Regardless of whether you are a residential or commercial contractor, an outstanding invoice for services rendered creates a highly stressful situation for any contractor or construction business. Whether the owner claims they haven’t received the invoice yet or refuses to pay the contractor because of an alleged defect, a late payment or non-payment can have crippling effects on your business. If you are in the unfortunate position of dealing with an owner that refuses to compensate you for your hard work, the good news is that our team of Chattanooga construction lawyers can help you recover those funds.
In this four-part series, we first discussed some of the main reasons why late payments from owners occur. In the second part, we discussed progress payments being implemented into contracts before you begin work. In the last section, we covered demand letters and talking with the owner. In this final section, we will discuss your last few options to utilize in situations where an owner refuses to pay.
Perfecting a Lien
A claim of lien against a property is an effective legal avenue construction professionals can take in order to secure unpaid compensation for work that was performed. In order to effectively perfect a lien, the owed compensation needs to be approved through a court system. When you partner with a Chattanooga construction lawyer, they can prove that you are owed a debt by utilizing existing contracts, purchase orders, and other documented expenses. An experienced attorney will also make certain that the time-sensitive lien documents are submitted before their deadline and accurately to ensure that your lien is valid. At Cotney Construction Law, we have intimate experience with filing lien claims and can navigate you through this complicated process.
The final option for contractors to consider is litigation. If the owner breached the contract, you can pursue a civil case. Additionally, for smaller amounts owed, you can pursue a lawsuit in small claims court. An experienced attorney will know how to present a compelling case on your behalf. It’s also critical that you keep any relevant documents on file while working on projects and attempting to seek payment. For example, if you elect to file a lawsuit against an owner that refuses to compensate you, having documented evidence of the existing contract, photographs of the work before and after completion, purchase orders and invoices related to the work, and demand letters that were ignored will only build a stronger case thus greatly increasing your chances of being paid the compensation your rightfully deserve.
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.