Get Results With A Construction Lien

Possible Consequences of A Construction Lien

Most, if not all, property owners are unaware of the consequences of having a lien filed upon their property.  Say they pay the prime contractor they hired in full and the contractor fails to pay those he has hired independently- the owner could still owe money to those workers even after paying the prime contractor.

How is that obligation enforced?   Well, a number of possible ways.

If a lien is filed on a particular property and/or parcel number and the property is later sold, for example, money received in the sale could actually be tied up and placed in escrow because of a mechanics lien filing.   Here are some other possible consequences of a mechanic’s lien:

- Sale can be forced on the property in order to pay for the debt (called a foreclosure of mechanics lien)
- Payment owed to contractor can be increased by attorneys fees and penalties
- Inability to borrow against the property or refinance
- Flag on the title of the property

Of course, each state is different in how mechanics liens are filed and treated.   It’s important to consult with an attorney and the laws of your state to get a full grip on how the mechanic’s lien process can help you.

What’s Key to Filing a Mechanics Lien?

On a Construction Project… deadlines are everything. This is especially true when it comes to your companies right to file mechanics liens.

Is a preliminary notice due? How long do you have to file a lien? When must a lien be foreclosed?

Let us introduce to you an industry leading web-based lien document and deadline management solution: The Lien Pilot.

Our system is easy-to-use…and absolutely free. Track and control your project data, important lien and notice deadlines, project contacts and more. Here are a few features of our proprietary Lien Pilot:

- Automatically calculate lien deadlines, preliminary notice deadlines, and even create custom deadlines
- Get RSS Feed reminders when deadlines are due
- Manage project contacts, job-site data, legal property descriptions and more
- Manage lien documents
- Easy access to an Express Lien Wizard who (for a flat fee) can prepare and file liens, notices, cancellations and more

Learn more about how our Lien Management software works on the “How Express Lien Works” page.

Lien on Property or Lien on Funds? It’s Two Different Collection Tools

Liens are one of the most powerful collection tools available to workers in the construction industry. Mechanics Liens are inexpensive and hard-hitting, and perhaps one of the most effective ways to collect on non-paying projects.

A properly filed construction lien can affect a property’s title, entangles multiple parties to your dispute, and helps get you paid.  Suppliers, prime/sub/sub-sub contractors and laborers all have the rights to lien a property they performed work on.

Bradley Coxe  Hodges & Coxe, PC law firm wrote some basic information within JD Supra explaining the two broad types of a mechanics’ lien-  the property or funds lien.

Property liens are the most popular and widely used in each state.  The homeowner is responsible for getting the worker paid for his completed job.  This, when filed and recorded correctly within the respective county or parish places a hold on the owner’s land preventing them from selling or turning over until the matter is determined by the courts.

The second type of lien is the lien on funds; which is when the payor, not the owner, is responsible to pay for the work.  Whomever performed work on the property that was not contracted directly with the owner can send a notice to the owner letting them know 1- they have not been paid  and 2- they should not pay whomever is in charge of getting the money (in most cases, this is the prime or general contractor)  The funds that are owed to the general or prime contractor is what has been liened.  If the general contractor has been paid after a notice was supplied to the owner, a sub-contractor can then lien the property.

Lien Smarter….Get Paid.

What Are the Chances of Getting Paid After Filing A Lien?

In today’s economic climate, payment problems are plaguing construction projects.

Just recently, a prospective customer called us and asked:  what are the chances of getting paid after filing a lien?

Unfortunately, it’s impossible to provide a success percentage because each situation is different.

However, mechanics liens are far and away one of the most effective ways to secure payment for your company.

To put it simply then, we can only point out the obvious in response to this question.   The obvious answer is that filing a mechanics lien is a first, and oftentimes necessary, step to get paid on a problem project.

Without a recorded lien, your company is simply a bystander to the project’s payment obligations, and is pinning its company’s rights to payment on good fortune.

Filing a construction lien isn’t extraordinarily expensive, and it’s a step in the right direction for your organization.  Get to know the lien deadlines and laws for the state where you performed work, and then make a move to protect your company by securing your lien.

File a lien today and get payment to come your way!  Lien SMARTER…..to get paid.

Free Lien Laws, Resources & Forms Now Available

Over the past few weeks, Express Lien has been improving the design and function of its website. As reported through a separate release, we’ve added the new LienWizard to guide visitors through the lien process and the ordering of notices, liens and more. We’ve also added a “How Express Lien Works” page as a comprehensive support site, where users can watch videos and screencast tutorials on how Express Lien can help companies Lien Smarter.

We’re now happy to announce to our visitors that the “Our Services” section of the website has been launched.

This section of the site not only explains to visitors the services provided by Express Lien, but it also provides free state-by-state lien law resources.

The site summarizes the notice requirements and lien deadlines for each state, provides you valuable links to other other resources on the web related to that state’s lien laws, has a collection of free lien and notice forms for easy download, and even provides you with a directory of some of that state’s construction attorneys.

The new services portion of ExpressLien.com is just another way for our company to help you Lien Smarter.

When A/R Is No Longer Considered An Asset & Filing A Lien Is.

Everyone knows Accounts Receivables are supposed to be considered assets but are they always?

Company A sells a large item or provides services to Company B.  This item/service that Company B purchased is something that adds value to the existing property or business or maybe it was for resale.  That is a factor we will determine later.

Company B fails to pay for this item/service in the agreed amount of time that was set with Company A. As time takes its course,  Company A continuously calls, faxes, and emails requests for payment, which has fallen on Company B’s deaf ears.  It is only a matter of time before beating this dead horse costs you more in employee time than going to court to recover your losses would cost.  (Thus the “no longer an asset” assumption.)

What options does Company A have to get it’s money or material back? Depending on what state you reside in, or state that you sold your item out of, you have a few options.

Option A- You can keep with the old fashion collection process. Keep making phone calls, sending faxes of the past due invoice, and emailing polite but firm requests for payment.

Option B- File a lien. If you have installed something of value into a home or business, you can file a lien on the homeowners property.  If you fixed something, even if it is not a car, you can file a mechanics lien.  This is time consuming and you must follow an order of operations by state within a time line.  Even then, this action keeps the homeowner from obtaining a loan or selling their house.

Option C- Run to a law office for collection.  Good luck with that.  If you want to recover any resemblance to the original amount due on the original invoice, I would not recommmend this option.

Read What We Read

All day long, we scour the internet for information on construction liens, lien notices, lien laws and more.  While we post on this blog about certain construction lien news and legal updates, we can’t get around to posting about everything.

However, whenever we run across something great, we share it on Twitter or through Google Reader.  Interested in reading what we read, and learning more about construction liens and laws?   Subscribe to our Google Reader shared articles page (jen’s) (scott’s), or follow us on Twitter.

Know of a cool trade magazine, publication or other RSS Feed that we should be reading?   Let us know!

Be Careful When Using Free Legal Forms

Gerard Simington with “FindAnAttorneyForMe.com” published an informative article that warns businesses about using free legal forms found on the internet.

The Internet has placed legal information and legal forms at our fingertips – and its easy to forget sometimes that the law is a very complicated subject, and legal forms are no exception.  While a legal form may seem simple on its face, the blanks can carry significant legal consequences.

It’s always great to hire an attorney to draft legal documents from scratch, or to “tweak” legal forms to fit your particular need.   The costs associated with legal counsel, however, are simply sometimes out of your business’ reach.

Legal Document preparation services like Express Lien are perfect for these situations.  Our staffs of professionals are familiar with the forms that relate to your construction project, and we can help you draft & file your forms properly and avoid costly mistakes.