Collecting Attorney Fees for Lien and Bond Claims

Previously, Texas law provided that a court “may” award costs and reasonable attorney fees in a suit to foreclose a lien, enforce a payment bond claim or declare a lien to be invalid to the extent that such costs and reasonable attorney fees were “equitable and just”.  The use of the word “may” allowed courts discretion over whether to award a lien claimant his or her attorney fees.  This led to unfair results.  Even lien claimants who prevailed did not always receive their attorney fees and/or costs.

In 2011, the legislature attempted to fix this problem by changing “may” to “shall” in the statute.  As a result, courts are compelled to award costs and attorney fees.  However, the Legislature left the “equitable and just” language in the statute, which will allow courts broad discretion in determining the amount of costs and attorney fees to award.

The new statute also carves out an exception for residential property owners.  Under the new statute, the court is not required to order a property owner in a residential construction contract to pay costs and attorney fees.

The Bottom Line

If you sue based on your lien and/or bond claim and prevail, you may still not receive the full amount of your attorney fees and costs, but now the court must award some amount.