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.”

Filing Mistake Invalidates $12.4 Million Mechanics Lien

Mechanic lien laws are highly technical, and they frequently change in unpredictable ways  (see recent controversial example from Washington).   We’ve expressed the sentiment a hundred times on this mechanics lien blog – it’s very easy to make a common lien mistake.

Unfortunately for JE Dunn Construction Co., it seems someone may have really dropped the ball filing its $12.4 Million mechanics lien.   The developer of a stalled West Edge project in Kansas City now claims the construction company’s mega-lien has a mistake that invalidates it.

When it comes to filing a mechanics lien, sometimes you only get one chance to get it right. Depending on the merit of  the developer’s claim, JE Dunn Construction Co. may have gotten a very frustrating and expensive lesson about the technical nature of mechanics liens.

From the press, it looks like the lien would have converted the debt from an unsecured claim into a secured claim in the bankruptcy proceedings pending on the West Edge project.   Without the lien, the claim falls to an unsecured one, making collection a lot less likely.  That makes this lien mistake one of the country’s most expensive.

What Could Have Went Wrong?

What could have went wrong with the mechanics lien, you ask?   What kind of mistake could invalidate such a big claim?

Funny enough, the biggest claims in the world can be invalidated by just the simplest and most technical oversight.  Here are examples of common filing errors that could have cost JE Dunn Construction Co. its secured claim:

• Poorly Identifying the Property: Most states require the use of a legal property description, and others require specific descriptions of the property.   In every state, the requirement is technical, and a lien can be invalidated because of an inadequate description.  (See article about describing properties on mechanic liens).
• Signing Mistakes: Mechanic liens must be signed in a particular way.   Some states require they be notarized, some states require a verification with specific and statutory language.  The smallest waiver from these requirements can result in the mechanics lien being invalidated.  (See article on Washington lien invalidated because of verification error)
• Not Sending Notice:   Some states require notice when you begin work.  Some states require notice immediately before filing a mechanics lien.  Some states require notice immediately after filing a lien.   Failing to deliver this notice, can forfeit your mechanic lien rights.  (See blog posts about preliminary and other notices)

Who is Filing Your Mechanics Lien?

Express Lien is not a law firm, and let us be the first to tell you that if you are about to file a $12.4 Million mechanics lien, you have no business filing it without the counsel of a qualified and experienced construction attorney.   That is big money, and it’s certainly worth spending a few thousand dollars on counseling.

However, there are occasions when it doesn’t make financial or practical sense to hire an attorney to file a mechanic’s lien.  That’s when we really shine.   And some law firms - like this one in Georgia – have even recommended using a lien service to file a construction lien in the right circumstances.

What’s great about our service?   Take a look at this page which explains why you trust choose us to file your mechanics lien.

Our service is licensed, insured, bonded and experienced.

Did You Know…You Can Insure Against Non-Payment

Construction Indemnity offers a real revolutionary product for the construction industry:  payment insurance.    Yes, you’re reading this correctly.   You can now purchase an insurance policy to protect your organization against non-paying projects.

Here’s the pitch:   Getting paid is one of the biggest challenges to those in the construction industry.   Construction Indemnity Group insures that your company is paid the money you’ve earned.   When you’re not paid, you make a claim against your policy.   Construction Indemnity spreads the risk across multiple contractors, and you assign them your lien and collection rights and let them do the hard (and expensive) work of collecting amounts due.

Their website sums up the policy’s offering and cost with this:

For around $1000 annually (plus cost and fees) with only $150 down and guaranteed payment plans, CIG can provide you $25,000 worth of coverage annually against non-payment by your customer.

This is a real neat product.   And I think it fills a real serious need for those contractors and suppliers who perform work or provide materials on construction projects but only have a few thousand (or up to $25k) of outstanding debt on any single project.

As an attorney, I have potential clients approach me to help collect these types of debts all the time.   The trouble is that the cost of collection and risk of non-collection is too high.    These companies frequently walk away from the account and lose the money.    Over on the Construction Law Monitor blog operated by my firm, Wolfe Law Group, we have an entire section devoted to Collections laws and techniques, and we frequently discuss this practical burden to successfully collecting on a marginally small debt.

But just because the number is small when compared to the cost of collecting doesn’t mean its small to you or your company.   To the contrary, they mean everything.

Construction Indemnity has a neat calculator on its website titled “See How Much Bad Debt is Costing You.”   It’s eye-opening.   Put in the amount of bad debt you have per year and your typical profit margin, and the site calculates the sales you need to replace your bad debt.   Let’s take something small ($25k of bad debt), and a typical profit margin (5%), and get a dose of reality:  You need $500,000 in sales to replace this bad debt.

Construction Indemnity lets you insure it for approximately $1,000.00 a year.

This is not to mention that policyholders are eligible for savings on certain industry services.   Express Lien is proud to have a marketing relationship with Construction Indemnity Group, providing its policyholders a discount of at least 20% on all of our products and services.    Policyholders also get a discount to Lien Law Online, which is a real neat online service providing folks with legal information about construction lien laws nationwide.

Get more information about Construction Indemnity Group here, or click here to submit an application.

Contractor files $3 Million Lien in North Carolina

If you think your company is in the hole, your heart must really go out to John S. Clark Construction in Winston-Salem, NC, who on June 23, 2009, filed a $3.1 million lien against a condominium developer.

This is a good reminder that liens can be as small or as big as the project’s debt to a company, from $1 to $3.1 million.

Just be sure to avoid making common mistakes, send your notices and file on time.

Express Lien has experience filing liens that are more than $1,000,000, and can help get your company’s lien on country or parish records.   Use the Construction Lien Blog and the online lien filing tools that comes free with your account to help understand the lien laws and requirements in your state.

Click here, and learn more about how we can help you Lien Smarter…and Get Paid.

Construction Outlook Grim through 2010 – Staying Ahead of Accounts Receivables To Retain Its Importance

Ken Simonson, the chief economist for the Associated General Contractors of America, doesn’t have good news for the construction industry as the challenging year 2009 drags into its 3rd Quarter.

According to Simonson, the commercial construction industry forecast remains grim “at least through 2010.”

For contractors, suppliers, and other construction professionals throughout the nation, this means that good record-keeping and collection practices remain important.

Almost one year ago, Wolfe Law Group posted an article on its Construction Law Monitor after Ken Simonson reported that 2009 would present economic challenges to contractors.

Now more than ever, the article stated, contractors should consider the benefits of a construction or mechanics lien.  The article went on to state:

As soon as the construction project comes to a halt or payment is late, contractors, subcontractors and suppliers should rush to file its construction / mechanics lien to protect its interest in the property. Construction liens are available in virtually every state, and works to transform the project job site as a sort of “collateral” to the contractor for its payment.

The time available to file a construction lien is not indefinite, and the legal requirements should be followed to the letter. However, when filed correctly, a construction lien can help your company recover payment for its project.

Although the stimulus spending will be cause for some optimism in the construction industry, it appears economic struggles will stick around into 2010.    And the recommendations of Wolfe Law Group in 2009 are repeated today.

If your company is awaiting payment, file your lien with Express Lien today.   Lien Smarter…Get Paid.

Good and Bad News Regarding California Public Construction Projects

Last month, we reported problems in California where the government’s spending freeze affected thousands of public construction projects, and an enormous amount of contractors and laborers.  Today, the San Francisco Chronicle has mixed news regarding this problem – as California is pumping money to salvage some of these projects, but more money is still needed.

The article states that 276 of the problem projects will be allowed to continue work (for now), because “shutting them down  would cost more than it would take to complete the jobs.”

But the problem is far from over, as the article goes on to warn:

But state officials warned that if the governor and the Legislature are unable to find a solution to California’s $42 billion budget deficit by the end of this month, the remainder of the work could end.

A full list of the affected projects can be read here:

http://www.signonsandiego.com/news/state/images/081217pmib_impact.pdf

If you and your company are working on a public project affected by this spending freeze, you will want to file a Stop Notice to preserve your rights to Get Paid for work performed.

GA Firm Recommends Using A Lien Filing Service

Penessa & Associates, LLC, a Georgia law firm that practices construction law, recommends on its website that contractors, suppliers and other construction professionals use a lien filing service to file liens.

Here’s what they say here:

The best advice that we believe that we can give a Georgia contractor on filing a lien in Georgia is to hire a professional lien filing service.

Georgia lien law is based on statute and one must follow the rules of the Georgia lien law statute to the letter for the Georgia lien to be valid.

It has been the experience of this law firm that liens can be filed most cost-effectively and correctly through the use of a lien filing service. Contractors who do not have requisite experience can miss a key requirment in Georgia lien law and the lien can be filed with mistake that goes unnoticed until after the time has passed to file a valid Georgia construction lien. A professional lien service charges much less than what a construction lawyer will charge for this very important service.

Express Lien is a professional lien filing service that files liens in Georgia, and across the country.  We’re bonded and insured, and we’re a licensed legal document preparation company in Los Angelos County.   For more information on Express Lien and why we’re best situated to help your company, click here.

Will the 2009 Economy Create More Mechanic Lien Filings?

At the Construction Lien Blog, we’ve written about the current state of the economy in America, and how this has affected the construction industry from coast-to-coast.

However, there is recent conversation in the media and out in the blog-o-sphere that the economy’s impact on construction has increased the amount of mechanic’s liens filed by contractors.

The Pacific Business News source in St. Louis, for example, has a story on a construction attorney in Missouri who says that he filed twice as many liens in 2008 as he did in 2007.

A similar article appears in the Virginia Lawyers Weekly, which reports that construction litigation in general is increasing in the current economy, with increased claims for construction delays, defects and problems with collections.

It seems that the business journals are full of stories about construction projects being slammed with liens, like the story here and here.

As the new year approaches, what will we see in the construction industry that is predicted to remain pretty stagnet?

One thing is for sure, regardless of whether lien filings increase, decrease or stay the same, with the current credit crunch and economic woes, it’s more important than ever to file liens on claims you do have, and to do it timely and properly.

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.

California Freezes Funds for Public Projects

The San Diego Union-Tribune reports that with the state nearly broke, California has frozen nearly $4 billion worth of loans for public building projects.    The unprecedented move is expected to halt construction all over the state – and inevitably, leave contractors, subcontractors and suppliers bickering with one another about outstanding payments and work.

With an estimated more than 200,000 works affected by the funding freeze, it’s likely that even California laborers will find themselves with claims for unpaid wages.

If you and your company are working on a public project affected by this spending freeze, you will want to file a Stop Notice to preserve your rights to Get Paid for work performed.

A full list of affected projects is available here:  http://www.signonsandiego.com/news/state/images/081217pmib_impact.pdf