Lone Star Contracting sued to foreclose a mechanic's lien after the property owner stopped making progress payments. The owner argued the lien was barred by the four-year statute of limitations. The court ruled that as long as the construction contract remains active and hasn't been formally abandoned or rejected by either party, the lien deadline doesn't start running—even if the owner breaches by withholding payment. This protects contractors who continue work despite payment delays.
File your lien affidavit promptly when payment is missed—don't wait to see if the owner will catch up. Lone Star filed within months of the missed draws.
Keep working or clearly communicate that you're stopping work. Abandoning the job or accepting the owner's repudiation can trigger the statute of limitations and kill your lien rights.
Non-payment alone is not enough to end the contract. The owner must actively repudiate (show fixed intention to abandon) the contract for the lien clock to start ticking.