Civil laws in Texas help protect the rights of businesses under a variety of circumstances. Companies seeking to be competitive in service of others’ operations often have to get creative about how they approach their business models. Additionally, they need to work to maintain a positive relationship with the other companies that rely on them.
For example, many vendors and suppliers working with businesses in the construction industry have agreements that allow for delayed invoice payment. The property owners who hire construction companies typically do not pay for the full value of a project before its completion. Therefore, the construction companies managing projects usually need to try to spread out or reduce their immediate operating expenses for a project.
One of the ways they achieve this goal is through negotiating delayed payment with vendors. Unfortunately, sometimes businesses do not fulfill their obligations and fail to pay for the supplies they have utilized in a construction project. Texas law actually provides a legal option for an unpaid material provider other than a breach of contract lawsuit against the other business.
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Companies can seek a materialman’s lien
Texas law is relatively protective of companies and acknowledges a variety of circumstances in which a business may need to take action against a property owner. Those circumstances include scenarios in which a company contracted for a construction project fails to pay invoices in full.
The state specifically allows for mechanics, contractors and materialmen, or those up provide actual supplies for a project, to seek a lien on a property after the completion of a project. A materialman’s lien is effectively the same thing as a mechanic’s lien. It prevents a property owner from transferring their interest in the property or even refinancing the property without first resolving the outstanding lien.
Although technically the vendor may have a claim against the construction company, the owner is responsible for the non-payment because they hired the company to do that work. The property owner would then potentially be in a position to hold the contractor that failed to pay the supplier responsible for the resulting materialman’s lien.
Making sense of the laws in place to protect businesses contributing to construction projects in Texas can help those frustrated by non-payment pursue an effective resolution. Seeking legal guidance is a good way to achieve clarity in this regard.
