Texas Lien Law 101: How to Get Paid for Texas Work Next Week
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Texas Lien Law 101: How to Get Paid for Texas Work Next Week

Right. Welcome to today’s webinar. Thank you everybody
for taking some time out of your day to join me today. Today we’re going to be going over
Texas lien law 101, and how to get paid for Texas work next week. Texas is one of those
tricky, tricky States. So Texas unlike other States, has these monthly notice requirements
that’s subcontractors and other lower tier parties must send in order to retain lien
rights. We have a lot of people here tuned in live today and I also want to just make
a quick note that when we do host these webinars sessions, we do record them and send them
out to anyone who has registered. So if you, you know, if you have to duck out early today,
no worries, you’ll get the the remainder of the webinar sent to you via email. You can
also share the recording of the webinar with anybody else in your office or any of your
friends you think might be interested in learning more about Texas lien law. Okay. I’m Jim. I’m an education expert here
at Levelset and you’ll have my contact information as well in case you ever need to reach out
to me. What I do here is I help folks like you take the stress out of payment and make
sure that they don’t lose a night’s sleep over getting paid. So I work with contractors
throughout the, throughout the country to roll out, Levelset in a noticing process in
order to, A, mitigate financial risk and B, speed up their time to payment. Just a quick
note about the webinar here. We’re using zoom webinar and this is a recent change for us
here. So we’re switching over from a different system. So I’m going to leave some time at
the ends for Q & A. But feel free to submit any questions you might have throughout the
call via the Q and a button on the zoom control panel and I’ll answer them at the end or if
I have time to and it allows, I will try to try to answer them as I go along. Please, please, please do not be shy. Chances
are if you’re facing a question, are there folks on the line probably are as well. You
know, seeing as this is a Texas lien law 101 class and how to get paid for Texas work next
week. I’m guessing that’s different folks may be facing certain payment issues here,
so we’ll try to, we’ll try to address those. And again, I’ll be saving time at the end
to answer any questions you may have. So you should be able to there should be a poll popped
up right here on your end. I’d like to know you know, what brought you here today. Are
you worried about one job? Do you have a lot of aging invoices that you want to collect
on or are you looking just for general information on Texas lien law? It looks like, you know, just about everyone
is sending emails and making phone calls. That can be super, super time consuming, especially
if you have a lot of AR aging. The other thing I want to, Mmm mention is only about 47% of
you are less than half are sending Texas lien law notices. So for the people that are already
doing that, that’s great. These can be very, very effective in terms of a prompting payment
and securing lien rights. So for the 41% of folks that are filing liens in most cases,
folks need to send those Texas monthly notices prior to being able to file a lien. And also
sending these notices is much, much cheaper than engaging a collections agency or hiring
attorneys, which is what about 35% of y’all are currently doing. So I’d like to know also
just will, it’ll help me gauge exactly what type of notices y’all will need to be sending. I want to know what your typical role on a
construction project is. So it looks like most of y’all are, I’m just looking for general
information today and about a quarter of you are looking to get more general information
and this is exactly what we’re going to be covering today. We’re going to be covering
at a broad overview, a general information about Texas lien law. And then we’ll get into
specifics on how to collect on some of those aging invoices. I do see that some folks do
have some questions. I will get to those at the end. So today’s agenda, I’m going to go
over at a high level. Why have construction payment issues arise? We’ll go into, then
we’ll transition into the basics of Texas lien law, and then we’ll talk about how to
use level-set to what are the right documents in order to get paid. So really the con, the construction industry
is unlike any other industry. So just, just think about, you know, when you’re, when you’re
grocery shopping or you’re shopping for clothing or anything else, really, you’re not, you’re
paying for those services and those goods up front rather than the construction industry
where a lot of times you have to provide those services and goods prior to being paid. Right.
so I’m pretty sure some, or all of you might be pretty familiar with the ins and outs here.
So I’m just going to touch briefly on here. Construction is a little bit different and
it’s because of the complex hiring structure here that can create a game of telephone.
So it’s really because the, the more parties that are involved, they’re going to equal
more risk. And any issue that appears on the payment chain or any issue that happens at
any level of this payment chain can cause big problems for everybody involved. So because of the hiring complex structure
payment can get held up anywhere along this chain. And as the prog, as the project progresses,
you may not be getting paid quickly if you’re waiting on someone else to pay you. Like if
you have a pay when paid clause or to pay your customer and then your to pay you. Many,
many parties on the job are not interacting directly with the people controlling the payment,
like the property owner and, and the GC. Most folks are, you know, dealing with at least
the GC or a sub tier. So even on simple projects though, I’d like to touch, touch on this.
Even if you’re working directly with the property owner, for instance, maybe you’re a restoration
company or you’re a general contractor, even in these cases payment can still be slow and
stressful. And that is also because, you know, you may
be waiting on a third party, like an insurance company or a lender to finance the job. So
you’re waiting for other folks to release money. You may have you also may have put
in money up front and now you’re waiting on someone else who may not care very much about
whether you’re paid quickly or not. Okay. And the people that are the ones controlling
payment, you’re waiting on them to process your writ to process your check. So that’s,
that’s where really the risk comes in. You know, it’s not their money that they’re really
worried about. It’s your money. And when you’re working with new customers and property owners
all the time, you may not know how things are going to play out. So even on simple,
simple construction projects where you’re working, you know, where they’re relatively,
not a whole lot of parties involved, problems can still arise. So I have another poll here. I’d like to know
what your average age, what’s your average day to payment is. So most of y’all are waiting
between 30 and 60 days for payment, some in the 60 to 90 day range and some of you have
it, have it down Pat to when you’re getting paid with it in less than 30 days. And that,
that’s really, really great. So it can be really, really difficult to get paid on construction.
Like I said before, construction is one of those industries where you know, you’re providing
the work upfront without necessarily getting paid for that upfront. And in 2018 over 46%
of companies in the construction industry said they had to use a credit line to cover
slow payments. That’s because companies in on average wait an average of 83 days for
payment. And that’s across the entire United States.
So as, as you can see if 40, almost half of all companies are using a credit line, that
that’s indicating that there’s some serious cash flow issues not just with individual
companies but across the whole construction industry in general and using level-set and
sending these required and even voluntary notices can really reduce that time greatly
down from, you know, the average of 83 days to hopefully, you know, get to that 2% of
respondents on today’s call where they’re getting paid within 30 days or less. So we
really want to well at Levelset we have this method called the set method and it’s about
being proactive and establishing open lines of communication at the, of a job so that
way you don’t run into these unfavorable outcomes like having to take out a credit line or having
to file a mechanic’s lien on a job. So payment can be held up for all sorts of reasons. The
list goes on and on and on. These are just, these are just a few of them here. You know,
everybody’s, everybody here has probably dealt with either slow pay because if a pay when
paid cause or a dispute up the payment chain or maybe somebody had a dispute on, you know,
workmanship from someone else that wasn’t involved with your company. There’s many,
many reasons why they can be held up. And I already asked this poll, so we’re just
gonna keep on hammering through this. So this is, these numbers are pretty pretty staggering
right here. So this is, this is a, this is an average. So the average profit margin in
the construction industry in general is right around 6.2%. So if you have a 6% profit margin,
you’ll need an additional $417,000 of revenue to make up for 25 K in bad debt. So really
if you’re getting, if you’re missing out on $25,000 in bad and $25,000 on a, on a job,
and you are one of those firms or companies that operates around 6% you know, that’s gonna,
that’s gonna be a large Oh, large amount of jobs that you’re going to need to complete
in order to make up for that lost revenue. So this, this is why so many so many construction
businesses go under construction businesses and restaurants are really, really similar
in the fact that a lot of them fail within the first three years. So it’s, it’s really important if you are
one of those small businesses and you’re thinking that you need to, you know, take out lines
of credit that you might want to think about being a little bit more proactive with Mmm.
With your noticing policy. So today we’re going to go over, just right now, we’re going
to jump right into the basics of Texas lien law. Texas is unlike other States. It has
really, really complicated deadlines and requirements. And these, these deadlines and requirements
are very, very specific to the project type. Your role on the job and your customer’s role
on the job. So for for instance ah, most States require a document called the preliminary
notice be sent at the beginning of a job in order to secure lien rights. Texas requires
these recurring monthly notices based on your, your role and the project type and the role
of your customer in order to retain lien rights. And really these are notices of nonpayment.
Some people call them notices of intent. They go out in the second and third month. So Texas,
the first step though is sending a preliminary notice before the monthly notice. And really
what this preliminary notice does, what are what our customers who have adopted this method
have found is they were sending between, you know, 30 and 60 monthly notices a month until
they started sending prelims or there are also noted as notices of contractual retain
age or requests for information. These can be sent at the start of the job and can really,
really help you reduce the amount of monthly notices and speed up your time to payment.
At levelset because of the complexity of preliminary notices in Texas, in Texas, we combine them
all into one deadline and one mailed notice. The most critical is the 15th day of the second
month after labor and or materials are first delivered, but it’s best practice to send
these right away as you will be as you’ll get more coverage. Really the if you’re fabricating
specialty materials, that’s going to be a really, really important document for you
in the state of Texas. But in general, even if it’s not a required document for you, it’s
still a really great way to ensure that everybody is on the same page. And you’re opening up
friendly lines of communication to other parties that are on the job that have an interest
in keeping the job lien free. This is a quick example of a, the statutory, the statutory
or required language on the preliminary notices that we send for our Texas customers. We also,
this is the, this is the cover page. So we, I designed these to be informative and friendly
in tone so that way you know, it’s, there’s not as much negative feedback from, from document
recipients when they received these. So it’s always a good idea if you’re going
to roll out a noticing process to let folks know or if you’re working with somebody new
for the first time, just let them know, give them a heads up that they will be receiving
one of these documents. And it is our standard policy and it is required by Texas law and
we just want to really keep the whole job transparent. That helps helping explain it
to the customer in those terms is a really good way to manage that customer relationship
and avoid any type of confusion. So step two in Texas is going to be sending monthly notices.
So monthly notices. The way the statute written is these are required to be sent for any month
in which work was performed and unpaid. These notices go by a ton of different names. Some
folks call them fun trapping notices. Other people call them first and second notices
or second and third month notices. Some people call them notices of intent, which are a little
bit of a misnomer because a notice of intent in Texas is actually considered a voluntary
document and it doesn’t meet the statutory requirements for the first and second notices.
The reason why some folks call these fun trapping notices is because these notices not only
work to secure subcontractors, lien rights in the state of Texas, the ability to later
file a mechanic’s lien, but it also allows the property owner or any type of party financing
the job to withhold that amount of money from the GC until that payment dispute is resolved.
So these are typically sent between two and three months after you’ve furnished labor
and, or materials and were unpaid and it’s going to be sent two to three months depending
on you’re your role on the job. So whether you’re a subcontractor, sub, sub
material, supplier, et cetera, and really who your customer is. So if you’re a material
supplier hired by the property owner, that’s much different than a material supplier hired
by the GC or hired by a subcontractor, they’ll all have different requirements. No worries,
Levelset, the Levelset software takes in, takes all those factors into consideration
when we calculate a deadline for you. So the deadline to send these is always by the 15th
of the month. The only time it’s not due by the 15th of the month is if the 15th falls
on a holiday or a weekend in the case where the 15th falls on a holiday or a weekend,
it will be the business day prior and just black and white. If you don’t send these documents,
you do lose lien rights. So these are, I’m in very, very important documents to send,
especially given the fact that they are sent two to three months after you’ve performed
work and you’re still unpaid. That’s already a sign of slow payment or payment
issues to come. So the ability to, so sending these like secures your right to later file
a lien on the job and possibly foreclose on that. On that piece of property to S to recoup
your money. But typically because you send these, most GCs and even larger subcontractors
will prioritize who they pay first on jobs based on who has lien rights. So based on
who they’ve received these notices from, so you’re going to send these monthly notices
if you’re waiting on payment. So for example, if if your, if your work was done in the month
of January, the second month notice if you have one do is going to be due by the 15th
of March. And the third month notice if you have one do is going to be due by the third,
by the 15th of April. And we’ll go into which, which roles require
second month notices versus third month notices here in just a moment. So these are, like
I said before we have two types of private jobs, residential and commercial. And then
we have state County over here. So this is based on your project here and the type of
project and even who your customer is, is going to determine which documents you need
to set. So if you’re if you’re on a residential job and you’re hired directly by the property
owner you’re a GC or prime contractor, there’s no notice required on any of these jobs. If
you’re a first tier subcontractor, meaning you were hired directly by the GC on residential
projects, you have to send a second month notice certified to both the owner and the
general contractor and oops. And if you are a second tier sub, meaning
you did not contract directly with the GC or the property owner, you have to also send
a second month notice to the GC and the owner. Yeah. Mmm. For commercial jobs. And the deadline
for filing a mechanics lien, I’ll get into that here in a moment, but it’ll basically
be the month after those notices are due. Commercial jobs. If you are a first year sub,
you only have a three month notice. If you are a second tier sub or anybody further down
the payment chain, meaning you didn’t contract directly with the GC or the property owner,
then you must send a second month notice certified to the GC. And you also must send a notice
the following month to the owner and the GC. This is going to be the, the commercial jobs
are gonna. Public jobs are going to follow the same requirements as commercial jobs.
Yeah. So if you’re still unpaid for the month of
September or October you may have a deadline coming up. So if you have a third month, if
you are, if we back up a second, if you are in this category right here, first tier subcontractors,
you’re going to have your third month notice due next Friday the 13th. If you have any,
if you have a second month notice due at all. So any one of those categories where that
may apply, your second month notice will be due on 1213 and the third month notice will
be due on one 15. These are going to be due next Friday. And if you send them through
levelset, be sure to order them really, really quickly. Do not wait until the last minute
like the day before or even two days before to order them. We’ll need to get, we’ll need
to get those. You’ll need to get those in our system by
Monday at the latest in order for those to be sent. And you’ll still probably want to
rush those as well. So this is an example of what one of our monthly notices look like.
The important pieces of information to have here are the month for which somebody is receiving
this notice. We’re going to also put the amount of money that is owed for that particular
month along with the total amount of the, the total amount due to the claim and to date
or whoever’s sending the notice. This is all statutory or required language. And this is
why I explained that the notice of intent to lien is a misnomer. If you’re using level
set to send this document, really important. If you want to send a monthly notice that
you order it through the preliminary notice screen rather than the notice of intent to
lien screen. And I can get into that here in a, in a little
bit when, when we wrap up with the slides. So these are, these are pretty tricky. As
you’ll, as you can tell, you know, if you haven’t been paid for a few months these documents
might not be they’re not the friendliest of documents. I’ll say it that way is a hybrid
between a preliminary notice. So providing information and requesting information. And
it’s also a hybrid between a notice of intent to lien cause there is verbiage in there that
lets the property owner know that they could be liened if they don’t, if you’re not paid.
So it’s really important just to manage customer relationships so that way we’re not, you know,
putting our business in jeopardy and we’re not putting future jobs in jeopardy. Did you
just let them know that they’re going to receive that notice? And that notice is required by Texas law.
And it also, it’s, you know, it’s, it’s for our benefit. But receiving this notice is
also for your benefit too because we’re, you know, we’re being transparent about what’s
going on on the job. And this isn’t, this isn’t anything personal. It’s just our standard
policy. We need to comply with Texas law and we really need to make sure we get, we get
payments so that we can pay, pay the people we owe money to as well our suppliers and
subs. So you want to really make sure you get in the habit of sending these every month
because Mmm. There’s so much at stake for not sending these, you could lose out on the
ability to later file a lien and then that can become much more costly in terms of hiring
an attorney and, and filing a lawsuit. In general, those are, those are really, really
expensive and oftentimes both parties walk away, not, not very satisfied. So if your
work is being done in January, you want to make sure you’re invoicing for January. All
right? And there’s a couple of different reasons why a invoicing in general in the month that
the job occurred. It’s just good practice because you’re going to be you know, submitting
things every single month and making sure you’re getting paid on a regular schedule,
making sure the cashflow on in your business is consistent. The other reason why you want
to make sure you add the invoices for the month that you worked in is because the the
way our system works is we take your invoice date that you add to levelset to calculate
when your monthly notice deadline is. So if you are this is another graphic that’ll show
you that breaks down the second month and third month requirement based on when work
was done here. So this is just, this just highlights the, you know, in order to really
be fully protected, this needs to be like a routine and this has to be systematic in
order for it to be effective. So last resort documents are what we call
mechanical liens and bond claims. So in general, liens are due by the fourth calendar month
after the last day of the last month in which labor was performed or materials were furnished.
And that deadline gets shortened to the third month if the job is residential. Okay. Bond
claims are due within 90 days from final completion of the job. And those are generally going
to B claims were it was a state funded project or a state owned own job. So you’ll see here,
you know, if you worked, if your last month was, you know, any of these three right here,
if you are residential and nonresidential or a stateliness highlights when you need
to actually send those those documents by and they need to be filed by that date. So
again, if you’re using level-set please, please keep that in mind. In terms of our processing time, our standard
processing time is two to five business days and that refers to the amount of time it takes
our software to generate the document, our research team to research it. And then for
us to mail it out, we have no control over, over how long it takes the County to record
these documents. Although most counties in Texas do allow us to electronically record,
which shortens the amount of time most folks have to wait. So we’ll go into how to use
levelset to order the right documents and get paid. So this is the job I created in
one of my test accounts here. Oops. Yeah. So one thing I want to highlight is
levelset takes the state that the job took place in your role, your customer’s role in
the job type. So what you know, which documents you need to send. And then for monthly notices
we can add invoices and our system will tell you when you need to send those documents
by in order to retain lien rights. Okay. This makes remaining visible on a job and promoting
jobs, job transparency, really easy. It also makes it really easy to exchange the right
documents at the right time to the right people, which is vital. Now I just want to really
quickly before I go into this, I just want to show you what happens when I change this
to seven zero one, one nine, which is a zip code in new Orleans. So as you’ll notice,
the deadlines changed. So we’re taking that into account. All of
those factors right there to let you know what particular documents need to be sent.
It changes back to a Houston zip. And again, that changes my monthly notices here. So what
these month, the way you order these monthly notices is simply by selecting create document
and the way I was able to Mmm. Make sure those deadlines appeared in my milestone section
was by adding an invoice. So if I just add another invoice for the month of November.
Okay. I do see some folks have some really great questions and I will get to those at
the end. We’re almost there, here. So just another couple of minutes folks. So these
non-residential monthly notice is going to be due and if I select learn more, it’ll let
me know that this is based on the invoice for those particular months and this is my
most pressing deadline. Whereas if I scroll down, I’ll see, okay. For September invoices
I have this particular notice due in eight days. For October invoices, I have that same
notice that’s going to be doing 41 days. And for the November invoice I just added, that
particular notice is going to be due in 71 days. So if I, you know, Mark any of those
as paid, it should dismiss those deadlines for me. And it’s really important that if you’re using
levelset to send these notices that you do Mark your invoices as paid. So there’s no
confusion about any type of upcoming deadline and your customers don’t receive a dev, don’t
receive a monthly notice for a bill that they already paid. So again, I’m just going to
add one of these as Mark. That guy is paid here, I’m paid and I’ll show you how easy
it is to quickly order one of these documents. So I just select, create, document all the
invoice information already pulled over. So like next, this is the preview again of what
the document looks like. It’s the same document that we looked at a few moments ago. If you
are a subscriber, most subscribers do have access to property owner research. So we’ll
click, I don’t have that information. If you’re not a subscriber, you can always enter that
information in right there as well. Another way that a levelset, make sure that
your documents are sent to the correct parties. So again, this is the, this is our processing
time and I mentioned this a little bit earlier. Mmm. Our standard processing time is two to
five business days with everybody in the state of Texas. I’m having the same exact deadline.
If you’re going to order these, these documents you know, really anytime after today, it’s
going to be really important to, to rush them. If you’re a subscriber, some of your, some
of your plans might include rushing these documents for free. Most folks do have to
pay an additional fee in order to get that bumped up in the research queue and processing
queue for us. But once we, once we select create document that sends this document to
our research team, we’ll process it and send it out as soon as we can and I am just going
to cancel this order so that way nothing gets sent out. That shouldn’t be. So we do, I’m just going
to jump back in into a few more slides before we wrap up for today. So we can, you can use
levelset to take all that off your plate. If you’re sending tons of different notices,
it’s going to be really, really difficult to track that on a spreadsheet or track that
manually. It’s really simple as you saw to just add a job and to add an invoice to make
sure that your meeting, meeting those specific deadlines and you’re tracking those deadlines.
We take the mailing right out of your hands too. If you’re currently in the, in the habit
of sending monthly notices and you’re not using us, that means you’re probably, you
know, rushing down to the post office on notice day last minute to get those in the mail.
We also you’re also able to simply download reports to kind of get a macro view of all
your jobs and to evaluate your current noticing process and also to evaluate your customer
relationships. And if you really want to take it all off your plate, we do offer automation
for Texas monthly notice control. And we also offer data importing for projects and invoices.
So that way you don’t have to manually enter anything into level set and you just send
us a file and the account basically runs in the background. So the monthly notice control
add on what it does is it takes any job that you have an upcoming monthly notice due for
and it places it in a list. It’ll basically get, it’ll get researched
and it’ll basically sit in that list until 10:00 AM on notice day. So you have until
10:00 AM on notice day to pull that from, from your list and cancel it at that, at that
time, we send them out right from there. So this allows you to a, not only manage all
your deadlines really easily, but it also allows you a lot of control over which documents
go out. Whereas, you know, with any, if you don’t have monthly notice control, we’re just
processing. The monthly notice as a standard document this add on allows us to allow you
to manage the mailing as well. So you can cancel it anytime up until 10:00 AM on notice
day. We also have other ways besides custom spreadsheet
imports to integrate integrate project and invoice information. We have integrations
with QuickBooks online, QuickBooks desktop. We also allow customers to do, do it themselves
imports and they can, anybody can also work with us in order to build a custom import.
So I just want to go over one more time. We have a second month notices for unpaid second
month notices for unpaid October invoices and third month notices for unpaid September
invoices. Liens may be due for August and September. Invoices right now. Okay. What
are your documents as soon as possible? Don’t wait until the 15th or the day before to order
and make sure if you’re ordering them next week that you select rush. Even, even if you
select rush on Wednesday, that doesn’t guarantee that the document will be sent out by Friday
morning. Really the last minute to guarantee that it
goes out on Friday is by ordering it rushed on Tuesday. And just making sure you check
in to make sure there’s no resolve, any unresolved research notifications that could be holding
that document up at processing. I have a bunch of recommended recommended resources that
we use here. We have our, our Texas ebook. We have all the state by state resources that
you could want. We also have an ask an expert center on a levelset.com and that’s staffed
by a combination of in house attorneys along with a network of construction attorneys that
we’ve worked with in the past and they’re here to provide our customers and anybody
really using the levelset site with quality legal information. There’ll be able to answer
your answer any legal question you have and about two to three business days. Just keep
in mind that they are, we are a software company and not a law firm, so we’re unable to advise
you on what, what specifically to do, but we can provide you with different options
and enough information for you to make a high quality decision along with additional resources
that we think you may find helpful. This is where you’ll find the ask an expert
center and you can always chat into our support team. They’re experts with our state by state
resources. They know the product in and out, like back of their hands. They can be reached
either via an app chat or via email right there. So I will hop in here and I’m going
to look at a couple of questions we have here. I got a question from John. Our apartment
complex is residential or commercial. So really, really good question. And that that could
depend on the amount of units in there. But in general, most apartment complexes would
be considered commercial. Residential would generally be any type of residents that has
four units or less. And John asks you, you have to file separate liens for each month
on a job and no, you do not have to file separate liens for each month on a job. The lien deadline
is going to be based off of your last furnishing dates. So the last day that somebody supplied
materials or labor to a construction job it will be for residential jobs. It’ll be three
months after that date or four months after that date for commercial jobs. What is required
for each month is sending a monthly notice that work was performed in that particular
month and went unpaid. Really, really great questions. We have a
question from Jim. Can you go into a bit more detail on what constitutes completion of work
from a lease rate perspective specifically? In some cases there can be discrepancies where
either the work is not allowed to be completed, whereas the contractor, we have completed
everything for the contractor, but the homeowner is, or GC is not confirming that all work
is complete. How can lien rights be retained or how does that affect the notice requirements?
So that’s a really, really great question and I, I would, I would encourage you to seek
out a little bit more information on our ask an expert center. But in general lien rights
are retaining lien rights in the state of Texas. For anybody who is not contracting
directly with the property owner, they must send those monthly notices on a recurring
basis in order to retain lien rights. The, okay a dispute about whether or not the work
is complete generally doesn’t impact whether or not a party needs to send a notice to,
to protect their, their lien rights if work is performed and unpaid. It is a requirement
to secure lien rights to send those notices. So I have another question here from Megan.
Currently we are not creating invoices in our account, but have the invoices in our
QuickBooks, should we be entering those invoices and to levelset as well? How would we know
which ones to enter and if not all customers have been paid at sending in payment. Okay.
Well that’s a really, those are some really, really good questions, Megan. I’m glad you
asked that. So if you our a level set and a QuickBooks user, we do offer, depending
on the type of subscription you have, we do offer integrations between the two software.
So basically any job that you entered into a QuickBooks would be pulled into a level
set and anytime you add an invoice or Mark and invoices paid, that should be updated
within your level set account. And it’s a really easy way to keep track of you know,
not only your accounting but also a lien rights just with one platform. You’d be doing the
majority of your work in QuickBooks. When you do the levelset integration in terms of
marketing invoices is paid and adding new invoices. But you’d be popping into levelset
just to order documents. And just verifying that you wanted those documents to go out.
Mmm. Those are really, really great questions.
We have another one here from another one from another. Megan, what if we invoice for
work done in November, but the GC comes back and asks us to revise the invoice to include
with the months prior billing. Would our rights still be the same or does that mess with our
rights? That’s a really, really good question, Megan. So the way Texas statute works just
in general is each month that work is performed and not paid in full for if money is owed
for that particular month in order to secure lien rights for that particular amount of
money owed for that month, monthly notices must be sent whether or not you know, people
are asking you to do funky things with your invoices. That’s typically outside of what,
you know, Texas statute would really be looking at. But I would, I would consider asking our
ask an expert center for a little bit more information about how those contract terms
or how I’m messing with an invoice like that may impact lien rights or make it more confusing.
But in general each month work is performed and unpaid requires its own monthly notice. So Paul asked a really good question, what
happens after a lien has been filed? What is the next step? So in general, if you’re
sending these, these preliminary notices and you’re sending a payment reminder and monthly
notices, most of the time you’re not going to get to filing a lien. And that’s in a,
you know, in an ideal world, however, sometimes those negative outcomes do occur. And when
the, when they do occur and you do file a lien in most circumstances that will lien
is enough to you know, prompt payment. Most folks don’t want want to lean on their title.
It makes it really, really difficult them to do anything financially with the property,
whether that’s refinance, get a construction loan or sell it. It is important to note though
that once a lien is filed, it doesn’t just stay there forever. There are further actions that need to be
required and what a lien really, really does besides if there’s money flowing still on
a job, it freezes. It can freeze money, it can do, it can do a few different things that,
that muddle that muddies the water for everybody on the job. But really the biggest piece of
leverage it gives a claimant is it allows that claimant to initiate a foreclosure suit
to sell the property to recoup the amount of money that they’re owed. So if somebody
gets a lien filed on their property and that the contractor has a valid claim, that contractor
could initiate a lawsuit in court, which would allow them to foreclose on the property to
recoup that money. So they’d be able to actually sell the, the house or the parcel of land
that they worked upon in order to satisfy the debt that’s owed to them. And it secures that, that piece of land at,
or how we like to like to talk about it, we call it encumbering. So it basically secures
that piece of land as uh involuntary collateral. So the property owner doesn’t really have
a say in whether it’s collateral or not. So it’s really, it’s a really, really powerful
means of Mmm. Securing payment. And without a lien most cases you know, folks who initiate
a lawsuit to collect money without without filing a lien first. Typically walk away with
much less than than they provided. Which is, which is a really really, really, really difficult
a situation to be in, especially if you’re out of money and then you have to hire an
attorney it can get quite expensive. So that’s why it’s such a powerful and effective tool. So the next question we have, we have another
one for Megan. We performed work on a residence back in January and we’re told we could complete
the work months later. Months later we found out we were fired from the job and the GC
had someone else complete our work. We sent out the intent and lean in June. Are our rights
still covered if we waited so long? And Megan, that’s a really, really good question. And
in general that would be a better question for an attorney. I am, I’m a software consultant
and I’m not qualified to, comment on whether your rights are still intact, but what I can
say is in general, those deadlines and requirements are very, very black and white in the state
of Texas. And must be followed to a T. Otherwise parties lose their lien rights. We have another one here from Steve McCune.
We have two from Steve. It looks like what is the significance of an owner issuing filing
an affidavit of completion when the owner feels the project is substantially complete
that can, that can do a couple of different things, Steve. It can mitigate the owner’s
financial risk in terms of anybody who is filing a lien on the job. So it can, it can,
it can help the, the owner in most cases. And it also alerts other parties on the, on
the job as well if the entire job is complete. Mmm. You know, it’s, it’s time to start collecting
retainage folks. And we also have another question from Steve here. Mmm. Do monthly
notices have to be sent by certified mail? And the answer is yes, they must be sent by
certified mail. And the nice thing about sending them by certified
mail is that you can, Mmm. You can track where they are within the U S P S system. And that’s
another service that we offer. Any document that we send out via via certified mail, we
will upload the tracking information into your level set account, attach that to the
document so that you can see the progress that that document is making from the time
it leaves our hands. So at the time it gets to the recipient and it looks like we have,
how about we have Steve asking about conditional and unconditional lien waivers. How about
collecting conditional and unconditional lien waivers from subs and vendors? So collecting,
collecting those lien waivers are really, really important. In terms of making sure
everybody on the job is getting paid. And a lot of times if there’s a financing company
or assurity company involved and even even some larger GCs will require that folks collect
those, collect those documents from their subs and their subs because they don’t want
any surprises on the job. So they can be helpful. And in general, it’s not, it’s, we don’t consider
it best practice to request or send condition a unconditional lien waivers until payment
has been received. Conditional lien waivers can be really effective. Excuse me. Additional lien waivers can be really, really
effective in helping prompt payment and moving things along a little bit quicker. You’re
basically giving somebody a piece of paper that says, Hey, once I receive payment, Marlene,
Marlene rights are waived. So really good question. Should lien waivers be for the amount
paid or the amount invoiced with retainage taken into consideration? So that’s a really
good question and that’s going to depend on the type of lien waiver that you’re using.
Most of most lien waivers will especially conditional lean waivers will lists the amount
of money to be paid. Some folks will list exceptions, so they’ll list like you know,
this does not include retainage. But most of the time, some, most of the time, at least
our, our forms have language on them that let let people know that this amount doesn’t
include retainers. I believe I had one other question here, right
folks? Well, I’ll be on the line for another 10 minutes or so. If anybody has any more
questions, please let me know. Otherwise, I’m good luck getting good luck with this
next, next round of Texas documents. Looks like somebody. All right. It looks like Bryce
had a question inside the chat. Sorry, I did not see that. I was in the Q and a panel.
What is the customer’s role if they are leasing the commercial oil slash gas property? In
most cases, if somebody is leasing a up a parcel of land or a unit in a building, they
typically be considered the tenant. Can you review deadline for notices for government
projects such as hospital is the notice still do the 15th, three months after. It’s a really,
really good, that’s a really, really good question and I can go back on that here for
ya. Texas monthly notices. There we go. This is,
this is right for you. This is for you, Mary. One moment. Let me slide this out of my, out
of my view here and get rid of this panel. These are your notice requirements for public
jobs. So Mary, if you’re a first year sub, meaning you contracted directly with the general
contractor third month notices are required to be sent to the oops. Good. The GC and the
surety for if you did not, if you did not if somebody did not contract directly with
the GC or if they were a lower tier sub, then they would have a second month notice and
a third month notice. The second month notice is only going to be sent certified to the
GC while the third month notice needs to be sent to the GC and the surety. And in general, if you have a requirement
that says only mailed to GC, you can always add the property owner or the surety company
or any other stakeholder on the job that has an interest in keeping the job lien free.
That’s just the required required a recipient of the document. But if the GC sees that you,
that the property owner also received a, a notice, they’re going to be much more responsive
and likely to want to, you know, pony up quicker. Oh. And it looks like we do have one more
when our retainage notices do for commercial jobs. So in general you can send a notice
of contractual retainage at the beginning of the job. A lot of times those are sent
based off of a completion or a termination date. Another question, can you lean a direct customer,
meaning no subcontractors? So yeah, I’m in the state of Texas. A GCs can still file mechanics
liens if they, and that GC direct was directly in contract with the property owner, they
can still file mechanic liens and they’d just be following the same deadlines for those
liens as their counterparts on residential and commercial jobs. But it is important to
note Rosa did ask that question. You can only lien a direct customer if that direct customer
is the property owner. And liens typically aren’t against a party. They’re going to be
against the property, right? So they’re going to encumber the property and allow that claim
until later foreclose on that property too. Mmm. Satisfy the debt that’s owed to them.
It’s not necessarily you know, a judgment against, you know, property owner a, it encumbers
the parcel of land and the actual land on which the work was, was performed and improved
on. And we have somebody else Rosa’s asking is
that the same for a bond on our property? And yes, that’s, that is correct. It would
be you’d be following the same, same deadlines for a bond claim as well. Again, as you’ll
see here on public jobs, if you contract directly with the owner, there are no notice requirements.
And Mary asks, can we get the webinar email to us? And if you, if you registered and if
you’re in attendance, it means you’re registered. We’ll be following up with an email and then
will have the recording of a webinar along with the slideshow deck. Even though the first
few slides I had my speaker notes open, I apologize for that. It’s a new new webinar
system for me here, so I’m still learning. Please, please, please don’t hesitate to reach
back out. I know this was a lot of information, but
we’re here to help. If you, if you come across, if another co if a question percolates in
your mind over the next couple of days, please, please reach out and ask us. We’re here to
help. We want to get you paid. Well, thank you all so much for attending today. It was
a pleasure chatting with you about Texas lien law, and I’m happy that it was so informative
for so many of you. I appreciate your patience with me as we as I worked out the kinks at
the beginning of the webinar, join us for future webinars as well. I’ll be hosting how
to close out 2019 invoices next Wednesday at the same time. So tune in for that if you’re

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