Two types of mechanic's liens under Texas law

CONSTITUTIONAL AND STATUTORY MECHANICS LIEN 

Texas law recognizes two possible types of mechanic's liens: (1) a constitutional lien and (2) a statutory lien. TEX. CONST. art. XVI, § 37; TEX. PROP. CODE ANN. 53.001 (West 2007). "[A] constitutional lien requires a person to be in privity of contract with the property owner."

Article XVI, Section 37 of the Texas Constitution provides,
Mechanics, artisans and material men, of every class, shall have a lien upon the buildings and articles made or repaired by them for the value of their labor done thereon, or material furnished therefor; and the Legislature shall provide by law for the speedy and efficient enforcement of said liens.
TEX. CONST. art. XVI, § 37.

Trinity Drywall Sys., LLC v. Toka Gen. Contrs., Ltd., 416 S.W.3d 201, 209 (Tex. App.-El Paso 2013, pet. filed); see Gibson v. Bostick Roofing & Sheet Metal Co., 148 S.W.3d 482, 493 (Tex. App.-El Paso 2004, no pet.). The same privity of contract with the property owner is required to establish a statutory lien that encumbers the owner's property. See TEX. PROP. CODE ANN. § 53.021(a)(2) (West Supp. 2013) (A person has a statutory lien if "the person labors . . . or furnishes the labor or materials under or by virtue of a contract with the owner or the owner's agent. . . ."); TEX. PROP. CODE ANN. § 53.001(7) (defining "Original Contractor" as "a person contracting with an owner either directly or through the owner's agent").

"[W]here the contract for labor, materials or construction is not made with the owner or his duly-authorized agent, a lien may not be fixed on his property." Gibson, 148 S.W.3d at 494; see 2811 Assocs., Ltd. v. Metroplex Lighting & Elec., 765 S.W.2d 851, 853 (Tex. App.-Dallas 1989, writ denied).

SOURCE: TEXARKANA COURT OF APPEALS - No. 06-14-00022-CV - DENCO CS CORPORATION v. BODY BAR - 9/26/2014 (the mechanic's lien affidavit was not filed until after
the sale of the property).

Smith's lien affidavit listed Bre Thorne as the owner of the property sought to be encumbered. Yet, there is no evidence in the record establishing that either Regency (who was the owner of the premises at the time the contract for improvements was entered) or Bre Thorne (the subsequent owner) contracted with Denco or that Body Bar was the agent of either at the time it entered into the contract for improvements or when Denco's additional charges supposedly accrued.

Because there was no evidence that Denco was in privity of contract with the owner of the premises, it was not entitled to a constitutional lien against Bre Thorne's fee interest in the property. "[I]f a lessee contracts for construction, the mechanic's lien attaches only to the leasehold interest, not to the fee interest of the lessor." Diversified Mortg. Investor v. Lloyd D. Blaylock Gen. Contractor, Inc., 576 S.W.2d 794, 805 (Tex. 1978); see Bannum, Inc. v. Mees, No. 07-12-00458-CV, 2014 WL 2918436, at **3-4 (Tex. App.-Amarillo Jun. 24, 2014, no pet. h.) (mem. op.); Terraces at Cedar Hill, L.L.C. v. Gartex Masonry & Supply, Inc., No. 05-10-00226-CV, 2011 WL 1050852, at *2 (Tex. App.-Dallas Mar. 24, 2011, pet. denied) (mem. op.). Thus, the affidavit laying claim to statutory and constitutional mechanic's liens—which were not limited to Body Bar's leasehold interest—did not validly encumber the property.[12] Because the liens were not perfected, Denco was not entitled to foreclosure.

PERFECTION OF LIEN

"A person who files an affidavit must send a copy of the affidavit by registered or certified mail to the owner or reputed owner . . . not later than the fifth day after the date the affidavit is filed with the county clerk." TEX. PROP. CODE ANN. § 53.055(a) (West 2007). "A party must comply with chapter 53 to perfect a lien under the statute." Addison Urban Dev. Partners, LLC v. Alan Ritchey Materials Co., LC, No. 05-13-00122-CV, 2014 WL 2946019, at *4 (Tex. App.-Dallas July 1, 2014, no pet. h.) (citing Morrell Masonry Supply, Inc. v. Lupe's Shenandoah Reserve, LLC, 363 S.W.3d 901 (Tex. App.-Beaumont 2012, no pet.); TEX. PROP. CODE ANN. § 53.051). 

Here, Denco admitted that it failed to comply with Section 53.055(a). However, substantial compliance with Chapter 53 is sufficient, and "[c]ases interpreting the mechanic's and materialman's lien statutes counsel against invalidating a lien on a purely technical basis." Id. (citing Ready Cable, Inc. v. RJP S. Comfort Homes, Inc., 295 S.W.3d 763, 765 (Tex. App.-Austin 2009, no pet.)).  

SOURCE: TEXARKANA COURT OF APPEALS - No. 06-14-00022-CV - DENCO CS CORPORATION v. BODY BAR - 9/26/2014

Notice to all: Lis Pendens - and bona fide purchaser defense

  

NOTICE OF LIS PENDENS AND ITS EFFECTS

 

During the pendency of an action involving enforcement of an encumbrance against real property, the party to the action who is seeking affirmative relief may file for record with the county clerk of each county where a part of the property is located a notice that the action is pending. TEX. PROP. CODE ANN. § 12.007(a) (West Supp. 2012).

 

A recorded lis pendens is notice to the world of its contents. Id. § 13.004(a) (West Supp. 2012). The purpose of lis pendens notice is twofold: (1) to protect the alleged rights of the party filing it to the property that is in dispute in the lawsuit, and (2) to put those interested in the property on notice of the lawsuit. Collins v. Tex Mall, L.P., 297 S.W.3d 409, 418 (Tex. App.-Fort Worth 2009, no pet.).

 

The doctrine of lis pendens is based on the public policy that there should be an end to litigation. Cherokee Water v. Advance Oil & Gas, 843 S.W.2d 132, 135 (Tex. App.-Texarkana 1992, writ denied). It accomplishes that policy by preventing alienations that would defeat the litigation and that would deprive the plaintiff of his relief by putting the property beyond the reach of the present action. Id. The doctrine does not void a conveyance of the property during pendency of the suit. Collins, 297 S.W.3d at 418. The interest of the grantor merely passes subject to the determination of the cause. Cherokee Water, 843 S.W.2d at 135.

A recorded lis pendens is notice to the world of its contents. See TEX. PROP. CODE ANN. § 13.004(a). The purpose of a lis pendens includes putting those interested in the property on notice of the lawsuit. See Collins, 297 S.W.3d at 418. Further, as a purchaser of real property, Brent is charged with knowledge of all facts appearing in the chain of title that would place a reasonably prudent person on inquiry as to the rights of other parties in the real property. See Noble Mortg., 340 S.W.3d at 76.

SOURCE: TYLER COURT OF APPEALS - No. 12-12-00029-CV – 1/31/2013

 

Here, the evidence showed that Charlie and Elaine filed and recorded a lis pendens, which stated that a suit was pending to declare a "security instrument" void. Afterwards, but before a judgment in the first suit had been rendered, Charlie and Elaine conveyed the real property to Brent. Because his parents filed a lis pendens before he purchased the real property, Brent had constructive knowledge of the first action involving the deed of trust lien, defeating his status as a bona fide purchaser for value. See id.; Madison, 39 S.W.3d at 606. Thus, Brent failed to raise a fact issue on his affirmative defense.