For folks in the construction industry, a mechanics lien is one of the most valuable tools for getting paid. Every state has mechanics lien laws that protect construction professionals facing nonpayment by granting them the right to file a lien.
A construction business’s lien rights depend on their ability to follow their state’s mechanics lien requirements. These include deadlines and important steps like sending preliminary notices and notices of intent. Though this process can look different depending on what state you’re in, the importance of lien rights in securing your business is universal.
With this in mind, we asked construction lawyers across the country to weigh in on the importance of protecting lien rights. These lawyers have been helping their construction customers get paid for the work they do for years, and here they share their experience and insight on a range of topics, from developing good workplace processes, to pitfalls of missing deadlines, and how to best empower your business to get paid. Read on to see what they have to say.
Chris Ng | Los Angeles, CA | 19 years of experience
“It’s about leverage and security. In our business, where we have a lot of handshake deals—and that’s how it’s been done for many, many years—lien rights give you the ability to maintain your security, [and] make sure that you get paid if for any reason the wheels come off the bus.
“[It] gives you the leverage to make sure you control the outcome. So anytime you decide to forgo those rights by not doing a preliminary notice or engaging in a required step in the process to make sure that you have lien rights, you are putting yourself at risk, and in this day in age that’s not generally a good or wise thing to do.”
Cathleen Curl | Millbrae, CA | 41 years of experience
“Contractors should always protect their lien rights. It’s one of the best remedies that a contractor has to get paid.
“Very few other businesses have that ability or right, because the remedy is to sell the property if you get a judgement so that your debt can be satisfied.”
Adam Richards | Miami, FL | 10 years of experience
“If you’re dealing with a private job, where there are lien rights because the particular project is not bonded, then you need to make sure that you’re preserving your lien rights every step of the way.
“Quite frankly, [you should] have a process internally to make sure project by project you understand whether you have lien rights and what your timing with respect to preserving and enforcing those lien rights are.
“I can’t reiterate enough how important it is to make sure that process is in place so that you have no problems enforcing your liens. In Florida, and I’m sure it’s the same in various other states as well, the lien statutes are strictly enforced. So if you miss a day, if you’re one day late, if you miss another potential notice requirement, you will be precluded from enforcing your lien, and you’ll even open yourself up to potential counter-claims with respect to your lien.”
David Tran | Los Alamitos, CA | 23 years of experience
“The old adage is strong fences make for good neighbors, and the same applies to lien rights. You do all the steps that are required to protect your lien rights and it is most often a signal to the other side that this contractor knows what they’re doing and I shouldn’t waste my time and energy trying to pull a fast one over them.
“If there’s going to be an allocation between who gets paid and who doesn’t get paid, the people that do the right thing, that take the right steps, pay them off first. The people that don’t take the steps to protect their rights, you have more room to negotiate a better deal against those people.”
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