On Nov 3, 3:43 pm, Swingman wrote:

A different kettle of fish though, eh? ... a Lender has an entire legal
pallette of liens that a mechanic/contractor/materialman (unless I'm
missing something in the Texas Property Code) does not have access to,
from Deeds of Trust, to the liens of which you speak?

I must confess that I don't remember the exact name of the lien type
that was filed. In the case of the Lender action, Norwest filed a
lien equal to the amount of construction as a second position to the
lot or land loan.

In some cases, the lot/land equity was actually deeded over to Norwest
as a down payment in lieu of cash. These transactions were handled
differently since Norwest held title to the real estate itself, and it
held the only position of interest against the real estate. With that
in mind, the Norwest would pay off the outstanding balance of a lot/
land, assuming the superior position. The master lien would be
modified (increased) as the construction continued until finished.

Since Norwest's loan was not on a house, they had to file the lien as
a lien against real property with proposed improvements (as you
know). At the end of the process we took the clear title and flipped
the construction loan including the lot and recast it as a permanent
"real estate" loan.

I had a few of my remodeling cohorts that (when they were still in
business... this economy finished them off) that filed a M&W lien
against a project before it started. Only prudent when you are doing
$80 - $250K additions.

Their liens were not considered valid for the full amount of the
project as while **in process** they had not performed the full amount
of work. The strategy there was to have the lien in place to protect
their position in the line of creditors, and if/when it went to court
the judge would modify the lien to reflect actual monies owed.

Texas real estate law is set up to protect the homeowner and in many
ways leaves everyone else (except the banks) out in the cold. Since
only the superior lien holder can force foreclosure, and only for the
reason of non-payment (not only the note, but insurance and taxes if
collected by them in escrow) a contractor that is in second position
has little power.

You can file all the liens you want and they will just sit in the
system. No harm will come to the deadbeat client.

That is why the banks and lenders have entire legal firms that
specialize in Texas real estate law constantly review, update, and
implement new documentation and strategies.

Then again, as every lawyer who I've tried to talk into suing a bank for
me has noted: In law school, if the question involves a bank, the answer
is automatically "the bank wins".

I can't get away with that.

Truer word were never spoken. The banks know the legal system/real
estate law so well that they can create a Gordian knot that can't be
unraveled by anyone but them. And one little hickey in your
paperwork... on small mistake... it can render your paperwork invalid
in some instances.

And it's a lawyer's game and you can't win, even if you prevail.

Can I get an AMEN on that one, brother? Not possible. Even if you
"win", you are lucky to be made whole, and if you are made whole, how
much goes to your attorney? And there is a lot of back and forth on
how much of your attorney's fee are "reasonable" and how much you
should allow as a normal cost of doing business for collections.

IME, and it often happens that, the more contractual diarrhea used in
trying to protect yourself against all eventualities, the more you
expose your intent to adverse interpretation in a court of law.

I agree. With plethora of unrealistic legal shows on TV, many now
think they are junior lawyers. I hear things like "I'm not sure I'm
comfortable with the language you used here" and other such drivel.
Some don't even understand what they are reading in the first place.
I think some believe it is a game, and the more aspects you provide
for them to consider, the more challenged they feel.

I've learned to do everything I can to keep it simple, or I walk away
... Bill Clinton's meaning of "is", notwithstanding.

We are certainly on the same path. I only do work for one attorney,
and he is such a great guy you would never know he was one. Others
are too argumentative, and LOVE to split hairs and interpret every
aspect of a project or repair. My current contract has the basic
legal caveats and verbiage in it, and no more. It is a simple two
page contract, with no tiny writing on it.

While this may sound arrogant, it isn't. I look at my meeting with my
proposed client as a mutual interview. I want to see if we are a good
fit for each other. If I smell trouble or there is an overly
aggressive know-it-all in the mix, I simply tell them "I don't think
we can help you" and leave.

Life is too short. The legal system is a long and winding road with
no end. Who needs the aggravation?

Robert