Mechanic lien rights are a unique element of the construction industry. These rights are given to construction project operators to allow them to file a mechanic's lien if they aren't paid for their services. However, it's important to know who has these rights, what they mean exactly, and how you should handle them when they come up.
When it comes to different state lien laws, the main difference is the fact that each state has different timelines. This can affect when you have to notify an owner that you are working on a project. It can also affect the collections and invoicing process when you need to file a notice of intent and the mechanic lien itself.

Lien rights give legal permission to file a mechanics lien against an owner's property if payment isn't received for construction service. Liens are a legal claim that is made on the title of the property, and they almost always require the debt to be paid to be cleared.
The purpose of these lien rights is to give added protection and minimize risk for contractors, suppliers, and subcontractors. Everyone in these categories puts a large amount of their own time and money into a project up front, with the understanding their customer will pay.
A mechanic's lien is filed by the person who hasn't received payment on a private construction project yet had provided either labor or materials for said project. The goal of the lien being filed is to receive payment on the project. However, in the event the payment doesn't come, the lien filer can enforce foreclosure on the property, where they will then receive their payment from the sale of the property.

The good news is that every state in America has lien rights. However, they can vary from state to state, so it's best to find out the specific guidelines in your state. In most cases, the following people have the right to file a lien when needed:

* Direct contractors
* Subcontractors
* Material suppliers
* Equipment leasing companies
* Architects
* Engineers
* Laborers
Working on a construction project will give the above people lien rights automatically. However, if the correct steps aren't taken in the construction process, it's possible to lose your right to file a lien, even when needed.

You don't want to lose your lien rights simply because you didn't follow the right steps or meet the deadlines of the proper procedure. Let's look at how to make sure you keep your right to file a lien if the need arises.

Send a Preliminary Notice

Almost every state requires you to send a preliminary notice to keep your lien rights. This is a notice that's sent in the beginning days of your construction project. The time limit for this notice to be sent varies by state, so it's best to look into your local mechanic's lien laws to ensure you abide by the deadline.
If your state requires you to send a preliminary notice but you don't, you'll lose your right to file a lien on your project.

Follow Deadlines

You must send all notices and file any liens in the timeline that is framed out through your state's mechanics lien laws. When you file paperwork after your deadline, there's a good chance your lien rights have been forfeited.

Lien rights are a great way to keep construction project workers from losing their own money in a project. If you want to make sure you're doing everything you can to keep your lien rights, contact Nationwide Notice, Inc. We'll help ensure all your paperwork is filed correctly and on time based on your local laws so you can be protected by your right to file a lien if the need presents itself.
Nationwide Notice, Inc. focuses on assisting construction companies to get their construction payments. Our goal is always to protect receivables, no matter the size or kind of construction company. As a self-service and full-service lien service and preliminary notice company, that's just what we do. To learn more about Nationwide Notice, Inc, check out our main website here, or click this link to learn about our process.