How Does a Repair Service Get Payment from a Customer for Equipment Repair in Texas?

Full question:

I have a field service repair business in Liberty, Texas. Most of the time we travel to the work site or the customer's facility to repair the equipment. How do I protect my interests in getting paid for the labor and parts that were performed or used in the repair?

• Category: Judgment Liens
• Date: 04/07/2025
• State: Texas

Answer:

There are several types of liens, all of which could cloud the title and prevent the seller from conveying marketable title to the buyer. A judgment lien is created when a court grants a creditor an interest in the debtor's property, based upon a court judgment. A judgment lien can be filed if an actual judgment in a lawsuit is obtained from a court. Such cases include failure to pay a debt, including credit cards, bank loans, or deficiency judgments on repossessed vehicles. In some circumstances, judgments can be enforced by sale of property until the amount due is satisfied. A plaintiff who obtains a monetary judgment is termed a "judgment creditor." The defendant becomes a "judgment debtor." secure payment of the claim to the injured party. After the judgment creditor places a lien upon the attached property, the next step in the collection process is to conduct a sale of the attached property to satisfy the judgment debt. If a lien were placed on a home, the judgment creditor would then seek to foreclose on the property, in the same way a mortgage holder such as a bank would foreclose if it were not paid. Laws regarding judgment liens vary by jurisdiction, so local laws should be consulted for specific requirements.

Liens that arise in construction situations include construction liens, contractor liens, mechanic liens, attorney liens, architect liens and other liens applicable in your state. Contractors, subcontractors, material suppliers, and laborers can place liens against property for the value of work or materials installed on that property. The filing requirements and statutes of limitation for these liens vary according to the law of each state. In some states, contractors and subcontractors must notify the property owner prior to filing a lien, but in other states such liens can be filed without any notification to the owner. Lien claimants who are contractors or subcontractors are protected under this legal doctrine because all their materials and labor are "buried" in the real estate, having become part of it. Unlike mortgage liens, however, the liens of these claimants cannot force a foreclosure.

A lien is the right to retain the lawful possession of the property of another until the owner fulfills a legal duty to the person holding the property, such as the payment of lawful charges for work done on the property. The right of lien generally arises by operation of law, but in some cases it is created by express contract. Liens that arise in construction situations include construction liens, contractor liens, mechanic liens, attorney liens, architect liens and other liens applicable in your state. By virtue of express statutes in most states, mechanics and material men or persons who furnish materials for the erection of houses or other buildings, are entitled to a lien or preference in the payment of debts out of the houses and buildings so erected and to the land, to a greater or lessor extent, on which they are erected. It is used to enforce payment in order to clear the title to the property, because property with a lien on it cannot be easily sold until the lien is satisfied (paid off). In some states, a claim must be filed in the office of the clerk of the court or a suit brought within a limited time. On the sale of the building these liens are to be paid pro rata. In some states no lien is created unless the work done or the goods furnished amount to a certain specified sum, while in others there is no limit to the amount.

Please see the following TX statutes:

§ 70.001 PROP. Worker's Lien

 

(a) A worker in this state who by labor repairs an article, including a
vehicle, motorboat, vessel, or outboard motor, may retain possession of
the article until:

 

(1) the amount due under the contract for the repairs is paid; or

 

(2) if no amount is specified by contract, the reasonable and usual
compensation is paid.

 

(b) If a worker relinquishes possession of a motor vehicle, motorboat,
vessel, or outboard motor in return for a check, money order, or a credit
card transaction on which payment is stopped, has been dishonored because
of insufficient funds, no funds or because the drawer or maker of the
order or the credit card holder has no account or the account upon which
it was drawn or the credit card account has been closed, the lien
provided by this section continues to exist and the worker is entitled to
possession of the vehicle, motorboat, vessel, or outboard motor until the
amount due is paid, unless the vehicle, motorboat, vessel, or outboard
motor is possessed by a person who became a bona fide purchaser of the
vehicle after a stop payment order was made. A person entitled to
possession of property under this subsection is entitled to take
possession thereof in accordance with the provisions of Section 9.609,
Business & Commerce Code.

 

(c) A worker may take possession of an article under Subsection (b)
only if the person obligated under the repair contract has signed a
notice stating that the article may be subject to repossession under this
section. A notice under this subsection must be:

 

(1) separate from the written repair contract; or

 

(2) printed on the written repair contract, credit agreement, or other
document in type that is boldfaced, capitalized, underlined, or otherwise
set out from surrounding written material so as to be conspicuous with a
separate signature line.

 

(d) A worker who takes possession of an article under Subsection (b)
may require a person obligated under the repair contract to pay the costs
of repossession as a condition of reclaiming the article only to the
extent of the reasonable fair market value of the services required to
take possession of the article. For the purpose of this subsection,
charges represent the fair market value of the services required to take
possession of an article if the charges represent the actual cost incurred
by the worker in taking possession of the article.

 

(e) A worker may not transfer to a third party, and a person who
performs repossession services may not accept, a check, money order, or
credit card transaction that is received as payment for repair of an
article and that is returned to the worker because of insufficient funds
or no funds, because the drawer or maker of the check or money order or
the credit card holder has no account, or because the account on which
the check or money order is drawn or the credit card account has been
closed.

 

(f) A person commits an offense if the person transfers or accepts a
check, money order, or credit card transaction in violation of
Subsection (e). An offense under this subsection is a Class B misdemeanor.

 

(g) A motor vehicle that is repossessed under this section shall be
promptly delivered to the location where the repair was performed or a
vehicle storage facility licensed under Chapter 2303, Occupations Code.
The motor vehicle must remain at the repair location or a licensed
vehicle storage facility at all times until the motor vehicle is lawfully
returned to the motor vehicle's owner or a lienholder or is disposed of
as provided by this subchapter.

§ 52.001 PROP. Establishment of Lien

Except as provided by Section 52.0011 or 52.0012, a first or subsequent
abstract of judgment, when it is recorded and indexed in accordance with
this chapter, if the judgment is not then dormant, constitutes a lien on
and attaches to any real property of the defendant, other than real
property exempt from seizure or forced sale under Chapter 41, the Texas
Constitution, or any other law, that is located in the county in which
the abstract is recorded and indexed, including real property acquired
after such recording and indexing.