Unenforceable Lien Discovered by TCo

[Kristyn Grimes]

Hey y'all, it's been a while. So I finally got my money pit flip under contract. As it turns out, in the state of Texas, any unscrupulous d-bag can place a mechanics Lane on your home. And does not even have to follow property code rules to do so. Long story short, I had a contractor quote me 22,000 in repairs to finalize and make turnkey and was paid 19,150 before he dropped off the face of the earth. We tried from October 2022 until December 2022 to call, text, and email for completion status (unfinished projects abounded) with no return whatsoever. Then a few days before Christmas 2022, we get an email with an invoice for an additional 18,000 for projects he was never asked to do and or did not complete in the previous months. We tried to return his email and phone him again to discuss the invoice and unfinished projects with no answer. We assumed that if he really wanted his 22,000, he would get in touch.

Subsequently, we ended up finishing up some of the projects ourselves and listed it for sale in February 2023 and finally when under contract the middle of July 2023. The title company returned to us a few days later that there is a mechanics lien on the property for 22,000. We provided an attorney with all of our documentation: emails, texts, a copy of the recorded lien the title company provided, the unrecorded lien we received at the beginning of July in regular post out of the blue, and invoices with cleared checks attached, we now know the lien is unenforceable because:

1. All projects that were completed have proof of payment and unpaid portions are still unfinished with photos.

2. Lien was filed after the Texas property code statute limit for residential property (15th day after the 3rd month of project completion date).

3. Notice of initial affidavit of lean was not given by the claimant (not sent registered mail).

now of course we're under contract with some buyers from out of state who are looking to do this deal with the 1031 exchange. I am hoping I can go back to them and say unfortunately the title is clouded and it will take some time to resolve and remind them that the 1031 has a ticking time clock and they will be more amenable to just canceling the contract all together. I am even considering giving them back the option money they paid to sweeten the pot. My agent for this property of course consulted some attorney friends and her broker, all of who would have a financial interest in this deal, and advises me to get her friends to send a demand letter to this guy to settle up for a smaller sum or demand him to sign a waiver of lean. Lean. I'm just curious everyone else's opinion but I'm leaning towards taking the home off the market and leasing it for the deed restricted minimum of 6 months which also happens to be the exact amount of time left on the lien. This is a cheaper option in my eyes. Then possibly instigating a lawsuit and counter suit just for me to have to go and spend 10 minutes in court to prove it's invalidity and never see my court costs refunded to me because Texas...

Comments? Thoughts? Laments?

Plz & ty 🙂