Construction litigation · Dallas, Texas
Construction Disputes: Payment, Liens, Defects and Delay
When a project stops paying, a lien lands on your property or the finished work fails, the money at stake is usually the margin on the whole job. Experienced counsel keeps the deadlines, the evidence and the working relationship in view at the same time.
- Shareholder, Hallett & Perrin, P.C.
- State and federal litigation experience
- Owners, general contractors and specialty subcontractors
The disputes that bring owners and contractors here
Most construction cases start with one of these moments.
- 01The owner or general contractor has stopped payingPay applications are approved but the checks do not come, or retainage is held long after completion. The lien and prompt payment deadlines are already running.
- 02The general contractor was paid but did not pay youA subcontractor or supplier learns the owner has paid and the money stopped one tier up. Texas law gives you rights against the owner's property and the funds, if the notices go out on time.
- 03A lien was filed on your propertyAn owner finds a lien affidavit in the county records, often from a subcontractor it never contracted with. Whether the lien is valid turns on notices and dates that can be checked quickly.
- 04The finished work is defectiveWater intrusion, failed systems or structural problems surface after completion. Who pays depends on the contract, the warranties and the statute of repose.
- 05The schedule slipped and someone wants delay damagesThe owner asserts liquidated damages, or the contractor claims extended overhead and acceleration costs. The daily logs and the notice clauses decide these claims.
- 06Change orders were performed but never paidExtra work was directed in the field and billed later, and the other side now points to the written change order clause. The question is what the contract and the course of dealing allow.
How a construction dispute is handled
The order matters: deadlines first, then the paper, then the money.
Read the contract and the payment chain
The prime contract, the subcontract and every flow-down clause set who owes what to whom, which notices are required and whether disputes go to court or arbitration. The contract date also decides which version of the Texas lien statute applies.
Calendar every statutory deadline
Lien notices, lien affidavits, retainage notices, bond claims and the deadline to foreclose each run from the calendar month of the work. The first task is to fix those dates and protect every one that is still open.
Assemble the record
Pay applications, schedules of values, change orders, daily logs, inspection reports, photographs, delivery tickets and the emails between the field and the office. Construction cases are decided on documents that already exist.
Measure the exposure, both ways
What is owed, what can be offset for defective or incomplete work, what interest and attorney's fees the statute or contract adds, and what the other side will claim back. The number shapes the strategy.
Use the pre-suit tools
A properly served lien notice, a prompt payment demand, a notice of intent to suspend work or a request for mediation often produces payment without a lawsuit. Each step is taken so that it also strengthens the case if suit follows.
Litigate or arbitrate, and keep deciding
If the dispute goes forward, it is tried in the forum the contract requires, in state or federal court or before an arbitrator. At each stage the client gets a clear picture of cost, timing and the realistic range of outcomes.
The Texas law that applies
Mechanic's liens: Texas Property Code chapter 53
A contractor, subcontractor or supplier who is not paid for work on private property can secure the debt with a lien on that property. The rules were rewritten effective January 1, 2022 (H.B. 2237); a contract signed before that date still follows the earlier version, so the contract date is the first thing to check.
Under the current chapter, a subcontractor or supplier must send a notice of claim for unpaid labor or materials to the owner and the original contractor by the 15th day of the third month after each month in which the work was done (Tex. Prop. Code § 53.056; the second month on residential projects). Every claimant then files the lien affidavit with the county clerk by the 15th day of the fourth month after the month the work ended (§ 53.052; the third month on residential projects). Suit to foreclose the lien must be filed within one year after the last day the affidavit could have been filed, extendable to two years by a recorded agreement with the owner (§ 53.158).
An owner facing a defective lien can ask the court to remove it on a summary motion limited to listed grounds, such as a late notice or a missing affidavit (§ 53.160). Lien waivers signed on a Texas project are enforceable only if they substantially follow the statutory forms (§§ 53.281, 53.284).
Prompt payment: Texas Property Code chapter 28
An owner who receives a written payment request for properly performed work must pay within 35 days; a contractor who is paid must pass each subcontractor's share down within seven days, and the same seven days apply at every tier below (§ 28.002). Overdue amounts accrue interest at 1.5 percent a month (§ 28.004), and the court may award costs and attorney's fees (§ 28.005). In a good faith dispute the paying party may withhold up to 100 percent of the disputed difference on a commercial project, 110 percent on a house, and must still pay the rest (§ 28.003). On a private commercial project, a contractor or subcontractor that is not paid an undisputed amount may suspend work on the tenth day after written notice to the owner and the owner's lender (§ 28.009).
Defects and the time to sue: Civil Practice and Remedies Code §§ 16.008 and 16.009
A claim for a defective or unsafe improvement against the builder must be brought within 10 years of substantial completion, whatever the date the defect appeared (Tex. Civ. Prac. & Rem. Code § 16.009). Since June 2023 the period is six years for a residence when the contractor gave a written warranty that meets § 16.009(a-3). The same 10-year outer limit applies to architects and engineers (§ 16.008). If the damage occurs in the last year of the period, the claimant has two more years to sue (§ 16.009(d)). The statute does not bar a claim on a longer written warranty or one based on wilful misconduct or fraudulent concealment (§ 16.009(e)). Inside that window the ordinary limitations periods still run, including four years for a contract debt (§ 16.004).
Why experience in construction disputes changes the outcome
Construction cases are won on paper that already exists: the contract and its flow-down clauses, pay applications, change orders, daily logs, inspection reports and the emails between the trailer and the office. A litigator who has handled payment disputes for owners, general contractors and specialty subcontractors knows which of those documents decides the case and which deadline is about to close.
Tina Wysk represents each position in the payment chain in Dallas state and federal courts and in arbitration: the owner holding retainage against defective work, the general contractor caught between an unpaid subcontractor and a slow owner, and the electrical, mechanical or plumbing contractor whose margin is sitting in someone else's account. Seeing a dispute from every side shapes the advice: when the lien notice has to go out, when a suspension notice under chapter 28 moves a payment, and when a mediated settlement with a payment schedule is worth more than a judgment nobody can collect.
The business cost of a dispute
What a construction dispute costs the business
Legal fees are the visible part. These are the costs that show up in the business while the dispute is open.
Cash locked in the project
Retainage and disputed pay applications sit frozen while payroll, suppliers and equipment payments keep coming due. For a specialty contractor the unpaid balance is often the profit on the whole job.
Your own payment obligations continue
A general contractor that has not been paid still owes its subcontractors their share of whatever it does receive within seven days, and still faces their lien notices on the owner's property.
Questions from lenders and sureties
A recorded lien or a pending suit comes up at the next loan draw, refinancing or bond renewal and has to be explained, documented and sometimes bonded around.
Project managers in depositions
The people who can run the next job are the witnesses on this one. Every hour spent reconstructing a schedule for the lawyers is an hour not spent on a site that is paying.
The next bid
Owners, general contractors and subcontractors meet again on the next project. How this dispute is handled decides whether they work together afterward, which is a reason to resolve it with precision rather than volume.
Questions
Questions about construction disputes in Texas
How long do I have to file a mechanic's lien in Texas?
On a commercial project the lien affidavit is due by the 15th day of the fourth month after the month your work ended, and a subcontractor or supplier must first send the notice of claim by the 15th day of the third month after each month of unpaid work (Texas Property Code sections 53.052 and 53.056). Residential projects run one month shorter at each step. Suit to foreclose the lien must follow within one year after the last day the affidavit could be filed. A contract signed before January 1, 2022 follows the earlier version of the statute.
A lien was filed on my property that I believe is invalid. Can it be removed?
Yes, if the lien fails on one of the grounds listed in Texas Property Code section 53.160: a late or missing notice, a defective or late affidavit, a lien on homestead property without the required contract, or a valid waiver already signed, among others. The owner files a verified motion in the lawsuit over the lien, the claimant gets at least 30 days' notice, and the court rules promptly. Where the lien is valid but the debt is disputed, the fight is over the money rather than the filing.
What interest and fees can a contractor recover for late payment?
Under the Texas Prompt Payment Act, an amount that is due and unpaid accrues interest at 1.5 percent a month starting the day after it became due (Texas Property Code section 28.004), and the court may award costs and reasonable attorney's fees (section 28.005). The contract may set its own interest rate and fee terms as well. The Act applies to the undisputed part of a payment; a good faith dispute over quality or quantity allows the paying party to withhold the disputed difference.
Can a contractor stop work when the owner does not pay?
On a private commercial project, yes. If the owner does not pay an undisputed amount within the statutory time, the contractor or subcontractor may suspend performance on the tenth day after giving the owner and the owner's lender written notice that payment has not been received and that work will stop (Texas Property Code section 28.009). The right does not apply to single-family residential or government projects, and a contractor that suspends without following the notice steps risks a breach claim of its own.
How long does an owner have to sue for construction defects?
The outer limit is 10 years from substantial completion for claims against the builder, architect or engineer (Texas Civil Practice and Remedies Code sections 16.008 and 16.009), and six years for a residence where the contractor gave a qualifying written warranty, a rule added in 2023. Inside that window the ordinary limitations period for the particular claim still applies, four years for a contract claim. A longer written warranty, wilful misconduct or fraudulent concealment are outside the repose bar.
Will my construction dispute go to arbitration or to court?
It depends on the contract. Many standard forms, including the AIA family, contain arbitration clauses, and Texas and federal courts enforce written arbitration agreements as written. Lien rights are preserved by the statutory notices and the affidavit no matter where the dispute is heard, and a lien is foreclosed by a court, so the two tracks often run side by side. The contract's venue, notice and mediation clauses are read before any filing.
Should the demand letter go out before the lien notice?
They usually go together. The lien notice is a statutory step with a fixed deadline and a prescribed form, so it is never held back for tactical reasons. The demand letter is where the business position is stated: the amount, the supporting documents, the interest running under chapter 28 and the time left to resolve the matter before suit. Sending either one does not start a lawsuit.
Guides on construction and payment disputes
Plain answers under Texas law to the questions owners and contractors ask before they call.
Construction & Payment Disputes
A Lien Was Filed on My Property. How to Remove an Invalid Lien in Texas
Texas gives owners a fast summary motion to remove a lien filed late or without required notices, a bond procedure to clear title now, and damages for a fraudulent lien.
Construction & Payment Disputes
Change Order Disputes: Getting Paid for Extra Work
Texas enforces change order clauses, but an owner who directed and accepted extra work can waive them. Since 2023 a contractor may decline unsigned extra work above ten percent.
Construction & Payment Disputes
Claims Against Architects and Engineers: The Certificate of Merit Rule in Texas
A claim against an architect, engineer or surveyor must be filed with an affidavit from a same-discipline Texas professional detailing each error. Without it the case is dismissed.
Construction & Payment Disputes
Construction Defect Claims in Texas: Who Is Liable and for How Long
In Texas the party who promised the work is liable in contract, designers for their own errors, and the deadlines stack: four years, two years, and a ten-year outer limit.
Construction & Payment Disputes
Delay Claims and Liquidated Damages on Construction Projects
Texas enforces no-damages-for-delay clauses except for owner interference or bad faith, and liquidated damages only when the harm was hard to estimate and the sum a fair forecast.
Construction & Payment Disputes
Disputes Under AIA and Other Standard Form Construction Contracts
Standard forms run disputes through their own steps: a written claim, the Initial Decision Maker, mediation, then the forum the parties checked. Few Texas statutes override them.
Talk through the project before a deadline closes
Bring the contract, the pay applications and the dates. The first conversation fixes the calendar and the options.