Payment Insurance: An Alternative To Mechanic Lien Litigation

Sometimes, you get paid without filing a lien.   Sometimes, you get paid immediately after filing a lien.   We all know and fear those other times, however.   Those times when you don’t get paid and you must file a lawsuit to enforce the mechanics lien.

In the past, we’ve written about a remarkable new insurance product from Construction Indemnity Group:  Payment insurance.

How does it work?   Well, in words, you buy a policy for about $1000, and that gives you $25,000.00 of coverage annually.   If you’re not paid on a project, you file your lien and make a claim.   Construction Indemnity Group will pay the amount you’re owed, and they will go through the mechanics of enforcing the mechanics lien.   You just go about your business.

How does it work in video?!    Construction Indemnity Group just published a short video explaining the service, and I recommend watching it.   Here it is:

Preserving and Executing Lien Rights Leads to Prompt Payment

Contractors and suppliers have a remarkable collections remedy at their fingertips:   the mechanic’s lien.    But as we’ve (and countless others @constructionlaw @timrhughes @myconstructlaw @matthewdevries) have warned a thousand times…the lien laws vary state-by-state, and they are highly complex.

Preserving those lien rights by promptly and properly filing a preliminary notice, notice to owner, or other type of required construction notice is critical.   Thereafter, timely recording your mechanics lien or public bond claim is also critical.

With all the legal complications and technicalities, some contractors and suppliers may wonder whether the mechanic lien is worth all the trouble?

Yesterday, Walter Duke at the Texas Construction Law Blog may have tendered an answer to this question.   His post, 4 Practical Steps to Help Ensure Prompt Payment, does a great job of focusing the non-payment issue onto four practical efforts.    One of those four important steps?    You guessed it…the mechanics lien.

Here is the praise Walter gives the mechanic lien in his post:

Mechanics liens are one of the easiest ways to ensure payment on a construction project, and yet they are one of the most commonly botched practices among contractors. All other tricks for getting paid on a project rely on the willingness, ability, and legal obligation of another party to pay up.  Liens, on the other hand, place your remedy in the land and its improvements (which, in theory, always have intrinsic value).

I thought this was a nice concise summary of why the mechanic lien is so powerful, and so frequently works.    Rather than regurgitating Walter’s post here, take a look at it on his blog in full to see more of his thoughts on mechanic liens, and the 3 other practical steps to help ensure prompt payment.

Construction Management in the Clouds with the LienPilot

ConstructTech published an article last week titled “Construction in the Clouds.” It’s not the first time the magazine has spoken about web-based applications used by contractors, nor is the first time the topic has come up with others. And it won’t be the last.

The ConstructTech article closes with this summary, which identifies some real positives to choosing a cloud-computing platform over traditional desktop software:

Overall, cloud computing helps construction companies focus on what they do best–construction–while lessening the burden of deploying and managing IT. In times where cost control is paramount to success, contractors should at least be investigating whether or not such an option would be an ideal fit for their organization.

Most of the web-applications discussed in this article are of the project management sorts. And these are important to help manage construction projects.

When it comes to getting paid, though, how does your company manage its preliminary notices and notices to owner? How does your company manage and organize the lien requirements that vary by state? And how does your staff know when its time to file a mechanic’s lien?

Likely, you’ve been flying by the seat of your pants. Or, maybe worse, you’ve been working with clunky out-of-date software that is unreliable, and stuck on that ex-employee’s computer for years.

As ConstructTech states in its article, cloud-computing is changing the way construction companies are managed…and for the better.

The LienPilot is a cloud-based application that can help your company manage its receivables, delivery preliminary and notices to owner, and simply Lien Smarter. Learn how here.

I Didn’t File My Lien On Time…Now What?

Over the weekend, I answered a question over on Avvo.com about mechanic liens that gets asked very often, and I thought it was a good idea to share here.

The question is this:   What are my legal rights as a contractor if my lien is not filed on time?

The question was asked related to Washington law, but the answer is applicable around the nation.   Mechanic liens are an excellent remedy – and I highly recommend preserving and using these rights when needed.   However, they are not a contractor’s only remedy.

What other rights does a contractor have?  Take a look at my answer here:

Liens are a terrific remedy for contractors. If you’re unpaid and file your lien on time, you acquire security rights against the property itself and are legally able to file suit against parties who you did NOT contract with (i.e. the property owner, if you are a sub).

However, if you don’t file a lien, you still have plenty of legal rights to recover what is owed to you.

Your rights, however, are exclusively against the party who you contract with. You have an action against them for breach of contract. The period to bring this suit is quite a bit longer, between 3-6 years, depending on the type of contract.*

*This is the statute for Washington.  Remember that the statute of limitations will be different depending on your state.

It’s important to contact a great construction attorney to bring a breach of contract suit if you are unpaid, and are too late to proceed with lien rights.    Find a construction attorney in your area at Avvo.com.

Zlien Partners with Avvo to Bring A Robust Legal Center to the LienPilot3

We just posted about the LienPilot’s brand new look.    Well, including in the overhaul is the addition of a Legal Center.   Every project administered by the LienPilot gets its very own Legal Center, where lien law information applicable to your specific project is displayed.

To make the Legal Center even more productive, we’ve partnered with Avvo.com, the world’s largest legal directory, to provide content from construction law attorneys around your project.   Still can’t find what you’re looking for?   You can ask an attorney from Avvo.com for legal advice…for free!

Take a look:

Chart Specific To Your Project

Aren’t you sick of charts and mechanic lien law digests that show you all the information you could possibly want to know about liens….but nothing about your specific project?   The LienPilot’s legal center solves this problem.  It learns about your project, and displays only the relevant info.   Starting with this chart.

The chart displays the Mechanic Lien Law and Preliminary Notice Requirements relevant to your project in an easy-to-read chart.

Free Forms

Underneath the chart in your project’s legal center are Mechanic Lien, Notice, Release and Lien Waiver forms that are applicable to your project (again, only stuff that applies to your project).    Download them with the click of a button, or don’t – they’ll always be there.

Ask A Lawyer For Free Legal Advice

Our Legal Center is not designed to be a substitute for good legal advice.   The Legal Center is providing you with information about mechanic lien laws in the project’s area, but you may still have some questions.   Well, through our partnership with Avvo.com, you can ask for legal advice from construction attorneys in your state.    The legal advice is absolutely free of charge, and you can ask your legal questions from right within our Legal Center.

Find Construction Attorneys Near Your Project

Is it time to raise the stakes and hire an attorney to collect your debt, or resolve your dispute?    Well, the Legal Center displays to you the Top 10 Construction Attorneys near the construction project. The rankings are provided by Avvo.  The Legal Center helps you hire great construction attorneys who are familiar with the laws and procedures near your project.

Deadline Explanations

The Legal Center also provides you with a list of deadlines calculated for your project, and explanations for each.

There’s More!

There’s even more to our Legal Center – we just couldn’t fit it all here.   Sign up for Free to get a Legal Center for your project, and Lien Smarter.

The LienPilot Has A New Look!

We’ve gutted our LienPilot and completely re-designed it with a new look!    The remodeling makes the service easier to use, and easier for you to find the features you need.   We call it LienPilot3.

No-Nonsense Navigation

We’re building a web application that your business can use to calculate and manage the Mechanic Lien and Preliminary Notice requirements across the United States.   The first order of business should be a navigation system that is productive and intuitive.    Check out #1 in the above-image, and our new Main Navigation Bar.   From any screen you can easily switch from one project to another by selecting it from the drop down, or access system-wide settings and information.   Want to go back to the home screen?  Just click on the LienPilot logo.

Get Help

Every page has these two icons:   The Help Chat and the Help Video.    Click on the video link to see a video tutorial on how to use the features of that particular page.  Click the chat icon to chat with someone from the Zlien team anytime during business hours.  If it’s after business hours, leave a message and someone will get right back to you.

Project Nicknames

Perhaps this was the most requested feature from users.   Sorry it took so long, but we finally delivered.   You can nickname any project by clicking on the “Set a Nickname For This Project” link.   Wherever the project is displayed in the Pilot, this nickname will appear.

Deadline Notification Improvements

Our deadline notifier is already an industry leader, notifying you of upcoming deadlines via email, by allowing you to download the deadlines into your calendar, or by letting you subscribe via RSS Feed.   The new deadline calculator screen makes it easier than ever to read the deadlines, it allows you to dismiss deadlines…and, for the biggest improvement, allows you to order any notice or lien document due with just one-click.

Click on the “Order This Document Now” link, and you’ll be sent straight to the Lien Wizard’s check out after confirming the order information.

In-Project Navigation

Previously, everything about your project was crammed on one page.   We’ve created in-page navigation with tabs, so you can get a clear and clean picture of what’s going on with your project.   Only look at the information you want to see.  Our next blog post will highlight our new Legal Center tab – one of the more robust improvements we’ve launched.

More Improvements Planned…

We’re excited to hear your feedback about the new look. We consider this to be the start of many improvements. We’re currently designing an easier way for you to get help when you need it and we’re also working on a number of performance improvements to make the LienPilot even faster.

Let us know what you think!

Not already using the LienPilot to manage the LienLaws across the country and manage your company’s deadlines and notice requirements? Sign Up Now — It’s Free.

Join the Zlien Fantasy Football Team

What can we say, being from New Orleans with the Saints as the reigning champions has us all excited about the 2010 NFL Football Season. That’s why we’ve gotten together with our friends at Wolfe Law Group and set up an NFL Fantasy Football League through Yahoo!

And we’re inviting participation from our clients, colleagues, readers and friends. To sign up, just click on this link and set up your team. You will need to know the password, and the password is “construction.”

I must warn you….the Zlien staff not only knows mechanics liens, we know football. So be prepared to lose.

Liens Are Just One Way To Collect Debt – Other Best Collection Practices

I love a great article about collection practices.   Not only is a topic I’ve written about in the past (see posts from this blog here, and from the Construction Law Monitor here), but it’s one of the more important topics for those in the construction industry.

Consider the “bad debt calculator” on Construction Indemnity Group’s website.  I love this calculator, because it puts the tragedy of bad debt in your face.   Take a modest amount of bad debt ($25,000), and a candid profit margin (5%), and you’ll see that it takes $500,000 of revenue to recover the lost income.   Amazing.

Last week, Melissa Brumback’s Construction Law in North Carolina blog posted a blog post with “8 Best Collection Practices.”   The article does a great job of hitting on the things you can do to minimize your bad debt – and things, that we’ve even said over and over:   Be careful when extending credit, have a written contract, and don’t let too much time pass before implementing your collection procedures.

These, of course, are just a few tips.  The post does a great job of enumerating each tip and discussing their importance, so there is not need for me to regurgitate it here…just take a look at Melissa’s post for more.

Assembly of Good Resources on Oregon Construction Liens

When you’re not paid on a construction project you turn to the Internet to find answers about collections and mechanics liens.  In 2010, it’s the natural thing to do.   When you’re sick, you turn to sites like WebMD.   When you’re not paid, you look to learn about efficient ways to collect, and you turn to sites like this one.

While we work hard to provide great  construction and mechanics lien resources, there’s no need for us to be greedy and re-publish every single feature of the mechanic lien laws.   There’s a lot of great information on other websites out there, and everyone once in a while, we find it useful to our readers to stop and point to those other resources.

This post does just that, as it relates to Oregon Mechanics Lien laws.

Let’s Start With Me

I know I just talked about not being self-centered when it comes to posting information, but there’s not harm in starting this post with a re-cap of the resources we’ve published here and elsewhere.

– The Lien Law Summary Sheet for Oregon

– The Construction Lien Blog’s posts concerning Oregon

– Avvo.com Legal Guide published by Scott Wolfe Jr. on Oregon Mechanic Liens

– The Northwest Construction Law Blog’s posts on Oregon Mechanic Liens and Construction Lien Laws.

Some Others

– An Associated General Contractors chapter in Oregon has published the Oregon Construction Lien Pamphlet.  The Pamphlet does an excellent job of summarizing some of the notice requirements in Oregon, which while not very complex, are very strict.   Oregon’s notice requirement is one of the fastest expiring anywhere in the country – while some states allow for 60 day notices (Washington), or 20 day notices (California), Oregon requires the Notice to Owner be sent within just 8 days!    So, better be on top of things.  This Pamphlet helps.

– I recently came across a service called “Deeper Web? (@about_law)”   From how things look to me, this website scans the web for relevant articles and information on a specific topic, and displays all the results in a magazine-like format in one location.  I’m not familiar enough with the website to say it works all the time…but, I am impressed with their “Special Report on Oregon Construction Lien Laws.”   Some neat things this site links to is the Oregon Contractors Board’s page for consumer help containing information on Oregon lien laws, and a great discussion on LinkedIn on whether a lien can be filed against someone who has filed for bankruptcy.

– No better place to get information on Oregon Lien Laws than from the horse’s mouth.   Here, that’s the Oregon Contractor’s Board.   Their website has a number of good publications that can help contractors and property owners, but most relevant here is the Construction Lien Pamphlet written “to inform contractors and consumers about Oregon’s construction lien laws.”

Where Have We Been? Fixing Server Problems

Wow – how time flies!   It has already been a month since our last blog post, and if you’re a client or frequent reader of the blog, you may have been wondering:   What have we been up to?

You may remember our website (http://zlienit.com) and blog going down two or three times in July, leaving many of our users and readers frustrated.   It made us quite frustrated, too, and since this wasn’t the first time we had problems with our GoDaddy Dedicated Servers (boooooo), we decided it was time for a change.

Over the past month, we’ve been working very hard to change servers for this blog and the Zlien service without losing any data, and with the minimal amount of downtime.    While it was a long haul, and there were some bumps, we’re happy to be finished with our move.

The website and blog are noticeably faster than before, and I can assure you – our service is more reliable than ever.

It’s a shame that the server switch took so much time and energy, and really made blogging and other updates difficult.   But, all is right with the world again, and we’ll be posting more regularly and rolling out some really awesome updates to the site.

Wait to you see what we have in store for our users in the next month…Stay tuned!