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What can I do about a commercial property owng my business money>

OhioMechanics LienNotice of Intent to LienRecovery Options

I need some help with a client that owes me money. I am a very small business and I have a client that has defaulted on their invoices and payments and now they are selling the commercial property. I service two separate properties here in Columbus and the owners of both properties are in Michigan. They own multiple apartment complexes in several states. They are selling this one as I believe they feel if was a bad investment. They paid me once... But have $13,000 or so in unpaid invoices between the two properties.

1 reply

May 28, 2019
I'm sorry to hear you've had problems with this project, and no one should have to go through the wringer just to be paid what they've earned. That being said, there are always options to help recover construction payments.

The most powerful tool to recover construction payment, especially in the face of a potential sale, might be the mechanics lien. Mechanics liens directly affect the title of the property where work was performed, and because it clouds the property title, a mechanics lien will make it harder to sell the property or to take a loan against it. Specifically, mechanics liens serve as an indication to prospective buyers (and, more importantly, their mortgage and title companies) that there's a dispute present, and that the dispute could undermine a future mortgage. As a result, most mortgage providers and title companies will require a lien be resolved before moving forward, and most prospective buyers will want the same, too. So, be it directly or indirectly, liens often force owners to make payment before selling their property. For more information on mechanics liens and how they work, this resource will be valuable: How Do Mechanics Liens Work? 17 Ways a Lien Gets You Paid.

Because mechanics liens are such a powerful tool, the mere threat of a lien claim can be enough to get paid. By sending a document like a Notice of Intent to Lien to a property owner, a potential claimant can show that they refuse to go unpaid for their work, and that they're willing to do what it takes to secure payment. Because mechanics liens can have such a drastic effect on the owner, they may be more likely to talk payment if they know a lien is on the horizon. Plus, a Notice of Intent to Lien can still be sent regardless of whether a claimant can or will move forward with their lien. For more on that idea, this resource will be helpful: What is a Notice of Intent to Lien, and How Do They Work?.

Finally, there are always other payment recovery options outside of the mechanics lien process. Threatening to take legal action, or actually taking that action, can lead to payment - and options like breach of contract, unjust enrichment, or a claim under prompt payment laws might work to force payment.

For more information about Ohio's mechanics lien laws, including crucial notice and deadline requirements, this resource will help: Ohio Lien & Notice Overview and FAQs.
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