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What are your rights when a construction client won’t pay?

On Behalf of | Aug 11, 2022 | Business Law

Construction is a dangerous but potentially profitable industry. You have safety risks for any workers that you employ, ranging from the possibility of them falling off of a roof to the ever-present risk of electrocution. As a business owner, the most pressing issues you will have to address may not be cave-ins at a trench but rather clients that don’t pay what they owe after you finish the work.

There’s nothing more frustrating than investing hundreds of man hours and thousands of dollars and materials in a project, only to have a client inexplicably delay payment on your final invoice.

What options do you have as a construction company or contractor in Texas dealing with a non-paying client?

The property where you worked can serve as collateral

Thanks to existing laws in Texas, construction professionals and material providers have rights that many other businesses would not have. You can file paperwork requesting only against the title of the property where you performed the work. Provided that you have documentation of your contract with the client and of the work you performed, you can potentially convince the courts to grant you a mechanic’s lien.

That lien will serve as a preventative measure. The homeowner will not be able to sell the property or even refinance it without paying off the lien by making payment in full to your company. Although you may worry about the practical implications of taking a client to court, securing the mechanic’s lien should not do much damage to your overall reputation or prevent you from getting more clients.

After all, provided that people pay for the work that they receive, they won’t have to worry about any sort of liability. Those who do not follow through on their obligations to your company and deserve to be held accountable for their misconduct.

Getting a lien isn’t always quick and easy

Despite what some internet-based companies might lead you to believe, securing a mechanics lien is far from just a procedural matter. You need financial documentation and to handle everything in a timely and appropriate manner in compliance with Texas state laws.

Learning more about mechanics liens and other legal protections for construction companies can help you recoup your investment in the project when a client doesn’t fulfill their financial obligations.