Lien rights management is an often misunderstood topic in the construction industry. At the end of the day, there are a lot of construction industry professionals, even long-time industry folks with years of experience, that have inaccurate perceptions or mistakenly held notions concerning what lien rights management is all about.
Why Would You Have to Explain Notices & Liens?
Because lien rights are complex and often misunderstood, Levelset’s customers and users frequently find themselves in a situation where they have to explain the importance of this practice to someone else, be it a single coworker or an entire team at their company, and other times, even to a customer.
Given the complexity of lien rights, we understand that this can be a somewhat daunting task.
Understanding Lien Rights – Common Questions
Typically, folks have to explain lien rights at their company for reasons such as:
- They have to explain to your boss that filing a lien is the best route to get paid
- The sales team thinks it’s a bad idea to send notices because it could be ‘bad for business’
- They just rolled this out to your company and need to get everyone on board
- They need someone at their company to ‘champion’ the transition and make the process run more smoothly
Explaining Lien Rights – Our Suggestions
#1: Be Proactive
Be proactive when explaining notice and lien rights to the rest of your company. Whether you’re sending a notice or filing a lien on your own for the first time, switching vendors, or taking an existing in-house process to a trusted partner, tell your team before you get started. No one likes being caught off guard when they receive a call or email from a customer asking why they received a notice. By letting your coworkers know from the start, they are all on the same page and ready to answer any questions customers may have about notices, liens or even waivers.
#2: Identify & Educate the Right People
Determine which department(s) and employees are the most likely to interact with notices & liens, and educate them first. This could be your office administrator, accounting department, credit team, customer service agents, or even your sales team. It really depends on how your company manages the process; however, regardless of which person or group is in charge of filing the documents and managing the process, remember that other folks may need to have conversations surrounding your lien process documents or help collect important information from customers.
Your sales team or perhaps your company admins are the folks most likely in charge of collecting and entering new contact or job information into your systems. At Levelset, we’ve helped companies train their customer service agents to give them the tools needed to answer incoming customer questions about notices, lien waivers, and next steps. We’ve also worked with sales teams to help them explain their company notice policy to their customers during the sales cycle and use this to nurture customer relationships and collect the right job information.
By getting these coworkers on board, you can ensure they are collecting the key job details needed to file documents such as:
- Physical address of the job site
- Type of project (such as commercial or residential)
- Your role on the job (are you a supplier, subcontractor, etc)
- Your customer’s name and address
- General contractor and lender information if applicable
#3: Focus on Increased Visibility & Collaboration
Make sure your team knows that notices are more than a collections tool! By sending notices on jobs, you are increasing your visibility, opening up communication with the general contractor, property owner and more, letting them know that you are an active participant on the job. By keeping everyone on the job in the loop from the start with notices, you can foster a collaboration-first mindset that will go a long way to help avoid payment disputes and miscommunications down the line.
#4: Show the Return on Investment
There are many benefits to using notices and liens to secure your project payments. This is not just another task or more paperwork added to someone’s job (and if anyone thinks that, use the tips from this article to educate them)! Let your team know that the major benefits of lien rights are to help your company:
Lien rights help you grow revenue by empowering you to pursue larger contracts and do business with higher-risk customers. You gain the peace of mind knowing that you already have a collections tool in place and will get paid.
Your company will get paid faster because sending a notice prioritizes your invoice. If your customers or other folks up the chain know that you have a lien right, they will make sure you get paid (and likely request a lien waiver in exchange for payment) to avoid a lien on the job.
By promoting visibility and collaboration, your company will build better relationships with your existing customers and prospects. Additionally, using lien rights as a collections tool is much better for your relationships than having to sue a company due to breach of contract or non-payment. Lien rights are a smarter tool to get paid and collaborate with other folks on the job hoping to get paid, just like you.