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When I file a lien claim does that hurt my customer's credit?

FloridaMechanics LienPayment Disputes

As a company we have just started filing lien claims through zlien. We want to know exactly what harm we are doing our customer and their landlords when we file these lien claims. I am wondering if the negative effects are immediate with the lien claim or if their credit is not hurt until we take it to court. Thank you

1 reply

Dec 13, 2017
That's a great question, and it's one we get fairly often. As for the immediate effect of filing a lien - a lien places a cloud on the owner's title. Once a lien is filed, transferring the property and borrowing money against the property becomes much more burdensome once the property is encumbered. As for a lien filed pursuant to work done at the request of a tenant, a lien claim will often put a tenant at risk of breaching their lease agreement. However, the tenant is often afforded time to resolve the issue either pursuant to terms of the lease agreement or by leniency afforded by a landlord. The act of filing the lien itself will likely not appear immediately on a credit report, but foreclosure of the lien will. For filing, it's tough to know precisely if or when it could appear - the reporting of the lien for credit scoring can vary for each individual situation. Filing mechanics liens can definitely affect relationships, though, which is why zlien strongly recommends a proactive approach that keeps all parties to a project informed every step of the way while also preserving lien rights. Often, showing that you mean business through some combination of required and voluntary notices (such as preliminary notice, notice of intent to lien, and notice of intent to foreclose) will be enough to spur payment before filing or foreclosing lien is necessary. Filing (or foreclosing) a lien should not be done "willy-nilly," but the remedy is there for a reason - to make sure you get paid.
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