Liens Make Your Payment Problem the Entire Project’s Biggest Problem
On May 27, 2010| Email This |  Comments (6) |
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When you don’t get paid on a construction project, that is a big problem for you and your company. But, is it a big problem for the entire construction project? Not likely.
So, how do you make your problem an important problem to the other players working on a construction job? With a mechanic’s lien, of course.
The Wall Street Journal recently reported on a mega-project in Las Vegas (the $8.5 billion City Center), and a contractor dispute that is affecting the project’s finances. There was something really interesting about this report for those of us who follow mechanic lien law and news – and that’s this quote from City Center President Bobby Baldwin, referring to over $500 million in liens filed against the project:
Obviously everybody is concerned about the liens. They have to be explained in great detail to our residential buyers.
To resolve the concern about the liens, the property owner is slowly paying off all of the subcontractor and supplier claims while they proceed with their dispute against the prime contractor. Without those liens, those subs and suppliers would have to wait months or years for the main dispute to resolve, and payment to trickle down from the owner to them. Depending on the size of the contract, that’s something that could cripple their business.
The Wall Street Journal article and construction dispute at the City Center was the subject of a blog post on the Construction Law Monitor, which that blog called a “Large-Scale Example of an Everyday Construction Dispute.” And that summary is perfectly true when it comes down to mechanics liens.
Regardless of how large or how small the project, mechanics liens creates a problem for the project. If you’re not paid on a construction project, the best way to make your problem the construction project’s problem, is to file a mechanics lien.
Interesting how this particular dispute is playing out. Check out an update from the National Association of Credit Management, which reports that the subs are now getting paid by the owner directly! Further proof that liens work.
http://www.nacm.org/index.php?option=com_content&view=article&id=867:story-update-mgm-mirage-sidestepping-gc-to-make-nice-with-subcontractors&catid=135:construction-&Itemid=377
[...] This is a perfect storm of aggravation to the project and the parties working on the project, that frequently results in getting you paid without any action beyond filing the lien. See how it worked on the MGM Project in Vegas here. [...]
[...] This is a perfect storm of aggravation to the project and the parties working on the project, that frequently results in getting you paid without any action beyond filing the lien. See how it worked on the MGM Project in Vegas here. [...]
[...] This is a perfect storm of aggravation to the project and the parties working on the project, that frequently results in getting you paid without any action beyond filing the lien. See how it worked on the MGM Project in Vegas here. [...]
[...] few months ago we posted about a mega-project in Las Vegas facing financing troubles and leading to over $500,000,000 in mechanic liens. The point? Even on the biggest of projects, mechanic liens transform your payment problem [...]
[...] titled the post: Liens Make Your Payment Problem the Entire Project’s Biggest Problem. That post was really written to the subcontractors/suppliers, demonstrating that when a [...]