... continued from Front
entails either paying our client right away or “bonding off” the lien so the lender can have clean title in exchange for an insurance company promising to pay our client’s valid invoices. In my experience, mechanic’s liens result in faster payment to subcontractors than any other mechanism. In the end, that is the answer to the question, “Why should we file a mechanic’s lien?” A lien can take your payment dispute from a general contractor’s (or owner’s) back burner list of things to do “someday” to their “Oh my gosh, the house is on fire,” list of things that have to be fixed today, right now, no exceptions. And for anyone wondering about the case that inspired me to write this article, it is George W. Kane, Inc. v. Nuscope, Inc., 243 Va. 503 (1992).
lien is off of the property.”Then the owner tells the general contractor, “We can’t pay your invoice until that mechanic’s lien is resolved.” Then — and here is the real kicker — the general contractor often has to turn around and tell every subcontractor on the project that it can’t pay invoices right now because the owner is withholding payment based on a mechanic’s lien. So, the net result of a mechanic’s lien can be to turn off the entire payment flow for a construction project. Now that’s leverage that goes all the way to the top! Sometimes when we are fighting to get clients paid, we send demand letters and make calls, and the other side simply ignores us. Then, if it is appropriate in a case, we file a mechanic’s lien. What happens after we file a mechanic’s lien? Inevitably, my phone rings and someone on the other side wants to have a serious discussion about our client’s unpaid invoices. Usually that discussion What Happens Next
If you want to learn more skills and tips about avoiding construction claim pitfalls, you can receive a free copy of my book, “The Subcontractor’s Roadmap to Getting Paid for Extra Work,” by emailing me at jwyatt@harrisonlawgroup.com.
-Jeremy Wyatt
jwyatt@harrisonlawgroup.com
www.HarrisonLawGroup.com
(410) 832-0000
Made with FlippingBook - Online catalogs