As a construction professional or business owner, you need the payment for completed projects to move on to the next big job. You probably invest thousands of dollars in materials and dozens of hours of manpower in a project before its completion, possibly while only in possession of a deposit from the homeowner.
Most property owners will make good on their responsibilities and pay the remaining balance in full after you finish the work. However, there are always those who intentionally try to avoid financial responsibilities to others. How do the civil courts protect you if a homeowner won’t pay for work you already performed?
You can request a mechanic’s lien or artisan’s lien
State law protects your right to use the property where you did the work as the collateral for the past due amount on the invoice. Provided that you have documentation of how much they agreed to pay for your labor and the completion of the project, you can file a civil claim seeking a mechanic’s lien against the property. In some cases, the courts may refer to this as an artisan’s lien instead.
Those who do tile work, who replaced windows or who repair a sagging foundation can ask for a lien against the property’s title. The lien you secure from the courts, once recorded appropriately, will prevent the homeowner from selling, refinancing or transferring the property to someone else without paying you first.
Will asking for a lien hurt your company?
Some businesses worry that if they take a client to court, it will make them look combative or unprofessional. However, mechanic’s liens are such a common occurrence that seeking one won’t attract media attention or even provide grounds for an honest negative review online, as others would question a one-sided version of the story. Only those who know they won’t pay the invoice in full will have reason to worry about you demanding payment for the work you’ve done.
Rather than trying to work out payment arrangements with someone who has shown they have no intention of paying you in full, it may be smarter to ask the civil courts for help and then use the lien as leverage for more favorable arrangements later.
Learning about construction law can help you protect your company and collect the payment you deserve.