Mechanics Liens Are Key to Secured Payment
As a contractor or subcontractor on a construction project, you're in essentially the same position as an unsecured lender. Your contract is, at its heart, a two-way promise that if you perform certain work, you'll get paid a certain amount at a certain time. Unless there's a payment bond in place, you have to hope the project's owner or GC has the good faith to meet their end of the bargain. Mechanics liens give you something more concrete to rely on.
Mechanics Lien Basics
You may already know that a mechanics lien acts as a form of security to make sure you're paid for the work you do on a construction project. It places a legal hold on the real property itself, and provides security for the debt you're owed. When they're done right, construction liens like these can provide a powerful incentive for an owner to make sure you get paid, since payment releases the lien and allows the property to be financed or sold.
Your rights as a contractor to file any kind of construction lien will vary depending on what state you're working in and the type of project you're working on. Some states will allow you to file a mechanics lien for the full amount owed on your contract, even if you've already received partial payment for your work. Many states also allow you to recover the costs you incur trying to collect on past-due amounts owed.
A number of states require you to provide the owner with advance notice before you file a mechanics lien against the property; others have different notice requirements depending on whether the project is a public or a private one. And some states require you to send the owner preliminary notice before any funds are due if you want to preserve your right to file a mechanics lien.
Emalfarb Law acts as national lien counsel, representing hundreds of clients in the construction industry. Our experienced construction lien attorneys can advise you as to what the mechanics lien laws apply to your project, make sure you meet the requirements for the state your project is in, and help you collect what you're owed.
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Payment Bonds May Help
Many construction projects have payment bonds in place. In theory, these bonds ensure contractors get paid for their work. In some cases, however, short-sighted owners use the existence of a payment bond as an excuse to delay or default on contractor payments. In addition, time limits and other legal requirements can dictate when and how you're able to collect on a payment bond. At Emalfarb Law, we understand payment bond requirements and regularly help our clients collect.
Emalfarb Law Can Help You Get Paid
Emalfarb Law has helped thousands of construction law clients get paid for completed projects all across the country. We understand mechanics liens, payment bonds, and how to make sure you get the money you're owed. Check out our recent blog posts for more information about ways we can help your company focus on what you do best.
To learn more about how we can help, use our online reservation form to schedule a consultation.
Waiting on money for a job?
Tell us what happened and National Lien & Bond will connect you with an attorney in your state. Free consultation, no obligation.
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