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The Most Common Lien Mistakes (and how you can avoid them)



Project Type


Experts in this video

Alec Matys
Alec Matys

Filing a lien is a powerful way for construction businesses to speed up payment, but if you make a mistake when creating or filing a lien you could completely miss out on your chance and end up wasting hours of time and money. 

Any mistake can forfeit your lien rights, adding insult to injury when you need those rights to resolve payment issues. But since the lien process is so complicated, mistakes are shockingly common. You’ll be surprised to learn about the mistakes you’ve probably been making all along. 

It’s time to put an end to that, so we’re hosting this webinar to get it all out on the table. Join us Thursday, June 10th to learn about common lien mistakes, and how to avoid them.

Join this webinar to learn:

  • The mistakes you might not know you’re making when filing a lien
  • Simple steps to filing a valid lien 
  • How software can help you get liens right


Alec Matys (00:29):
Hey everyone. Uh, thanks for joining the most common lean mistakes. I’m just going to give about a minute here to let everyone join. Um, we are recording and then any questions you have throw them in the chat and I’ll be getting to those at the end as well. [inaudible]

Alec Matys (01:20):
All right, so we’ll get going. Um, so yeah, this is the most common lean mistakes and how you can avoid them. Um, my name’s Alec Matys. I’m a construction payment expert here at Levelset. Um, I’ve helped thousands of contractors protect millions of dollars of payments, um, with avoiding these common mistakes that we’ll go over today. Um, I really enjoy coming to work because we do get people the money that they’ve earned. Um, it’s not always that there won’t be payment it’s that there’s slow payment and you want to make sure that that money is protected. Um, a little bit about Levelset before we dive into just the mistakes and kind of going over the informational things. Um, we’ll contractors get paid fast by protecting their lien rights. Um, we make sure that you’re tracking all your deadlines everything’s being researched and that if there’s any issues on the project that you’re escalating it to the correct parties.

Alec Matys (02:06):
Um, and as Barry put it here, Levelset gets us paid faster and now they can focus on customers instead of late payments. Um, it’s all about transparency having communication, uh, rather than issues arising down the road. Um, but today definitely gonna focus on the four most common lean mistakes that we see, uh, one being filing a lien without lien rights, to filing a lien with the wrong information, three filing a lien after the deadline and for not providing a warning before filing a lien. Um, well these are the most common, there’s obviously more that goes into it. Um, I do have a few bonus ones that I’ll throw out at the end right before we do questions. Um, so if you stick around to go over that, but if you cover these four, you should be good to go. Um, but always want to make sure that you’re staying on top of everything.

Alec Matys (02:51):
So the first one we’re going to dive into is going to be filing a lien without lien rights. So this is right of the beginning of a job, depending on what state you’re in, what your role is what’s required to protect lien rights is going to vary. So first off you could come to Levelset. Um, we have a ton of FAQ pages per each state on what’s required when it’s required. Um, you can look into your state statutes as well, but it’s very important to know what do we need to send to protect ourselves. So that, that way, if there’s an issue down the road that we know that we’ve done everything we could. Um, so if you’re a sub a supplier or even a GC, whatever that requirement is, you want to make sure that you’re covering that at the beginning and it doesn’t come back to bite you at the end.

Alec Matys (03:31):
Uh, mistake. Number two is going to be filing a lien with the wrong information. So if you know that you need to turn in maybe a preliminary notice or notice a furnishing or notice to owner at the beginning of a job, um, it is very important to know who that needs to go to. So in California, for example, it’s going to be, if you’re a sub, it needs to go to the GC, the owner and lender any on that project. If any of that information is incorrect, you could be thrown away all your lien rights right there. So knowing what you need to send and then searching all that information, just make sure whether it be through deed search or contractor database to know who’s on the job, um, or requesting it from the GC. Um, some GCs will withhold the information. So you want to research it.

Alec Matys (04:12):
And even sometimes GCs will give information that’s wrong, or an owner. If you’re working direct with them may just be a tenant. Just double-check all of that. So, you know, you’re turning in the right stuff to the right people, so that it’s all covered and you’re checking all the boxes. We do have a research team here, scout research, um, in case the legal property description is required to states such as Ohio or, uh, uh, Florida, other states that require legal property description. Um, again, you have that first layer of knowing who the owner is, where the mailing address actually is. You need that legal property description. Um, we do give that with our scout research team, you can come to us and get that information, or just doing some more research on your end again, making sure what’s required. What do we need to know here and making sure you’re checking those boxes.

Alec Matys (04:55):
So lean mistake, number three is going to be missing your lien filing deadline. So at this point, you know what you need to send, who it needs to go to. Everything’s correct. All the leverage now is sitting on when the deadline is, you do not want to let that pass because once it does, again, you might have turned in your preliminary notice and now you’re past a certain date and you can not file the lien. So making sure that you’re either calculating it, putting it on a calendar, um, we are going to share out our lean deadline calculator to make sure steps aren’t missed, um, but make sure you’re marking it and make sure that if you’re getting to that point, that you’re having communication, you know, what’s going on and you’re not just letting something pass. And then after the fact trying to go after your money and then mistake number four.

Alec Matys (05:39):
And this kind of goes into knowing when your deadline is, is not providing a warning before filing a lien. Some states require this such as like a Colorado, Ohio, Indiana, Illinois, and others, whether it’s required or not sending out a notice of intent to lien is very effective in avoiding having to do a lien all together and also speeding up your payment and not having to get to that point of causing an issue. Um, we did a survey where we found 47% of construction companies who send out notice of intense, got paid within 20 days from sending that notice. And our users who have noticed of intense built in we’re sending those out and getting paid 90% of the time within the 90 days of sending it as well. So the point of that is if it’s required, send it out and make sure you’re checking that box. If it’s not an owner prefers to get a warning, rather than being combative, if a lien is just put onto their property and they may not even be aware of who was on their property or who was still owed money, if they’re only communicating to a GC or if you’re further down the chain as a supplier. Um, so that warning shot helps and is a lot of times required as well.

Alec Matys (06:47):
Um, so those are the four mistakes. Um, so with that, um, I’m going to dive into the product itself. I know those are four quick things to avoid. If you have any questions, please throw them into the chat. Um, but with that, I’m just going to go here and show y’all the actual system itself. Wow. So here’s our platform, um, right off the bat, whether you’re on retail or partnered with us, um, we’re going to have our insights here. So that’s our data to avoid an issue that might be arising on a project that you’re also on. Um, most times companies don’t like talking to each other about a payment issue they’re having on a project. Um, this is one way of seeing if a lien has been filed or if other people are turning in, um, notices on that project.

Alec Matys (07:52):
And then this is just a project that I threw in here for California, just reiterating and going over what exactly we do on our end. This is something that could be built out internally. Um, in the most important steps are right here. Your payment is not protected. Um, it’s going to be doing three weeks, keeping it on a calendar, knowing what’s required for California as a subcontractor, knowing when the deadline is here. And then again, the escalation of a notice of intent to lien sits right here for you as well. Um, the, each triggers altered from blue to yellow, to red, as you get closer to the deadline, um, again, leveraging the fact that you’re aware of what you need to do when you need to do it to speed up payment. And if a lien had to be filed that you’ve protected that amount.

Alec Matys (08:30):
So creating the notice itself, um, coming here, the first step is sending out that preliminary notice. Um, sometimes contractors I speak with, they don’t always want to send something out because their relationship with the owner with the GC, they don’t want to burn it. Um, putting a friendly cover letter, letting them know that you’re just turning it in because you have to, to protect your payment, um, is one way of just alleviating that and let them know that, Hey, we’re just taking care of what we need to very excited for the business. The next step like we covered is knowing who the property owner is or knowing everyone who’s involved. If you have ours, you can just throw it in and use the property owner that we have if you have on we’ll double check it. And if you know the lender also throwing that in, um, again, like I said, those are the four most common mistakes.

Alec Matys (09:18):
This is one that’s kind of a bonus tip. Everything that’s required needs to be sent certified mail so that even if someone signs for it or doesn’t there’s proof that it was sent. Um, so it’s very important to be sending a certified mail, getting those receipts as well as when someone has to sign for a document. It becomes more real. Um, there you go, next here. You can always rush it and then standard again, this is knowing what state you’re in, what the requirements are and how close you are to that deadline, um, for if you need to rush it, or if you can just send it standard mail.

Alec Matys (09:53):
So with that, everything’s been sent on our side, we’re tracking it again. If you’re doing it in house, make sure you get that certified mail receipt, you’re keeping track of it. And you know who it went to when they received it in the system, you see your payment is protected, but we’re still tracking the lien deadline here. So although you’ve protected your money and speeding it up, if there is an issue that arises, you can escalate it right here with the notice of intent to lien written up by an attorney or filing itself, if you’re getting near that deadline point. Okay.

Alec Matys (10:22):
And this would be in our system, how you’d view all of your projects that are ongoing, not just one in one state and making sure that you’re covering everything that’s required again, if you’re doing it in house, making sure that if it’s a different state, you really read up on those laws and you don’t fall into one of those mistakes of not knowing what’s required to who it needs to go to. Um, this will be the way of coming in and saying, what have we protected? What have we not? Um, and just making sure you’re staying on top of it all. So with that, I want to turn it over to some of the questions that are on the chat. I’ll pull that up. Um, and then a big bonus mistake that I have seen is that when filing a lien, making sure that you do it in the correct county recorder’s office, where the project was actually at, not where the business may be for a commercial job or where your businesses it’s going to be important to know where the project is.

Alec Matys (11:09):
That’s the county where it needs to be recorded in, um, just that I’m to pop up the Q and a. Um, so it was from Lance, um, is there specific language such as referring to lien action? That must be in the original contract in order to file a lien if the client doesn’t pay. So it’s specific language for if it’s a preliminary notice in California, if it’s a notice to owner it’s specific to those states and it’s referring to, it’s not in the contract as a separate document, um, if it’s more of a contract, we do have, what’s called legal guard. You can have your contracts reviewed or go to an attorney and review that contract when it comes to protecting lien rights, that’s a separate document that does have a written in there that although you never expect to have to use the right to file a lien, you have protected your right to file a lien.

Alec Matys (11:54):
Um, and that has to be in there. And then when it comes to original contracts, that’s more of getting a contract review. Um, Elizabeth. Yeah. And our company’s preliminary notices myself since certified mail return receipt. Does that make a problem with filing a lien with Levelset? No, you can still come to us and file a lien. Um, we always prefer if it’s in the system, cause then we see what it was, but if you come to us and just want a lien filed, we will file that lien for you. Um, and then it sounds like you’re pretty read up on what the requirements are. So you could always just come to us and we’ll file a lien from there. Um, let’s see, Chad has one, is it possible to file a lien too early? So in most cases, again, I’m not an attorney. I can’t give legal advice.

Alec Matys (12:35):
Um, you could go to our website, ask a question, get an answer within 24, 48 hours from an attorney in your state. Um, but when it’s possible to filing too early, that’d be if you’re burning a bridge or if you’re really not getting paid a lot of times, this is when I’m working with a supplier or sub with concrete pouring or doing the concrete itself, um, being on a job early and it’s still ongoing and not being paid. You’re going to want to just make sure that you’re not, you could send a notice of intent, but a lien could hurt the whole project and burn some bridges. Um, but legally that’d be a question you could put into our expert center as well.

Alec Matys (13:11):
Um, and then how does scout research work and info we need for our liens? How do y’all get the right info? So that’s, that’s a team that’s doing that in house. It’s not robots. We have a database with people who are calling around to make sure that we know if it’s a bond specific, who the bond is to what the bond claim number is. Um, but that’s something where you could call to title searches. Um, but internally they’re doing all those steps as well as accessing our databases. Um, Michelle, do you also file the release of lien once the payment has been received? Yes. We, we follow those as well. Um, we also have a ton of resources if you wanted to take the template yourself, but when it’s filed and then you go to release it, um, it’s also within the same process, if we can e-file that we will, um, do it that way.

Alec Matys (13:54):
Um, but yeah, we, we love doing release Elaine’s cause that means customers are getting paid. Um, do the notices help even in states where you don’t have to send them? Yeah. So if it’s not required, I know we covered, uh, the lean mistakes that could happen to protect it. I’m sending out a preliminary notice, allows the owner to know who’s on their project, as well as on the GC. You know, if you’re further down that you know, what you need to do, if there are issues. So it’s not about just fully protecting it, it’s having transparency from the beginning. So that again, if there are issues that it’s being talked out, rather than just letting it sit there and then being more combative at the end with someone, um, does Levelset work with our other accounting. So we integrate directly with QuickBooks. We’re partnered with Intuit.

Alec Matys (14:39):
Um, the easiest way is if it’s not that you could do a CSV export to import to get it into the system. Um, obviously if that’s an interest of yours, you can reach out directly to me or anyone at Levelset, uh, be more than happy to show you it there. Um, so can you discuss how you go about releasing the liens steps? Um, so if a lien is filed in the county recorders, that’s filed there. A release is sent to the same county recorders to release the lien of saying that this has been paid for and the release is off of it. Um, it’s, it’s similar. It’s just showing that legally it’s been paid and you’re wanting to take it off. Um, that step is very similar to how we do, uh, filing liens as well. It’s just a different document to release it instead of placing it.

Alec Matys (15:29):
Uh, if you’re already past lien rights, can you still try to file a lien? Um, a lien can still be filed. Um, when a lien is filed, three things are gonna happen. Either the owner will pay the contractor and the contractor can release the lien or the owner can challenge the lien and take it to court, or the contractor can enforce the lien and take it to court. Um, if it’s past a deadline, sending a notice of intent, uh, we find does work. Um, when it comes to placing a lien may be going to our experts in our contacting an attorney, or you could use legal guard with us as well to have an attorney look into it. Um, so, well, it’s not a best practice to miss your deadline. Um, filing it after could have worse repercussions than just not getting paid, but sending a notice of intent, um, sometimes can push payment out as well.

Alec Matys (16:29):
[inaudible] do

Alec Matys (16:30):
Liens, expire, liens do expire. So that’s going to depend on what state you’re in for how long out it will expire. Um, states like California off the top of my head. Um, you could extend it with the agreement from the owner if there’s something going on. Um, but they will be set to expire at certain points, but it really varies state to state. I would highly recommend going to Levelset and just looking up the state that you’re thinking of in there. And then that’s where you’ll get all the pertinent information for it. But, uh, generally speaking, it, it does expire how much time do I wait if I haven’t been paid to file a lien. So that’s going to depend on, on your relationship with them. Um, a lot of times when it’s thought about going to lean it’s, someone’s either gone dark or said, they’re just not going to pay.

Alec Matys (17:16):
Um, depending on that situation, um, California has generally speaking from completion of a project 90 days to file. Um, so a lot of our clients, if it’s 45 days, they might want to be sending a notice of intent or to actually file a lien itself. Um, again, depending on where you are with the deadline upcoming, I know some intents are very effective, um, and then filing the lien. That’s something you just have to look into for what the amount is. Um, and if you want to write me directly, we could definitely dive more into that situation, but generally speaking, staying in front of deadline and not letting it get closer than probably 15 days would be best. But again, contact the owner. Anyone you have above, maybe who hired you, um, to see if that’s time to do it, how does it work to send a lien through Levelset just one time?

Alec Matys (18:18):
Um, so this is probably going back to, if you file prelims on your own, you come to us to do either a notice of intent or to just file the lien. Um, you come on, it’s a set retail price of $349. Um, our research team will research it again just to make sure that we’re turning in the correct legal property description, who the owner is and all that included. We send that certified mail or he recorded with the county recorders. Um, we notify all the pertinent parties that Elaine has been filed. Um, you get all the copies of that and we take care of it on our end to make sure that it’s done correctly. Um, so from your end, pretty seamless, um, and we show you everything we’re doing as well.

Alec Matys (18:58):
Um, James says I currently use levels of, for all my intent to lien and liens. Awesome. Um, that’s great. And I assume you’re sending out some sort of letter beforehand and get to the point of intent to lien and liens. I’m curious. Yeah. And he received payments right away. Thanks, James. Um, yeah, what we do works, um, whether you use Levelset I always say we didn’t invent lean law or liens. Um, we just perfected it and streamlined it, um, following the steps, whether it’s with us or on your own does get contractors paid. Um, so that, that’s great to hear. I mean, that’s, that’s why I love what I do. Um, so thanks for coming, James, uh, but any other questions from anyone else while I’m here, if there are any other ones, you know, you can write me directly or come on to Levelset, whether it be resources or help them with actually filing things. Um, we’re more than happy to help.

Alec Matys (20:04):
I’m going to give it one more minute here and then I’m going to go ahead and sign off again, if you have any other questions, send them over. Um, but I appreciate everyone’s time for coming on looking into it. I hope you took away the four mistakes here. Um, again, the goal isn’t to file liens, the goal is to get paid fast and protect your money. So taking those mistakes, writing them down, keeping track when lead deadlines, lead deadlines are making sure that you know, who exactly they need to be sent to, um, will help keep you protected. Um, that’s it? Yeah.

Alec Matys (20:38):
Yeah. Could you repeat the first mistake? Yeah. So the first one was knowing what the requirements are in your state. So we’ll share out the lean deadline calculator and we’ll share out, uh, some FAQ’s. Um, but the first step is knowing, do you need to send anything in the state that you’re in? And the second one is coupled into that, who it needs to go to. So the first step is knowing what you need to do and then following those steps, um, no problem, Adrian. And then obviously we’ll make sure to send out this recording, um, especially if you have anyone in office who wasn’t able to attend or, you know, if you came in later had those issues, we’re going to share this out to what, um, are all of your advisors knowledgeable of each state’s procedures? Yes. So, uh, Yolanda, we have, uh, if you put a question to the expert center, it’s going to be an attorney in that state who works in construction, who knows what’s required there, put it in there, you’ll get the best answer as well as if you go to Levelset dot com, look up any state requirements and they’re right there for you as well.

Alec Matys (21:47):
Um, and then if it’s something very specific, um, that’d be more legal guard. We can match you up with an attorney there too. [inaudible] All right. Perfect. Well, again, thanks y’all for your time. Any questions? Let me know. Um, and I hope this helped everyone out. Bye.