Mechanic's Lien

hot_rod

This may be a discussion for the Roundtable, but I will pose the question here. While it's never a guaranty of payment, it is one of the very few ways we can possibly force some kind of action. A good friend from Ohio told me he puts a lien on the property before the work even begins. In PA, I can not do that. Wish I could. This is the process for my Pennsylvanian brothers, ( http://www.fullertonlaw.com/chapt3.htm#3paIII ) if they should so choose. Should this be a last resort or is it just good business and the professional thing to do? Should we add the phrase "ABC P&H reserves the right to place a Mechanic's Lien on the property for dilatory or non-payment of contractural responsibilities."

Warm Regards,

heatboy

"Expert in Silent Warmth" ™

<A HREF="http://www.heatinghelp.com/getListed.cfm?id=103&Step=30">To Learn More About This Contractor, Click Here to Visit Their Ad in "Find A Contractor"</A>

Paul Pollets

Court of last resort

Mechanic's liens are useful for collection. Most contractors do not want their credit to be blemished with a lien. Smart contractors read the lien filings in local papers or business news. It's a good thing to know who you are working for. If I have an account that's over 30 days old, first comes the collection call on the phone, than a letter after 45 days, if payment hasn't arrived. The letter makes mention that a mechanic's lien will be filed if final mpayment isn't received within 5 days of receipt. I send the letter by certified mail. I've had to do this 3 times in 25 years. I was paid in all three cases before the lien was filed. If accounts payable ignores the collection phone call, it's usually a good indicator that a lien will be necessary. I always try 2-3X by phone, before the letter. Document the times when you called, so the customer can't play " I never heard from you"....

To Learn More About This Contractor, Click Here to Visit Their Ad in "Find A Contractor"

hot_rod

lein stips

If the GC files a stipulation against liens & advertises it properly, he doesn't need to notify the sub contractors & no liens can be filed against the property owners.

To Learn More About This Contractor, Click Here to Visit Their Ad in "Find A Contractor"

hot_rod

Would you work...............

for a contractor as a sub that won't allow you to file a lien against the owner in the event of non-payment?

heatboy


To Learn More About This Contractor, Click Here to Visit Their Ad in "Find A Contractor"

hot_rod

no choice

The banks require lien stips be filed before construction loans are given (at least in my area), so if you're dedicated to working in the new construction arena, that's the lot in life you've got to deal with.

That's just one of many reasons why we try to avoid the GC & new construction field.

GC's actually owning anything of worth or value to go after? Yeah, right. And even if they do, they are quick to file bankruptcy, which then protects those assets.

To Learn More About This Contractor, Click Here to Visit Their Ad in "Find A Contractor"

hot_rod

I mean..........

a lien against the property and the homeowner. After all, he is paying the bills. That's why I try to work for the owner directly. I despise the way builders use my money for their own good. "Due upon receipt" doesn't mean Net 45, at least in my book. I now structure my projects so the next phase does not start until I am paid for the previous phase.

Warm Regards,

heatboy

"Expert in Silent Warmth" ™

To Learn More About This Contractor, Click Here to Visit Their Ad in "Find A Contractor"

joel_14

lien

we use them as last resort also. the problem here is it many times takes alot longer than 45 days to get paid weather you work for a GC or a homeowner. EXAMPLE: we go to a house and do all our ruff in work . On a custom job this typically is 10-25k. I want to get paid. BUT the banks here won't release money untill ALL mechanical subs are done. So if I finish and the electrition doesn't show for 3 weeks and it takes him 2 weeks for the ruff we're out 5 weeks before the paper work is even filed with the bank. then bank inspector takes 1-2 weeks to show up, and a few more days for approval then a few more till check goes out. takes HO or GC a week or so till they get it out to us. So 6-8 weeks is pretty standard. have 3-4 big jobs going plus a few smaller ones and at the end of every month we're always owed 80-100k minimum. Now I'd like that to go away but how??? I've heard some states the bank pays the subs directly I wish that could happen here

Carlton

you can't

go wrong with the liens. They can only help.

Craig_2

That's explains it!

This must be why new home construction goes so slow until the final few weeks of the job when everyone shows up and works like mad. Makes sense too. Why put in all that material and labor if you won't get paid for awhile?

Being owed $80-100k is probably not that bad. You can always borrow against your receivables. If nobody owes you money, a bank can't judge what you're worth! Tough business to be sure.

-cf