While historically there have been specific remedies available to parties who have perfected their lien rights on property, it can be time consuming and expensive for parties to pursue those remedies and further their rights under the law.  New legislation in Texas could make these remedies more rewarding to the prevailing party.

The Texas Legislature recently passed a bill that awards attorney fees and costs in any proceeding (1) to foreclose a lien, (2) to enforce a claim against a construction-related bond, or (3) to declare that any lien or claim is invalid or unenforceable under the law governing mechanic’s, contractor’s or materialman’s liens.  However, with respect to a lien or claim arising out of a residential construction contract, the court is not required to order the property owner to pay costs and attorney fees.  The law became effective September 1, 2011 for any actions commenced on or after that date.

Texas Senate Bill 539 amends the 53.156 of the Texas Property Code to require, rather than authorize, a court to award costs and reasonable attorney's fees as are equitable and just.  Prior to September 2011, a judge had discretion regarding the award of costs and reasonable attorney's fees to the prevailing party in a successful suit in this context.  Recent court cases also held that a mechanic's or materialman's lien holder who forecloses on a lien or bond is not entitled to court costs or reasonable attorney fees.

This new law could lead to more construction-related lawsuits for parties willing to pursue their lien rights and interests under the law.