"I highly recommend Mitchell Milby as an attorney for any litigation involving design defects or construction disputes. Mitchell is very thorough in his research and preparations, and professional at all times. He has been a guest speaker for a class I teach on contracts and specifications at the University of Texas, Arlington, in the Department of Civil Engineering. He is an effective and interesting speaker, and my students speak highly of his presentations."

- Michael Fairchild, AIA, NCARB, LEED® AP, President, MwF.Buildingsmith.LLC

Lien Rights for Architects in Texas

September 17, 2010

Neither a borrower nor a lender be; for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.

Lord Polonius, from Shakespeare’s Hamlet, 1603.

Lord Polonius

Architects routinely ask us how to “encourage” a non-paying client to pay unpaid design fees, oftentimes when the client is already in possession of the design work. Aside from costly, time- consuming litigation (which should be viewed as the last resort of dispute resolution), the most effective method by which an architect can avoid effectively advancing the client fees with no prospect of payment is to file a lien. This article will respond to the more common questions from architects regarding their lien rights in Texas.

Lien History

The original lien in the United States dates back to 1791 when the Maryland legislature (at the urging of Thomas Jefferson and James Madison) passed a law to allow a “mechanic,” i.e., a builder, who improved real property to attach a “lien” against the real property itself to secure payment. Similar lien rights were included in the original constitution of the “republic” of Texas and later the Texas State Constitution; however, it was not until the latter half of the twentieth century that the Texas legislature revised the Texas Property Code to extend lien rights to design professionals:
An architect, engineer, or surveyor who prepares a plan or plat under or by virtue of a written contract with the owner or the owner’s agent, trustee, or receiver in connection with the actual or proposed design, construction, or repair of improvements on real property or the location of the boundaries of real property has a lien on the property.

Written Contract

Before you can even think about a lien, you must have a written contract with the owner, the agent of the owner, or an agent, trustee or receiver for the owner. Consequently, architects who perform design services with no written contract generally have no lien rights.

The ”Owner”

In the case of a contract with a prospective owner who later obtains title to the property, the prospective owner must have some legal or equitable interest in the property at the time the architect makes the contract. Consequently, be wary of the client who requests work based on “future” projects with no ownership interest – your lien rights can only attach to the current project, assuming the client owns the subject property.
What if the contract is with a lessee of the property, i.e., tenants of a commercial property? As a general rule, an architect does not have a right to a lien on a landlord’s property without showing that the lessee was acting as the agent for the landlord. Consequently, architects who perform interior design for tenants are generally without lien rights vis-à-vis the landlord and the real property; litigation may be the only option to recover unpaid design fees.

Protecting Lien Rights – in Brief

A lien in favor of an architect attaches on (1) the recording of a lien affidavit and (2) providing notice of same to the owner and, if necessary, the original contractor (the contents of the lien affidavit are beyond the scope of this article; note: additional steps must be taken to protect lien rights on residential property that is the subject of a homestead exemption).

Important: failure to file a lien affidavit within the deadlines will defeat any lien rights.
In the case of non-residential construction projects, an architect has four months and fifteen days to file a lien affidavit with the county clerk of the county in which the property is located. In the case of residential construction projects, the deadline is shortened by one month – three months and 15 days after the day on which the indebtedness accrues.

The date to calculate “indebtedness” depends on an architect’s status as either an original contractor or subcontractor; however, count on beginning the calculation on the earlier of the date the original contract is terminated, completed, settled, or abandoned.
In summary, judicious and prompt use of liens (assuming a written contract) should help avoid involuntary pro bono work. If you are going to do work for free, it should always be on purpose.