Webinar: How To Get Paid Using the Mechanics Lien (and Lien Notices)
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Taking Your Company’s Financial Neck Off The Line
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Accompanying Webinar: http://hub.zlien.com/how-to-get-paid-using-mechanics-lien-webinar The Mechanics Lien is a great tool for subcontractors and material suppliers to secure payment for their work. Liens give those lower on the chain in construction leverage over property owners and general contractors to demand timely payment. However, over time various contractual provisions have been used to shift financial risk away from one party onto others, This webinar will take a look at common risk-shifting provisions and then will explore how to collect payment using lien notices and the mechanics lien.
Transcript of Webinar: How To Get Paid Using the Mechanics Lien (and Lien Notices)
Taking Your Company’s Financial Neck Off The Line
Every Wednesday1pm CSTSignup At:zlien.us/z-web
Construction Credit Knowledge
Shifting Financial Risk
There are many contractually based risk shifting mechanisms, but the
most sure method is using mechanics lien and bond claim laws.
!
Here is why.
Thomas Jefferson introduced the first mechanics lien legislation.
?
If You Build It
And You Don’t Get Paid For It
You Can Have It
?America believes that trade contractors and suppliers
should get paid.
?America believes that
GCs and Owners should shoulder the burden of a
project’s financial risk.
Facing Serious Difficulty Getting Paid
!
Have Some Delays But Cash Coming Through
!
Paid Fairly & On Time
77.8%
22.2%0%
http://zlien.us/17Fx31Y
PAY WHEN PAIDPAY IF PAID
JOINT CHECK AGREEMENTSBANKRUPTCIES
DELAY DISPUTES & DAMAGESWORKMANSHIP DISPUTES
CHANGE ORDERSSCOPE OF WORK ISSUES
CODE INSPECTION VIOLATIONSPREVAILING WAGES
An epic battle between contract and policy
Mechanics lien laws provide contractors remedy in event of non-payment
Contracts start to include “no lien clauses.” Courts void these provisions as anti-public policy
Contracts start to include “pay when paid” clauses. Courts say this is only a “timing” clause
“Pay when paid” turns into “pay if paid.” Many courts declaring this void as against public policy.
Notice Claim Provisions now appearing in contracts with strict claim periods.
1791 40’s 60’s 80’s 2000
Mechanics Lien Rights !Payment bond requirements !Contractor license bonds (i.e. WA) !Misappropriation of funds laws and criminal statutes !Contractor payment timing laws
Laws Protecting Subcontractors & Suppliers
Mechanics Lien Rights !Payment bond requirements !Contractor license bonds (i.e. WA) !Misappropriation of funds laws and criminal statutes !Contractor payment timing laws
Laws Protecting Subcontractors & Suppliers
No Lien Clauses !Pay When Paid Clause !Pay If Paid Clause !Notice Claim Provisions !Retainage Requirements
Owners / GCs Attempt To Shift Risk With Contract
Mechanics Lien Rights !Payment bond requirements !Contractor license bonds (i.e. WA) !Misappropriation of funds laws and criminal statutes !Contractor payment timing laws
Laws Protecting Subcontractors & Suppliers
No Lien Clauses !Pay When Paid Clause !Pay If Paid Clause !Notice Claim Provisions !Retainage Requirements
Owners / GCs Attempt To Shift Risk With Contract
Judges (usually) tip the scales back to subs & suppliers
An epic battle between contract and policy
?America believes that trade contractors and suppliers
should get paid.
Liens were created to protect subcontractors
and suppliers.
Liens were created to protect subcontractors
and suppliers.
To shift financial risk away from the trades
and suppliers….
Notices were created to protect owners and general contractors.
Notices were created to protect owners and general contractors.
To shift financial risk back down the
contracting chain.
Noticesto general contractors.
To shift financial risk back down the
contracting chain.
How?
What do GCs and Owners do with
preliminary notices?
Use Software to manage “financial risk” - which is the risk of lien
GCs and Owners Track Who Does And Does Not Send Notices
Track Preliminary Notices
If not Textura, they are using something to distinguish between those who do and
do not send preliminary notices.
What this means to you.
PRIORITIES
Smart CompaniesAlways SendPreliminary Notices
Smart CompaniesAlways SendPreliminary NoticesBecause they prioritize your invoices above others.
Secure your debt.
Secure your lien rights with a Preliminary Notice. This is sent right when you begin furnishing.
START OF YOUR WORK
END OF YOUR WORK
30 DAYS PAST DUE
90 DAYS PAST DUE
Send a notice of intent to lien after work is completed and you are unpaid.
START OF YOUR WORK
END OF YOUR WORK
30 DAYS PAST DUE
90 DAYS PAST DUE
File your lien or bond claim.
START OF YOUR WORK
END OF YOUR WORK
30 DAYS PAST DUE
90 DAYS PAST DUE
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