As a construction materials supplier, you’ve probably come face-to-face with issues of non-payment. Sure, this can be frustrating, but it can also be extraordinarily costly to your business, preventing you from working with other clients and stripping you of the profits you deserve. If you want to minimize or completely avoid those poor outcomes, then you need to be prepared to take legal action to protect your rights.
One of the best ways to secure payment on the materials that you’ve provided is to file a lien against the property until payment is secured. These liens are commonly used in the construction world, but all too often their benefits are watered down due to misuse and misunderstandings of the lien process. Therefore, if you’re thinking about using a lien to coerce payment on debt owed, you should be sure to avoid some common mistakes.
Construction lien errors you’ll want to avoid
The construction lien process can seem straightforward, but in reality, its fraught with complications. Matters can become even more convoluted if you make the following mistakes:
- Waiting too long to file the lien: State law dictates the timeframe during which you have to file for your lien. If you blow past that deadline, then you’re going to be in a position where it’s a lot harder to recover the money you’re owed.
- Lacking detail: When you file for a lien, you’re going to have to provide certain details to satisfy state law. If your request is lacking in any way, then it might be denied, putting you back at square one.
- Identifying the wrong owner: For a lien to be valid, it has to correctly name the owner of the property upon which the lien is being placed. In many instances, though, requests for a construction lien name the wrong person or entity as the owner, which renders the lien invalid, costing you time and money, and leaving you without the enforcement mechanism you need.
- Misconstruing the debts owed: When you seek a lien, you need to be honest and accurate about the debt owed. If you inflate the numbers, then your lien will be deemed illegally obtained, and you might find yourself in deep trouble.
- Improperly serving documentation: The lien will only be effective if it’s properly served on the property owner. This is a legal technicality, but if you fail to abide by it, then you’re going to find yourself facing significant delays.
- Relying on promises to pay: When you threaten to get a lien, a debtor might make all sorts of promises to make good on what they owe. Far too many creditors fall for this and as a result they hold off on seeking a lien. This makes it harder for them to recover the debt owed when it continues to go unpaid. So, be firm in the action that you decide to take.
These are just some of the mistakes that can be made along the way when trying to secure a lien. So, be diligent throughout the process so that you’re not working against yourself.
Are you facing payment issues related to material supplies?
If so, then now is the time to figure out how to protect your interests and your rights. You might have several paths to success, so choosing the one that’s right for you will require careful analysis of the facts of your situation and what you hope to get out of the process. Fortunately, help is available if you need assistance navigating the payment issues you’re facing.
