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South CarolinaMechanics LienNotice of Intent to LienRecovery OptionsRight to LienSlow Payment

Can we stop work if we have not been paid for invoices dating 30 days or more?

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Jan 27, 2020
Generally, the right to stop work due to nonpayment will come down to the terms of the contract. If the contract has specific provisions relating to the ability to stop work - then the terms of the contract should be followed. If the contract is silent as to the ability to stop work, things get murkier. It makes sense to want to stop work when payments aren't being made, as required. And, it's understandable that an unpaid party would think they're entitled to walk off the job since they haven't been paid. However, it's possible to actually compound your problems by improperly walking off the job - especially if the contract doesn't specifically allow for that remedy. Walking off the job could actually give rise to claims against the unpaid party and even create a breach of their contract. Levelset discusses that in further detail here: Construction Questions – Should You Walk Off the Job If Not Paid?

Recovering payment without walking off the job

Below are some different recovery tools that might be a better starting point for recovering payment before simply walking off the job.

Threatening to stop work

Stopping work is a drastic response to nonpayment, but it's one that might be able to get you paid. But, if you're considering walking off the job, it might be helpful to first threaten to stop your work. By letting the customer know you're prepared to leave the job if you're not paid, at least that'd provide an opportunity to resolve the matter before the issue escalates. You can find a basic, downloadable template for such a threat here: Notice of Intent to Suspend Work (General) Form.

Invoice reminders

When invoices aren't being paid on time, sending invoice reminders can provide a gentle nudge in the right direction. It simply reminds the recipient that payment is outstanding and must be paid.

Demand letters

Sometimes, escalating a dispute a bit might be in order. In that case, sending a payment demand letter could be effective. Demand letters will generally contain legal threats and create a strict timeline for making payment. If the timeline isn't followed, the demand letter will state that the threats will be undertaken, as necessary.

Notice of Intent to Lien

Mechanics liens are really strong payment recovery tools, making the mere threat of a lien claim powerful, too. Sending a document like a Notice of Intent to Lien can be an effective way to get the attention of the customer, the property owner, and whoever else a claimant might want to send the notice to. Because of the effect that a lien claim will have on these parties, the potential for a claim typically can't be ignored - bringing attention (and hopefully a resolution) to the dispute.

Pursuing a mechanics lien claim

Finally, nobody likes mechanics liens - but they get the job done. Filing a lien claim will usually result in receiving payment, and when push comes to shove, they're available to make sure construction businesses are paid what they're owed. What's more, filing a lien claim will generally not result in a breach of contract because no lien clauses are, by and large, unenforceable. What's more, claimants are generally entitled to continue work even after they've filed a lien claim. Practically, it's common for a customer to suspend the claimant's work as a result of a lien dispute - but, at least at that point, the suspension of work is on the customer's terms, and the potential for liability for something like breach would seem to diminish. For more on how to pursue a South Carolina lien claims: - How to File a South Carolina Mechanics Lien – Step by Step Guide to Get You Paid - South Carolina Mechanics Lien Guide and FAQs
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