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Understanding Construction Liens

Human agreements have the tendency to go the wrong way especially if one party defaults. In such situations, seeking for a legal recourse will be considered as one of the efforts initiated to reach a compromise or get compensation. One may wonder if there is any legal provision for construction and field workers, the answer to this is yes and that is the construction lien. It is obtainable in most countries of the world and it is taken very seriously in most states, like Oregon.

A construction lien gives contractors, builders, and suppliers legal protection to get money for their work, as well as materials or supplies bought for a project. This legal remedy gives contractors the right to file a lawsuit when work on a project has been completed but payment is yet to be made. When you are considering hiring a contractor especially in locations where these laws are enforced, it is important to comprehend how construction liens are applied and how you can avoid them.

Understanding the application of these laws helps in guiding one to make good decisions. For instance, bicanet.com which is construction liens in Oregon have provisions for all kinds of cases ranging from commercial to residential and down to public cases. Having a good knowledge of these provisions helps in the avoidance of litigations and counter litigations.

We have outlined in this article some points to help you understand construction liens better. Please read on as we explain more.

Source: Boatman Ricci

Benefits of Construction Liens

The following are some benefits of a construction lien:

Receiving Payments

As we mentioned earlier, humans are liable to default in agreements reached at the beginning of a contract. This default is usually related to nonpayment or a reduction in the initial amount agreed. However, with the construction lien, all issues relating to payment are handled as it pertains to the property. In the event that the owner decides to default in payment, the property goes up in public domain with a red flag since the lien is a public record. By implication, the owner will have a hard time selling it in the future, and in some states, the lien takes precedence over the mortgage interest.

Getting Compensation

Construction liens are very effective in ensuring that contractors get compensated, when compared with filing a lawsuit. This is because they come with a set deadline for payment and also outlines when litigation will commence if the payment is not made. Severally, the threat to sue has been effective in convincing the homeowner to pay off every outstanding lien. When you file your lien with the right firm and legal practitioners, it is always difficult for the owner of the home to challenge it.

Source: Mann Lawyers

Inclusion in Mortgage Conditions

Before properties are sold in states where there is full enforcement of construction liens, mortgage lenders require the homeowner to clear the lien to enable them to maintain a clean security interest accruable to the property. This is to the benefit of the builder as it helps them to get paid earlier. In the event that the homeowner declines to make payment, the legal agreement will give you the right to receive payment from real estate. The significance of filing a lien is that it conveys a serious message to all the parties involved in the transaction that your payment is nonnegotiable and you will take legal action in the event of a default by the other party.

Limitations of Mechanic Liens

The following are some limitations you may find in this legal provision for contractors:

Source: Robinson & Henry, P.C.

Limited Jurisdiction

Generally, construction liens have a limited jurisdiction as they can be filed only on private sites. They cannot be filed against, county, state or even federal projects. This limitation has made several contractors lose a lot of money while trying to execute projects with the intention of recouping their investment when payment is made. Exempting government projects from litigations is the reason most contractors have several unpaid balances, yet they are legally handicapped to seek redress. However, if you are insistent on suing your state government for a breach of agreement and you need tips on how to go about it, you can check here: https://www.wikihow.com/Sue-the-State-Government.

Strict Guidelines for Application

When you want to file for a lien, you will find that the guidelines are time sensitive and very strict. These restrictions make it a bit difficult for most contractors to explore this option while seeking for redress on failed payment. Basically, there are four categories of deadlines that one can undergo before filing a lien. They include:

  1. The preliminary notification deadline
  2. Notification of intention deadline
  3. Construction lien deadline
  4. Lien enforcement deadline

Mistakes Can Lead to Forfeiture

All deadlines for application come with some sort of specifications that when they are not followed appropriately, can lead to forfeiture of the legal rights you are fighting for. Construction liens are very complicated in terms of the different pieces of puzzles that you may need to file together to stake a claim. Getting them right is dependent on your level of carefulness in getting your act together and also, the law firm you are using to file the suit. If they have sound legal minds, they will ensure that you get the basics right before the case is taken up to higher levels.

These are some of the important points you may need to understand about construction liens. There are other information available on the internet that you can check out to gain more knowledge. Similarly, if you need other tips on how to recover debts, you can check out this video.

Conclusion

When a builder, contractor or subcontractor is not paid for a project, it is not the end of the road. There is a legal remedy to situations like this and that is the construction lien. Choosing a good legal representative goes a long way in determining how successful your lawsuit will be. Feel free to check out the points we have outline to help you understand this legal concept.

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