Home>Levelset Community>Legal Help>Do we file a lien on the retainage amount? We are finding that our customer is holding the retainage out of each invoice. It was our understanding that the retainage letter covered us so that we would not have to file a lien on just retainage.

Do we file a lien on the retainage amount? We are finding that our customer is holding the retainage out of each invoice. It was our understanding that the retainage letter covered us so that we would not have to file a lien on just retainage.

TexasMechanics Lien Retainage

1. Do we file a lien on the retainage amount? We are finding that our customer is holding the retainage out of each invoice. It was our understanding that the retainage letter covered us so that we would not have to file a lien on just retainage 2. Do we file a lien at the end of the 4th month per invoice or at the end of the job stacking all of the invoices for that whole job?

1 reply

Feb 26, 2019

Good question. First and foremost - I should note that I'm not able to provide you with advice, and every business must decide how to proceed based on their own particular circumstances. But, with that in mind, I am able to provide some relevant information that might be helpful when deciding on how best to proceed. First, whether or not a claimant will file a lien on retainage could depend on any number of things - how quickly (or slowly) payments are coming, the relationships and/or history between parties on the job, the reputations of the partes involved...the list goes on and on. However, the fact that retainage is being used on a project, in and of itself, does not typically ignite a payment dispute leading to a mechanics lien. For better or for worse, the use of retainage is an extremely common practice in the construction industry - and sending a retainage notice at the start of the job does not prevent the use of retainage. Rather, it preserves the right to later file a mechanics lien on retainage amounts if that becomes necessary to obtain those funds. By sending a retainage notice, a claimant notifies other parties on the job that retainage is being withheld from every invoice, and it alleviates the claimant's need to send monthly notices based on those amounts that will be retained throughout the life of the project. But, if retainage is not timely released or if there is a dispute as to what's owed, a claimant could certainly find themselves in a situation where they feel the need to file a mechanics lien based on amounts retained. For the second question, again - a mechanics lien won't always be appropriate, but when a potential claimant is owed and unpaid and the deadline to file is fast approaching, filing a lien may be appropriate. Regarding what amounts would be included in the lien claim - generally, any amounts owed and unpaid could be subject to lien. In order to preserve the right to lien for a given amount, of course, it's important to first send monthly notices on those amounts (if notice is required). But, at the time a lien is filed, it's entirely possible (if not common) for a lien filing to contain amounts that are owed which span multiple invoices. Here are a few resources that should be helpful: (1) Texas Lien & Notice FAQs; (2) What is a Monthly Notice?; (3) Texas Has Monthly Notices - Are Monthly Claims Required as Well? (No).

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