Construction liens (also known as Builders’ Liens or Mechanic’s Liens) have the greatest influence over two things – land and money. Ideally once a construction lien is filed the land will not be sold and the money/financing for project is going to stop flowing. After the lien is filed, the people managing the project are going to want to address your resolve your construction lien and non-payment issue right away because the project’s funds are held up and/or the sale of the property is delayed.
If you are thinking about filing a construction lien, consider the following two questions:
1. Does the project have ongoing financing?
2. Is the property going to be sold in the near future?
Your answers to these questions will help determine if you are a good candidate to file a construction lien. If you have answered YES to either of these questions, you are in a potentially powerful position if you file a construction lien. After you file, your construction lien will have influence over the project by either tying up the financing or delaying the sale/transfer of the property. This will result in a higher probability that your non-payment issue will be dealt with. Liens help get you to the negotiating table.
If you have answered NO to both questions, your construction lien may not have the desired effect and power over the situation that you are hoping for. If you file a construction lien it could potentially just sit there – there is no urgency to resolve your lien. The project stakeholders are not being directly impacted by your construction lien because the financing and/or the sale of the property is not directly affected.
Registering a construction lien is not for everyone, therefore; there are alternative collection tools you can consider. Third party collections or initiating legal action through either small claims or superior court (depending on your situation) may be a better option for you. Both collections and commencing legal action can be beneficial resources to utilize to aid in the recovery of your money.
If you are still uncertain about filing a construction lien, we are always available to consult with you. Simply give us a call to discuss your situation. We can help provide clarity and assist you with finding the most suitable option for you.
Let’s get you paid!