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  • Writer's pictureKristen Shields

The Shields Report: "Now and Later" - Providing You A Sweet Taste of the Lien Process

In fielding questions about the lien process, many people don't know what a lien is, what the lien process looks like, and why it is a great tool for them. An easy way to think of this lies in the name of the fruity candy from our childhood: Now and Later. You have to act now to boost odds of getting paid later.

To illustrate, let's say you're owed $100.00 for work performed. Assuming you're eligible to lien, you've submitted any pre-lien notices required, and you are within the time frame to lien, we prepare and file stages of paperwork that attach the $100.00 debt to the property at which you worked. If you're a subcontractor, we serve the required paperwork upon contractors above you up to and including the owner of the property. If you're a general contractor who contracted directly with the property owner, then we serve the owner. Just like a mortgage on a home is a debt with a security interest in the property, a lien is as well, and the property can't be sold without your lien being paid off - that means you get paid. You may be thinking, I have to wait until the property is sold to get paid?

As a general rule of thumb, an owner doesn't like a lien on their property, so the lien can generate momentum towards payment either in full or negotiation on a number to close out. If you're a subcontractor, we often see the owner has already paid the general contractor, but those funds have not been passed along to you - the GC tries to make extra money off of not paying you. When the owner receives notice of the lien, they often go straight to the GC asking hard questions as to why you, Mr. Subcontractor, have not been paid because the owner paid the GC.

If you're eligible to lien, it is a great step towards payment, and we file liens regularly. The key is don't wait too long or your lien rights will expire, and that means not being overly patient and too kind and accommodating with a person or company who won't pay you unless seriously nudged in that direction. Each state has its own deadline within which to file a lien, and that is a hard deadline. Act now to increase the likelihood of getting paid later.

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