We’ve been through this before.  The price of oil goes down, there’s some, let’s call it, re-shifting of assets, and eventually things come up again.  We will survive, but certain measures can give you some peace of mind in the worrisome interim.

In Texas, regardless of the type of real property or improvement to real property you provided labor, materials or equipment for, there is a lien available to protect your interest for unpaid work. Filing and having a valid lien in your pocket has various benefits.  In times like these, the biggest plus is in the event of a bankruptcy, you are a secured creditor. You’re in the VIP group and the chances of getting paid more than pennies on the dollar are exponentially higher.

There’s just one big hitch…you got to catch your lien in time!

If you provided anything for mineral property— any labor, materials or equipment for an oil, gas or water well, pipeline, mine or quarry—you are entitled to a mineral lien.  And luckily, mineral liens are the easiest.  Tex. Prop. Code § 56.021 gives you 6 months from the time the debt accrues to file a lien. Liens for any non-mineral property are a little trickier. Tex. Prop. Code §53.052(a) gives you until the 15^th day of the fourth month after the debt accrues to file a lien. But depending on whether you’re an original, sub- or sub-sub-contractor, you may only have until the 15^th day of the second or third month after the debt accrues to provide the proper notice for your lien. Tex. Prop. Code § 53.056 (b).

Where people usually go wrong is assuming the debt does not accrue until you send your net-30 invoice and the invoice goes unpaid.  That would make it too easy! For all Texas liens, the debt accrues, or the clock starts ticking, from the time you actually rendered the labor, materials or equipment.  Tex. Prop. Code §§ 53.053(b)-(c) & 56.005.  So let’s say you worked on a project from June 10 to 15—if the project concerned an oil well, you are entitled to a mineral lien that must be filed by December 15.  If this work was for a refinery or a plant, you are entitled to a mechanic’s or materialman’s lien, but you only have until October 15 to file the lien. And if you’re a sub-contractor for the work at the refinery or plant—meaning you contracted for the work with another contractor who contracted with property owner—you must provide notice of any unpaid amounts by September 15. A sub-sub-contractor has even less time to provide all the proper notices.

Although no one ever likes to think liens will be necessary, they are the best way to make sure you’re as protected as can be for any unpaid work in times like these.  In addition to watching the time lapse on your accounts receivables, knowing other job details from the outset of the project is important.  Keep track of the address/location of the actual work (pro tip: keep record of GoogleMap coordinates for work on a pipeline!), the contract chain and the owner of the property.  This will make the lien process as easy as possible.