Getting Paid with a Mechanic's Lien in Construction
Construction is one industry where there are often issues with contractors (and others) getting paid and work getting completed in a timely fashion. If you are one of those who find yourself unpaid, you have a few different options. The main choice, and the most common tool available to you, is to file a mechanic's lien. Whether you've filed one before or not, it's important to refresh your knowledge of the rules and the process so that you can get the best outcome
What is a Mechanic's Lien?
A mechanic's lien is a public record that appears on a title search of properties. It can
be placed on any property where bills are not properly paid. This lien keeps the property
from being sold or transferred until or unless the unpaid bills are addressed and
resolved. In order to file this lien, contractors will need to prove that there was an
agreement in place and that there is an outstanding balance.
This will encumber the property, getting the attention of all the involved parties, including the construction lender and the property owner. Many people who are using loans to complete construction projects will suffer financial consequences, too, if they are faced with a mechanic's lien.
Do I Have to Provide Preliminary Notice?
A preliminary notice is a document that is given to the project owner at the start of the
project that states that in the event that contractors are not paid, a mechanic's lien may
be filed. It's essentially a contractual notification so that people know what to expect. It
also gives contractors legal recourse and proof that they followed the legal process to
You can check your state's rules to figure out whether preliminary notice is required where you do business. However, sometimes, it's just good business to make sure that everyone is on the same page by providing this document in all of your contracts.
How Does It Work?
Once you've decided to file a mechanic's lien, there are certain steps that will need to
happen. You'll need to get the necessary paperwork together and fill out the lien notice
in full. You should include:
* Your contact information
* The property owner's information
* General contractor information
* The amount claimed is unpaid
* A legal description of the property
* A description of the labor, materials, and job details
* A copy of your license and certification
Along with providing all the necessary paperwork, you will also need to sign this lien in front of a notary to make it a legally binding document. Then, you can submit it and wait to get paid.
Protect Yourself and Your Business
The main purpose of these liens is to ensure that everyone involved in construction
projects gets paid. Although you don't want to use mechanic's liens as a first line of
defense, they can be a great way to recoup money when nothing else is working. Make
sure that you know the process and if you need help, contact the experts at Nationwide
Having options like a mechanic's lien can help you in the event of non-payment. If you have a construction company and need help getting your construction payments, that is where Nationwide Notice, Inc. comes in. We are a full and self-service preliminary notice and lien service company specializing in assisting construction companies to protect their receivables. We help construction companies by assisting with lien laws and related documents, according to their state's requirements. You can learn more about what we do here to see how we can help. You can also find out what sets us apart from the rest on this page. Get started with us today and secure your payments.