If you’ve been a contractor or subcontractor for any length of time, you understand the purpose and the power of the mechanics lien. It’s not always as easy as it should be to get paid for a job, but a mechanics lien can even the playing field. It helps contractors get noticed and, ultimately, get paid. No business owner wants to be served a lien. The presence of a potential lien is often enough motivation to ensure timely payment. Even if payment is not made, the mechanics lien can legally position you to force payment.
However, mechanics liens are only as powerful as your ability to execute them. There are a number of easy to make mistakes that can invalidate your lien and cost you an opportunity to get paid. It’s highly advisable to work with a Boca Raton construction lawyer when dealing with mechanics liens. However, if you decide to go it alone, below are a few mistakes to avoid. For more mistakes to avoid, visit part one of this series.
When trying to enforce a lien, meeting all deadlines is critical. Many states have deadlines for sending a preliminary notice. If that deadline is not met, your mechanics lien may become invalid. There are similar deadlines for sending a notice of intent to lien and enforcing a lien. Meeting all deadlines is an important action for your business.
Not Sending a Notice of Intent to Lien
In certain states, you are required to send your client a notice of intent to lien, which is essentially a warning letter for delinquent customers. Even if your state doesn’t require it, it’s still a good practice. Sending a notice of intent puts weight behind your payment request. Typically the threat of being sued is enough to make a customer re-prioritize their finances and send you a payment.
Inaccurately Reporting What’s Owed to You
Needless to say, it’s unethical to report a higher amount on your lien than what the contract says you are owed. The fact that you have to enforce a mechanics lien insights a level of conflict. It’s not wise to draw even more conflict and potentially put yourself further away from getting paid by falsely reporting what’s owed to you.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.