It’s every contractor’s worst nightmare to lend supplies or workers for a project, only for the property owner to drag his or her feet on paying – or, in some cases, not pay at all.
This is particularly troubling, considering the fact that the work is either done or in progress, so there’s no turning back.
Not only is this bad for contractors, but subcontractors, as well, because if your boss doesn’t get paid, then neither do you.
Luckily, for contractors and mechanics, the law is on your side.
While you might have a favorite torque wrench or circular saw, the greatest tool in your arsenal might have to be the lien.
What’s a lien, you ask?
What Exactly is the Right of Lien?
No, a lien isn’t something on the menu in a French restaurant. It’s a protection afforded by the law to make sure that contractors, subcontractors, and mechanics get paid.
It exists because once you lend your supplies or your workers for a project, there’s a certain leap of faith required when it comes to the property owner following through on their side of the bargain.
Here’s a list of specific rights that you have as a contractor, subcontractor, or mechanic.
1. What Happens Once You File a Lien?
By filing a lien on a piece of property, you’re essentially preventing the owner of the property from selling it until you’re paid.
To put it in an automotive frame of understanding, it’s like sticking a wheel clamp on a piece of property. The lien hangs over the property like a dark cloud and makes it incredibly difficult for the owner to sell without paying it off.
This makes perfect sense when you find out that the French word, “lien,” roughly translates to English as “bind.”
Once you file a lien, then there’s a deadline.
If the property owners don’t pay by that deadline, then you have a legal right to sue them, but only if you do so before the deadline. Deadlines vary by state.
Even if you don’t sue them and they never pay, the stain of a lien will remain on their property and prove cumbersome for them in the future, so it’s in their best interest to settle it.
2. What Are the Rules for Filing a Lien?
As with anything involving the law, there are certain rules and regulations that must be adhered to.
First of all, you must give the property owner a notice of what is being contributed to the project, so they can have a clear understanding of what they’re paying for.
You’ll then need to file a preliminary notice, which serves as a warning to the property owner that a lien is oncoming if they don’t pay immediately.
If they still don’t pay, that’s when the lien comes out.
If you’ve finished a project and haven’t gotten paid, don’t drag your feet. The deadline for filing a lien is different in every state, but in most cases, the general timeframe is 3 months to a year after work on a project is completed.
3. What Kind of Properties Are Eligible for Liens?
Liens can be applied to almost any kind of physical property, whether that be a piece of land, a house, or a vehicle.
Even though a lien involving personal property is often referred to as a mechanic’s lien, they still apply to homes and land. No matter what kind of property you need to file a lien for, the rules and regulations will remain largely the same.
On the other hand, there are certain fees that you can’t lump in to the lien.
As Nolo’s Brian Farkas points out, contractors can’t factor in their lawyer fees when filing for payment that’s due. Only the cost of objects or services directly involving the project can be counted among the total among owed.
Who Can File a Lien?
Liens can be filed by contractors, subcontractors, or mechanics. They’re for anybody who has supplied labor or material in the construction or development of a property. This includes plumbing jobs, construction, or carpentry, among others.
Subcontractors can even file a lien against the property owner if the contractors never paid them. This isn’t good for the property owners, because they could end up paying for a job twice – all because of some contractors with a shady business practice.
Thankfully, property owners can turn this around and sue the contractor. In this way, the lien still hits the person who is responsible for not paying up, it just takes the long way around.
While it’s nice these laws are in place, it’s one legal knot after another.
For anyone not versed in the law, sorting out all of the different statues and rules could cause you to go cross-eyed, the damages of which are probably not covered in the lien. The best-case scenario is if everyone pays up and behaves honorably.
How to Make a Claim of Lien
Now that you have a firm grasp on the mechanic’s lien, also known as a contractor lien, this might sound like something you want to pursue.
However, it’s a pain to call a lawyer and get involved in the never-ending deluge of lawyer fees.
But there are easier ways.
Lien It Now is a website that offers a streamlined service for filing liens. All you need to do is go to our website and fill out a worksheet, which will take about 10 minutes of your time. Then, we will review the document and once it’s perfect, we will serve or file it for you. This costs a flat fee, as opposed to the lawyer fees, which can rise over time.
Lien It Now has aided around 15,000 contractors, subcontractors, and suppliers in their quest to claim what’s rightfully theirs. Our services are available in all 50 states, too, so wherever you are in the country, Lien It Now has got your back.
Hopefully, you never have to use a lien and everyone holds up their side of bargain in the peaceful exchange of goods. But if someone doesn’t, the contractor, subcontractor, or mechanic has a friend in the law.
Want to avoid the expensive lawyer fees when filing a lien? Then, get in touch with Lien It Now today to find out how you can finish this task without a hefty cost.