVE ANYTHING I HAVE TO SAY…TO SAY…

SO WHAT ARE LIENS SO WHAT ARE LIENS EXACTLYEXACTLY

Two Sources of Authority under Two Sources of Authority under Texas Law for Liens:Texas Law for Liens:

1. The Texas Constitution1. The Texas Constitution

and and

2. Texas Property Code 2. Texas Property Code

Texas Constitution Art. XVI Texas Constitution Art. XVI Section 37Section 37

Mechanics, artisans and materialmen, of every class, shall have a lien upon the buildings and articles made or repaired by them for the value

of their labor done thereon, or material furnished therefor; and the Legislature shall provide by law for the speedy and efficient

enforcement of said liens.

Texas Property Code Texas Property Code Ch. 53Ch. 53

This is where the law on liens lives!

Who is entitled to lien?Who is entitled to lien?

1.1. A person who provides labor or materials A person who provides labor or materials

for the construction or repair of a building, for the construction or repair of a building,

house, improvement under a contract with house, improvement under a contract with

the owner, owner’s agent, contractor, or the owner, owner’s agent, contractor, or

subcontractor.subcontractor.

1.1. A person who provides labor or materials A person who provides labor or materials

for the construction or repair of a building, for the construction or repair of a building,

house, improvement under a contract with house, improvement under a contract with

the owner, owner’s agent, contractor, or the owner, owner’s agent, contractor, or

subcontractor.subcontractor.


2.2. A person who specially fabricates materials A person who specially fabricates materials

even if the materials are not delivered.even if the materials are not delivered.

3.3. An architect, engineer, surveyor, who has a An architect, engineer, surveyor, who has a

written contract with an owner in written contract with an owner in

connection with construction on a propertyconnection with construction on a property

2.2. A person who specially fabricates materials A person who specially fabricates materials

even if the materials are not delivered.even if the materials are not delivered.

3.3. An architect, engineer, surveyor, who has a An architect, engineer, surveyor, who has a

written contract with an owner in written contract with an owner in

connection with construction on a propertyconnection with construction on a property


4.4. A person who provides labor or materials for A person who provides labor or materials for

landscaping of a property with a written landscaping of a property with a written

contract with the owner.contract with the owner.


demolition of a structure with a written demolition of a structure with a written



landscaping of a property with a written landscaping of a property with a written



demolition of a structure with a written demolition of a structure with a written


What can be liened?What can be liened?1. In urban areas a lien typically extends to the house, 1. In urban areas a lien typically extends to the house,

building, improvements to each lot of land on which the building, improvements to each lot of land on which the

labor and materials were provided. labor and materials were provided.

2. In rural areas, a lien does not extend to more than 50 2. In rural areas, a lien does not extend to more than 50

acres on which the improvement or repairs was acres on which the improvement or repairs was

constructed.constructed.

1. In urban areas a lien typically extends to the house, 1. In urban areas a lien typically extends to the house,

building, improvements to each lot of land on which the building, improvements to each lot of land on which the

labor and materials were provided. labor and materials were provided.

2. In rural areas, a lien does not extend to more than 50 2. In rural areas, a lien does not extend to more than 50

acres on which the improvement or repairs was acres on which the improvement or repairs was

constructed.constructed.

What about tenants?What about tenants?

If a party contracted with a tenant as opposed If a party contracted with a tenant as opposed

to an owner, any lien is limited to the leasehold to an owner, any lien is limited to the leasehold

as opposed to the entire property.as opposed to the entire property.

- But there are ways to get paid…- But there are ways to get paid…

If a party contracted with a tenant as opposed If a party contracted with a tenant as opposed

to an owner, any lien is limited to the leasehold to an owner, any lien is limited to the leasehold

as opposed to the entire property.as opposed to the entire property.

- But there are ways to get paid…- But there are ways to get paid…

Understanding the PartiesUnderstanding the Parties

The Owner’s Agent The Owner’s Agent and the Sham Contractand the Sham Contract

• Sometimes the owner’s agent or representative is Sometimes the owner’s agent or representative is apparent and obvious. They are treated as apparent and obvious. They are treated as having dealt directly with the owner.having dealt directly with the owner.

• Who’s the owner’s agent?Who’s the owner’s agent?– Can the owner control the third-party?Can the owner control the third-party?

– Can the third-party control the owner?Can the third-party control the owner?

– Is the owner trying to hide behind the agent? Is the owner trying to hide behind the agent?

• Watch out for the special purpose entity?Watch out for the special purpose entity?

• Sometimes the owner’s agent or representative is Sometimes the owner’s agent or representative is apparent and obvious. They are treated as apparent and obvious. They are treated as having dealt directly with the owner.having dealt directly with the owner.

• Who’s the owner’s agent?Who’s the owner’s agent?– Can the owner control the third-party?Can the owner control the third-party?

– Can the third-party control the owner?Can the third-party control the owner?

– Is the owner trying to hide behind the agent? Is the owner trying to hide behind the agent?

• Watch out for the special purpose entity?Watch out for the special purpose entity?

Finding out Who’s WhoFinding out Who’s Who

• Owner is obligated to furnish information!– the legal description of the property;– verification of the existence of a surety bond

(and, if so, the name and address of the surety);

– whether there are any prior recorded liens or security interests in the property being improved and the names and addresses of those lienholders; and

– the date on which the original contract was executed.

• Owner is obligated to furnish information!– the legal description of the property;– verification of the existence of a surety bond

(and, if so, the name and address of the surety);

– whether there are any prior recorded liens or security interests in the property being improved and the names and addresses of those lienholders; and


Finding out Who’s WhoFinding out Who’s Who

• Original Contractor is obligated to furnish information

– the name and address of the person to whom the original contractor furnished labor and materials for the construction project;

– whether the original contractor has furnished or was furnished with a payment bond (and, if so, the name and address of the surety); and


• Original Contractor is obligated to furnish information

– the name and address of the person to whom the original contractor furnished labor and materials for the construction project;

– whether the original contractor has furnished or was furnished with a payment bond (and, if so, the name and address of the surety); and


LIEN NOTICESLIEN NOTICES

Key elements of a “good” Key elements of a “good” notice of intent to liennotice of intent to lien

• It needs to be transmitted by Certified or Registered Mail or hand-delivered. If it gets to the right party it doesn’t matter how it gets to them. But send it CMRRR.

• Always a good idea to send a copy of the open unpaid invoices.

• Always include funds trapping language.

• It needs to be transmitted by Certified or Registered Mail or hand-delivered. If it gets to the right party it doesn’t matter how it gets to them. But send it CMRRR.

• Always a good idea to send a copy of the open unpaid invoices.

• Always include funds trapping language.

Notice Requirements of an Original Notice Requirements of an Original Contractor on Non-Residential ProjectsContractor on Non-Residential Projects

• None!

• Doesn’t that make you want to be an original contractor?

• None!

• Doesn’t that make you want to be an original contractor?

Notice Requirements of a Subcontractor Notice Requirements of a Subcontractor to an Original Contractor on Non-to an Original Contractor on Non-

Residential ProjectsResidential Projects

Notice Requirements of a Subcontractor Notice Requirements of a Subcontractor to an Original Contractor on Non-to an Original Contractor on Non-

Residential ProjectsResidential Projects

• Required to give notice of a specified month’s unpaid balance to the owner with a copy to the original contractor by the 15th of the third month following the provision of the unpaid labor or materials.

• E.g. Subcontractor 1 is owed for materials delivered on January 20. A notice of intent to lien must be provided to the owner and original contractor by April 15.

• Required to give notice of a specified month’s unpaid balance to the owner with a copy to the original contractor by the 15th of the third month following the provision of the unpaid labor or materials.

• E.g. Subcontractor 1 is owed for materials delivered on January 20. A notice of intent to lien must be provided to the owner and original contractor by April 15.

Notice Requirements of a Sub-Notice Requirements of a Sub-subcontractor on Non-Residential subcontractor on Non-Residential

ProjectsProjects

• Required to give notice of a specified month’s unpaid balance to the original contractor by the 15th of the second month following the provision of the unpaid labor or materials and a notice to the owner and the original contractor by the 15th of the third month.

• E.g. Sub-Subcontractor 1 is owed for materials delivered on January 20. A notice of intent to lien must be provided to the original contractor on March 15 and to the owner and original contractor by April 15.

• Required to give notice of a specified month’s unpaid balance to the original contractor by the 15th of the second month following the provision of the unpaid labor or materials and a notice to the owner and the original contractor by the 15th of the third month.

• E.g. Sub-Subcontractor 1 is owed for materials delivered on January 20. A notice of intent to lien must be provided to the original contractor on March 15 and to the owner and original contractor by April 15.

Practice TipPractice Tip

• Send your notices to everybody!Send your notices to everybody!– Include the lender, owner, etc.

– If you know of a parent company of the special purpose entity, send it to them as well.

– Owner’s are great leverage to a slow paying general contractor

– Lender’s are the best leverage as it is often a breach of the loan agreement to let liens to be placed on the property.

• Send your notices to everybody!Send your notices to everybody!– Include the lender, owner, etc.

– If you know of a parent company of the special purpose entity, send it to them as well.

– Owner’s are great leverage to a slow paying general contractor

– Lender’s are the best leverage as it is often a breach of the loan agreement to let liens to be placed on the property.

Residential Construction Lien Notices and Special Consideration

• What qualifies as residential construction?– Work under a residential construction contract

• Well, what’s a residential construction contract?– Contract between an owner and contractor for construction or

repair of the owner’s residence which could include a single-family house, duplex, triplex, quadruplex, or a unit in a multi-unit structure such as a condominium.

– The home has to be owned by at least one adult and used as a dwelling by one of the owners.

• What qualifies as residential construction?– Work under a residential construction contract

• Well, what’s a residential construction contract?– Contract between an owner and contractor for construction or

repair of the owner’s residence which could include a single-family house, duplex, triplex, quadruplex, or a unit in a multi-unit structure such as a condominium.

– The home has to be owned by at least one adult and used as a dwelling by one of the owners.


• The Property Code requires residential contracts to include the following:– Work must be under a written contract– Contract prior to starting work or delivering materials– Contract must be filed with the county clerk in which the homestead is

located.

• Residential Contract also has to have certain disclosure statements. Those should be substantially complied with, which is Property Code talk for copy everything there.

• The Property Code requires residential contracts to include the following:– Work must be under a written contract– Contract prior to starting work or delivering materials– Contract must be filed with the county clerk in which the homestead is

located.

• Residential Contract also has to have certain disclosure statements. Those should be substantially complied with, which is Property Code talk for copy everything there.


• Residential Contract also has to provide the homeowner:

– a list of subcontractors and suppliers,

– A disbursement statement upon request, and

– A final bill-paid affidavit upon completion of the work

• Residential Contract also has to provide the homeowner:

– a list of subcontractors and suppliers,

– A disbursement statement upon request, and

– A final bill-paid affidavit upon completion of the work

Notice Requirements of an Original Notice Requirements of an Original Contractor on Residential ProjectsContractor on Residential Projects

• None!

• Again, doesn’t that make you want to be an original contractor?

• None!

• Again, doesn’t that make you want to be an original contractor?

Notice Requirements of a Subcontractor Notice Requirements of a Subcontractor on Residential Projectson Residential Projects

• The Property Code doesn’t differentiate between a subcontractor or a sub-subcontractor on residential projects.

• All contractors that are not original contractors on residential projects are treated the same.

• The Property Code doesn’t differentiate between a subcontractor or a sub-subcontractor on residential projects.

• All contractors that are not original contractors on residential projects are treated the same.

Notice Requirements of a Subcontractor Notice Requirements of a Subcontractor on Residential Projectson Residential Projects

• Subcontractor needs to give the owner and original contractor notice of unpaid balance no later than the 15th day of the second month after labor and materials were provided.

• For e.g. if materials provided on February 22 remain unpaid, subcontractor has to give owner and original contractor notice by April 15 of the unpaid balance.

• Subcontractor needs to give the owner and original contractor notice of unpaid balance no later than the 15th day of the second month after labor and materials were provided.

• For e.g. if materials provided on February 22 remain unpaid, subcontractor has to give owner and original contractor notice by April 15 of the unpaid balance.

Notice Requirements For Specially Notice Requirements For Specially Fabricated MaterialsFabricated Materials

• Doesn’t matter whether it is residential or not

• Has to give the owner notice not later than the 15th of the second month after the month in which the fabricator receives and accepts the order for material

• If not a direct contractor of the original contractor, has to send a copy of any notice to the original contractor as well..

• Doesn’t matter whether it is residential or not

• Has to give the owner notice not later than the 15th of the second month after the month in which the fabricator receives and accepts the order for material

• If not a direct contractor of the original contractor, has to send a copy of any notice to the original contractor as well..

Notice Requirements For Specially Notice Requirements For Specially Fabricated MaterialsFabricated Materials

Filing the Lien AffidavitFiling the Lien Affidavit- The Accrual of Indebtedness- The Accrual of Indebtedness

• A lien affidavit is filed according to when the indebtedness accrues for that particular contractor.

• For an original contractor accrual of indebtedness is either the last day of the month in which the contract was terminated or the last day of the month in which the original contract were completed, settled, or abandoned.

• A lien affidavit is filed according to when the indebtedness accrues for that particular contractor.

• For an original contractor accrual of indebtedness is either the last day of the month in which the contract was terminated or the last day of the month in which the original contract were completed, settled, or abandoned.

Filing the Lien AffidavitFiling the Lien Affidavit- The Accrual of Indebtedness- The Accrual of Indebtedness

• For a subcontractor accrual of indebtedness is the last day of the last month in which the labor was performed or materials furnished.

• For specially fabricated materials, accrual of indebtedness occurs on the last day of the month the materials were delivered; the last day of the last month in which delivery of the last material would normally have been required; or the last day of the month of any breach or termination of the contract.

• For a subcontractor accrual of indebtedness is the last day of the last month in which the labor was performed or materials furnished.

• For specially fabricated materials, accrual of indebtedness occurs on the last day of the month the materials were delivered; the last day of the last month in which delivery of the last material would normally have been required; or the last day of the month of any breach or termination of the contract.

Filing the Lien AffidavitFiling the Lien Affidavit- Date of Filing- Date of Filing

• On non-residential projects, the lien affidavit has to be filed no later than the 15th day of the fourth calendar month after the day the indebtedness accrues.

• On residential projects, the lien affidavit has to be filed no later than the 15th day of the third month after the day on which indebtedness accrues

• On non-residential projects, the lien affidavit has to be filed no later than the 15th day of the fourth calendar month after the day the indebtedness accrues.

• On residential projects, the lien affidavit has to be filed no later than the 15th day of the third month after the day on which indebtedness accrues

The Lien Affidavit The Lien Affidavit • The Property Code is very explicit in what has to be included

in the lien affidavit.• Essential elements of a lien affidavit include:

– signed by the claimant or one authorized by claimant– A sworn statement of the amount of the claim;– The name and last known address of the owner or reputed owner;– A general statement of the kind of work done and materials furnished

by the claimant and, for a claimant other than an original contractor, a statement of each month in which the work was done and materials furnished for which payment is requested;

• The Property Code is very explicit in what has to be included in the lien affidavit.

• Essential elements of a lien affidavit include:– signed by the claimant or one authorized by claimant– A sworn statement of the amount of the claim;– The name and last known address of the owner or reputed owner;– A general statement of the kind of work done and materials furnished

by the claimant and, for a claimant other than an original contractor, a statement of each month in which the work was done and materials furnished for which payment is requested;

The Lien Affidavit The Lien Affidavit • Essential elements of a lien affidavit (cont.):

– The name and last known address of the person by whom the claimant was employed or to whom the claimant furnished materials or labor;

– The name and last known address of the original contractor;– A legal description of the property to be charged with the lien;– The claimant’s name, mailing address, and, if different, physical

address; and– For a claimant other than an original contractor, a statement identifying

the date each notice of the claim was sent to the owner and the method by which the notice was sent.

• Essential elements of a lien affidavit (cont.):– The name and last known address of the person by whom the claimant

was employed or to whom the claimant furnished materials or labor;– The name and last known address of the original contractor;– A legal description of the property to be charged with the lien;– The claimant’s name, mailing address, and, if different, physical

address; and– For a claimant other than an original contractor, a statement identifying

the date each notice of the claim was sent to the owner and the method by which the notice was sent.

The Lien Affidavit The Lien Affidavit

• While not required, it is “encouraged” to attach a copy of the contract under which the work was performed and a copy of all notices that were sent with regard to the ultimate lien claim.

• Lien affidavit must be filed in the county in which the subject

property is located

• Copies of the lien affidavit must be sent by certified mail to the owner and original contractor within five days of filing. Send it to everybody!

• While not required, it is “encouraged” to attach a copy of the contract under which the work was performed and a copy of all notices that were sent with regard to the ultimate lien claim.

• Lien affidavit must be filed in the county in which the subject

property is located

• Copies of the lien affidavit must be sent by certified mail to the owner and original contractor within five days of filing. Send it to everybody!

Lien Filing – Practice TipsLien Filing – Practice Tips

• It’s all about timing – particularly when you need an original signature from out of town.

• Smaller county filing systems might not be what

you expect. Build in extra days to allow for glitches.

• Miss your deadline. Call your malpractice carrier, and then your client!

• It’s all about timing – particularly when you need an original signature from out of town.

• Smaller county filing systems might not be what

you expect. Build in extra days to allow for glitches.

• Miss your deadline. Call your malpractice carrier, and then your client!

Retainage ClaimsRetainage Claims

• An owner is required to retain 10% of the contract price or reasonable value of the completed work on an unbonded project.

• Retainage is a backstop for a “bad-actor” original contractor that has dissipated all the funds prior to the subcontractors getting paid.

• Owner has to hold on to the retained funds for 30 days after the work is completed. With the appropriate notices, an owner will not release to the original contractor if they are aware of unpaid subcontractor invoices.

• An owner is required to retain 10% of the contract price or reasonable value of the completed work on an unbonded project.

• Retainage is a backstop for a “bad-actor” original contractor that has dissipated all the funds prior to the subcontractors getting paid.

• Owner has to hold on to the retained funds for 30 days after the work is completed. With the appropriate notices, an owner will not release to the original contractor if they are aware of unpaid subcontractor invoices.

Retainage ClaimsRetainage Claims• To make a claim against the retained funds a subcontractor has to file a lien

affidavit no later than 30 days after the original contract is completed, terminated or abandoned.

• How do we know a contract is done?

• Owner is required to give notice to all subcontractors that have given an owner statutory notices or that have requested notice of completion of the contract.

• If the Owner fails to send out the notice the subcontractor is relieved of their obligations to claim retainage and can just file the lien affidavit.

• To make a claim against the retained funds a subcontractor has to file a lien affidavit no later than 30 days after the original contract is completed, terminated or abandoned.

• How do we know a contract is done?

• Owner is required to give notice to all subcontractors that have given an owner statutory notices or that have requested notice of completion of the contract.

• If the Owner fails to send out the notice the subcontractor is relieved of their obligations to claim retainage and can just file the lien affidavit.

Preference and Priorities of Mechanic’s Preference and Priorities of Mechanic’s and Materialmen’s Liensand Materialmen’s Liens

• Mechanic’s liens are considered in place at the time of commencement of construction or provision of construction materials. Makes them high priority.

• Not the case for architects, engineers, landscape providers and demolition

providers.

• Commencement of construction should be apparent from inspection of the subject property.

• Most owners/general contractors will just file an affidavit of inception to set the date (often required by a lender)

• Mechanic’s liens are considered in place at the time of commencement of construction or provision of construction materials. Makes them high priority.

• Not the case for architects, engineers, landscape providers and demolition

providers.

• Commencement of construction should be apparent from inspection of the subject property.

• Most owners/general contractors will just file an affidavit of inception to set the date (often required by a lender)

Enforcement and Foreclosure on LiensEnforcement and Foreclosure on Liens

• Liens must be foreclosed on my court order.

• Lien holder can choose any part of the subject property to be sold separately.

• Suit to foreclose must be brought within 2 years after filing of the lien affidavit for non-residential.

• For residential, the suit must be brought within one year after a lien affidavit could have been filed or after one year after the original contract ended.

• Liens must be foreclosed on my court order.

• Lien holder can choose any part of the subject property to be sold separately.

• Suit to foreclose must be brought within 2 years after filing of the lien affidavit for non-residential.

• For residential, the suit must be brought within one year after a lien affidavit could have been filed or after one year after the original contract ended.

Attorney’s FeesAttorney’s Fees

• Court required to provide for attorneys fees as are equitable and just in any proceeding to foreclose a lien or to declare one invalid.

• So required to be discretionary!

• Court required to provide for attorneys fees as are equitable and just in any proceeding to foreclose a lien or to declare one invalid.

• So required to be discretionary!

Summary Motion to Remove LienSummary Motion to Remove Lien

• Property Code gives owners a summary procedure to remove an invalid or unenforceable lien.

• Expedited process within the framework of an existing lawsuit.

• Helps owners get rid of liens and transfer the property to bona fide purchasers or force prompt settlement with claimants.

• Property Code gives owners a summary procedure to remove an invalid or unenforceable lien.

• Expedited process within the framework of an existing lawsuit.

• Helps owners get rid of liens and transfer the property to bona fide purchasers or force prompt settlement with claimants.

Summary Motion to Remove LienSummary Motion to Remove Lien(cont.)(cont.)

• Motion must be verified and can have supporting affidavits.

• Can only be brought under the following conditions:

– Failure of the claimant to provide property notice;– The affidavit of lien was defective or not properly filed;– Notice of the filed affidavit was not provided;– The deadlines for perfecting a lien claim for retainage expired and the Owner paid all funds prior

to receiving any notice of retainage or perfection of lien;– All funds subject to the notice of claim or retainage have been paid into the registry of the Court;– The lien affidavit was filed on homestead property and did not comply with requirements of §

53.254; or– The claimant executed a valid and enforceable lien waiver or release;

• Motion must be verified and can have supporting affidavits.

• Can only be brought under the following conditions:

– Failure of the claimant to provide property notice;– The affidavit of lien was defective or not properly filed;– Notice of the filed affidavit was not provided;– The deadlines for perfecting a lien claim for retainage expired and the Owner paid all funds prior

to receiving any notice of retainage or perfection of lien;– All funds subject to the notice of claim or retainage have been paid into the registry of the Court;– The lien affidavit was filed on homestead property and did not comply with requirements of §

53.254; or– The claimant executed a valid and enforceable lien waiver or release;


• Can only be brought under the following conditions (cont.): – The deadlines for perfecting a lien claim for retainage expired and

the Owner paid all funds prior to receiving any notice of retainage or perfection of lien;

– All funds subject to the notice of claim or retainage have been paid into the registry of the Court;

– The lien affidavit was filed on homestead property and did not comply with requirements of § 53.254; or

– The claimant executed a valid and enforceable lien waiver or release;

• Can only be brought under the following conditions (cont.): – The deadlines for perfecting a lien claim for retainage expired and

the Owner paid all funds prior to receiving any notice of retainage or perfection of lien;

– All funds subject to the notice of claim or retainage have been paid into the registry of the Court;

– The lien affidavit was filed on homestead property and did not comply with requirements of § 53.254; or

– The claimant executed a valid and enforceable lien waiver or release;


• Burden on claimant to prove that notices and lien affidavit were furnished to the original contractor and owner.

• Burden on movant to show that lien is invalid under one of enumerated reasons.

• Court must decide promptly and either deny or grant and order lien removed.

• Burden on claimant to prove that notices and lien affidavit were furnished to the original contractor and owner.

• Burden on movant to show that lien is invalid under one of enumerated reasons.

• Court must decide promptly and either deny or grant and order lien removed.


• Cannot be appealed. But stay can be effected upon posting of bond.

• Effectively makes the prevailing party win the case as it may

be months or years before the lawsuit runs to completion.

• If lien removed, owner may still be ultimately liable but the subject property is free from any lien and transferable.

• Cannot be appealed. But stay can be effected upon posting of bond.

• Effectively makes the prevailing party win the case as it may

be months or years before the lawsuit runs to completion.

• If lien removed, owner may still be ultimately liable but the subject property is free from any lien and transferable.

Enforcement / Defense Practice TipsEnforcement / Defense Practice Tips

• Check/Double-check dates for notices and filings and when materials or labor was provided.

• Send notices to every party up the chain including lenders.

• Obtain key project information at the outset.

• Circle the 15th of every month on your calendar!

• Check/Double-check dates for notices and filings and when materials or labor was provided.

• Send notices to every party up the chain including lenders.

• Obtain key project information at the outset.

• Circle the 15th of every month on your calendar!

COMMUNICATIONSCOMMUNICATIONSMANAGEMENTMANAGEMENT

COMMUNICATIONSCOMMUNICATIONSMANAGEMENTMANAGEMENT

• Most Cases turn on E-mailMost Cases turn on E-mail

• Text messaging Text messaging

• Instant messagingInstant messaging

• Management by E-mailManagement by E-mail

• Massive Volumes of DataMassive Volumes of Data

• Deleting e-mail once a lawsuit isDeleting e-mail once a lawsuit is

filed can put you in jailfiled can put you in jail

• Most Cases turn on E-mailMost Cases turn on E-mail

• Text messaging Text messaging

• Instant messagingInstant messaging

• Management by E-mailManagement by E-mail

• Massive Volumes of DataMassive Volumes of Data

• Deleting e-mail once a lawsuit isDeleting e-mail once a lawsuit is

filed can put you in jailfiled can put you in jail

Communication IssuesCommunication Issues

• 1 page of a letter = about 30,000 bytes of information1 page of a letter = about 30,000 bytes of information

• 1 bankers box of documents = about 2,500 pages1 bankers box of documents = about 2,500 pages

• I gigabyte of data = 1,000,000,000 bytes of dataI gigabyte of data = 1,000,000,000 bytes of data

• Therefore:Therefore:• 1 gig = 1,000,000,000/30,0001 gig = 1,000,000,000/30,000

• = 34,000 pages of paper= 34,000 pages of paper

• = 34,000/2,500 = 13.5 boxes of documents= 34,000/2,500 = 13.5 boxes of documents

• 1 terabyte = 34,000 pages x 1,000 = 34,000,000 pages1 terabyte = 34,000 pages x 1,000 = 34,000,000 pages

• 1 page of a letter = about 30,000 bytes of information1 page of a letter = about 30,000 bytes of information

• 1 bankers box of documents = about 2,500 pages1 bankers box of documents = about 2,500 pages

• I gigabyte of data = 1,000,000,000 bytes of dataI gigabyte of data = 1,000,000,000 bytes of data

• Therefore:Therefore:• 1 gig = 1,000,000,000/30,0001 gig = 1,000,000,000/30,000

• = 34,000 pages of paper= 34,000 pages of paper

• = 34,000/2,500 = 13.5 boxes of documents= 34,000/2,500 = 13.5 boxes of documents

• 1 terabyte = 34,000 pages x 1,000 = 34,000,000 pages1 terabyte = 34,000 pages x 1,000 = 34,000,000 pages

Statistics about E-mailStatistics about E-mail

• Use Confirmatory Letters, if necessaryUse Confirmatory Letters, if necessary

• Write everything as if it would be publishedWrite everything as if it would be published

• Avoid use of e-mail as main communicationsAvoid use of e-mail as main communications

• Avoid use of Lessons LearnedAvoid use of Lessons Learned

• Never use of slang and cursewordsNever use of slang and cursewords

• Never slander another personNever slander another person

• Never send pornographyNever send pornography

• Use Confirmatory Letters, if necessaryUse Confirmatory Letters, if necessary

• Write everything as if it would be publishedWrite everything as if it would be published

• Avoid use of e-mail as main communicationsAvoid use of e-mail as main communications

• Avoid use of Lessons LearnedAvoid use of Lessons Learned

• Never use of slang and cursewordsNever use of slang and cursewords

• Never slander another personNever slander another person

• Never send pornographyNever send pornography

Communications ManagementCommunications Management

• GlibnessGlibness

• Composing when agitatedComposing when agitated

• Too much copyingToo much copying

• Loss of control (“grouping”, forward, reply all)Loss of control (“grouping”, forward, reply all)

• E-mails always thereE-mails always there

• Data VolumeData Volume

• Deemed sent from employerDeemed sent from employer

• Received – Who knows?Received – Who knows?

• GlibnessGlibness

• Composing when agitatedComposing when agitated

• Too much copyingToo much copying

• Loss of control (“grouping”, forward, reply all)Loss of control (“grouping”, forward, reply all)

• E-mails always thereE-mails always there

• Data VolumeData Volume

• Deemed sent from employerDeemed sent from employer

• Received – Who knows?Received – Who knows?

Problems with E-mailProblems with E-mail

• Minimize e-mail externallyMinimize e-mail externally

• Never criticizeNever criticize

• Not effective noticeNot effective notice

• Who is being copiedWho is being copied

• Official mattersOfficial matters

• Never "Never "stringstring" together e-mails" together e-mails

• May never be erasedMay never be erased

• Attach lettersAttach letters

• Minimize e-mail externallyMinimize e-mail externally

• Never criticizeNever criticize

• Not effective noticeNot effective notice

• Who is being copiedWho is being copied

• Official mattersOfficial matters

• Never "Never "stringstring" together e-mails" together e-mails

• May never be erasedMay never be erased

• Attach lettersAttach letters

E-mail ManagementE-mail Management

After a contractor was having problems due to late engineering, this internal e-mail was written by an engineer with the A/E:

After a contractor was having problems due to late engineering, this internal e-mail was written by an engineer with the A/E:

I am afraid that we have oversold our capabilities on this project to the owner.

Our engineering department simply cannot keep up with the contractor's needs. We can expect significant claims from the owner. And we should pay them all as far as I am concerned.

I am afraid that we have oversold our capabilities on this project to the owner.

Our engineering department simply cannot keep up with the contractor's needs. We can expect significant claims from the owner. And we should pay them all as far as I am concerned.


Email from an engineer to his supervisor about design problems uncovered during a peer review.

Email from an engineer to his supervisor about design problems uncovered during a peer review.

Jim:

There are some serious issues about the designs we

have been doing for the client. I only want to

discuss this with you on a confidential and secret

basis since I don't want this getting around.

Jim:

There are some serious issues about the designs we

have been doing for the client. I only want to

discuss this with you on a confidential and secret

basis since I don't want this getting around.


THE MECHANICS OF THE MECHANICS OF MECHANIC’S AND MECHANIC’S AND

MATERIALMEN’S LIENSMATERIALMEN’S LIENS

By Shannon A.S. QuadrosBy Shannon A.S. Quadros

©2014©2014By Shannon A.S. QuadrosBy Shannon A.S. Quadros

©2014©2014

CHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & AUGHTRYCHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & AUGHTRYCHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & AUGHTRYCHAMBERLAIN, HRDLICKA, WHITE, WILLIAMS & AUGHTRY

THE MECHANICS OF MECHANIC’S AND MATERIALMEN’S LIENS By Shannon A.S. Quadros ©2014 ©2014 By...

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