Fraudulent mechanic liens filed against my properties in Texas - need help to remove liens or file suit.

Asked about 2 years ago - San Antonio, TX

I have 2 fraudulent mechanic liens filed by a realtor in Texas against 2 properties I have in San Antonio. The realtor makes ridiculous claims about I owe him general contractor fee and unpaid invoices, etc, which I have never agree to or sign any contract. He did this top stop the sale of one property to "claim" his realtor's commission.

Any attorney can help me remove the liens? Can I sue to recover the attorney fee
via his broker's E&O insurance?

Please help.

Attorney answers (4)

  1. T. Rick Frazier

    Contributor Level 5

    Answered . By the nature of your question, I assume the properties are not used or intended to be used by you as owner as your dwelling. If this is not the case, and these are only investment properties, they are considered to be commercial properties. The mechanic's lien laws are much less stringent when dealing with commercial properties. Nevertheless, it would appear the realtor may have some real problems.

    First, there is no provisions under Texas law giving rise to a mechanic's lien for real estate commissions. The claimant must have performed labor and/or supplied materials to be entitled to any type of mechanic's lien whatsoever. You referred to a "general contractor fee". If he actually acted as a general contractor in coordinating work on your properties, this could give rise to legitimate mechanic's lien claim. You do not necessarily have to have a written contract to give rise to a valid mechanic's lien claim. I really would need to know more details about the nature of his claim.

    If he filed a lien affidavit claiming to have supplied actual labor and/or materials but in reality is trying to coerce you into paying him a broker's commission, he may have serious problems.

    The Texas Civil Practice & Remedies Code §12.001, provides serious penalties for fraudulently filing a document ($10,000.00 or actual damages whichever is greater, court costs, attorney's fees and potentially exemplary damages)

    Additionally,the Texas Property Code §53.160 also provides a streamlined procedure to remove invalid lien claims under certain circumstances and also allows for attorney's fees and costs.

    If you actually lose a potential sale of a property because of a fraudulent claim, you have a claim against him for "slander of title" wherein you could recover the loss of your profit from the sale.

    Finally, since I assume he is a licensed broker, I would suggest you contact the Texas Real Estate Commission and file a complaint, especially if he is trying to use the mechanic's lien claim to force you to pay a real estate commission. The Texas Real Estate Commission can take action that may suspend his license.

    You may have significant claims, but I certainly suggest you retain an attorney with experience in this area. Please go to my website at www.trflienlawyer.com where I provide more detailed information concerning mechanic's lien claims. I hope this helps you. Good luck!

  2. Teri A. Walter

    Contributor Level 19

    Answered . You can certainly sue to have a fraudulent lien removed from your property, and can recover your actual damages, attorneys' fees and court costs, under Chapter 12, Civil Practice and Remedies Code. You'll want to find a trial lawyer in your area to do this.

    However, I doubt that the broker's insurance will cover the claim (though it may cover his defense costs). Fraud is an intentional act, and the insurance policy will most likely only covers for negligent acts. (Something to remember when the petition is prepared.) Good Luck!

  3. Brian W. Erikson

    Pro

    Contributor Level 18

    Answered . It may be that the realtor is filing a lien under the provisions of Chapter 62 of the Texas Property Code. You can review Chapter 62, Broker's and Appraiser's Lien on Commercial Real Estate, at the following web address:

    http://www.statutes.legis.state.tx.us/DocViewer...

    Or, you can Google Texas Property Code Chapter 62 and follow the links.

    Review Chapter 62 to see if your situation would qualify the realtor for a broker's lien. If not, and the realtor really is claiming a contractor's mechanic's lien under Chapter 53 of the Texas Property Code, you can address the matter as follows.

    If the renovation is for a house that you claim to be your homestead, it may be that the realtor is barred by the Texas Constitution and Chapter 53 of the Texas Property Code from asserting a valid lien. For the house to be your homestead, the house must be in your name and you must live there. If so, for a contractor to be entitled to file a valid mechanic's lien on the homestead, he would have to comply with Chapter 53 of the Texas Property Code. Among the requirements are a written contract signed by the owners of the homestead (husband and wife), certain homestead warnings, and filing of the contract with the county clerk. Those formalities do not usually happen. Without them, any attempted mechanic's lien filing would be invalid.

    When the realtor filed his liens, the realtor was required to provide you with notice of lien filing within five days of the filing by certified mail. If you did not receive notice by certified mail, or the realtor did not mail the notice within five days, the liens could be invalid on that basis. Make sure that you keep the envelopes for the certified mailing so that you can determine whether notice of lien filing was timely mailed.

    If the realtor did not properly perfect a homestead mechanic's lien contract, and one of your properties is indeed your homestead, you should write a letter by certified mail to demand that the lien be released, pointing out that the property is your homestead, and why the realtor has not perfected a homestead mechanic's lien. If the realtor failed to provide the notice of lien filing within five days, you should list that as the reason why the lien is invalid. If the realtor undertook on construction work, but still claims a Chapter 53 mechanic's lien, then that could be the reason why the lien is invalid. If the realtor does not voluntarily release the lien, he could be liable for a fraudulent lien under Chapter 12 of the Texas Civil Practice & Remedies Code. Chapter 12 can award damages of $10,000 or actual damages whichever is greater, plus attorney's fees.

    You can also demand that the lien be released under Section 53.160 of the Texas Property Code, which provides for a summary procedure (no trial necessary) for the removal of an invalid lien on someone's homestead or for a lack of lien filing notice or for the other reasons listed in that section.

    I have a lot of mechanic's lien materials (the law, notice forms, deadline charts, etc.) at my web site, The Construction Report. The web address for The Construction Report is:

    http://www.theconstructionreport.org

    Bottom line, retain a construction attorney to evaluate your situation and to advise you as how to best proceed.

    Good luck.

    Hope this helps. If you think this post was helpful, please check the best answer tab below and/or designate my answer as the best answer. Thanks.

  4. Marc A. Young

    Contributor Level 3

    Answered . Your issue is very fact sensitive. You may be able to obtain a recovery of attorneys fees from the broker's E & O carrier assuming he has coverage and there is no unusual exclusion in the policy. It is correct that claiming the lien to be fraudulent would probably provide the carrier with a reasonable basis to deny the claim. However, if the broker had a good faith belief to his right to file the mechanics lien but was simply wrong and the Judge removes the lien, there is a very good probability of a recovery for your attorneys fees and costs.

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