Texas laws protect contract workers, subcontractors and other parties in the construction industry. As someone in the industry, you know that working with such big amounts of money can cause serious trouble when there are problems with payment.

A mechanic’s lien is one way of ensuring that your finances stay protected. It is important to understand as much as possible before going for this option, though.

What is a mechanic’s lien?

The Balance answers questions you may have about filing a mechanic’s lien. First, what exactly is a mechanic’s lien? It is a legal claim against a property or home. You can use it when you have not received proper compensation for the improvements you made to the property in question.

First, you must provide a preliminary notice. In most states, you must provide this notice 20 days before you put on the lien. The notice must get to the lender, general contractor and owner of the property.

What are common questions about mechanic’s liens?

Is there a right time to file a lien, then? It varies from situation to situation. Different jurisdictions regulate mechanic’s liens in their own ways, so you need to contact a local attorney to see when your time limit is.

Is only one person held responsible? Not usually in the case of multi-family properties. There, every owner holds responsibility for a part of the claim. Otherwise, the sole property owner holds responsibility.

Finally, are there any limitations or costs that you can include? Once more, this varies depending on where you live. Sometimes, you cannot recover profit. Other times, you can even recover the cost for tools and rental equipment. Again, it is crucial to see your local attorney to learn more about laws in your exact jurisdiction.