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Mechanics Liens: How They Can Get You Paid
 

Mechanics Liens: How They Can Get You Paid

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Will a mechanics lien get me paid? How does a mechanics lien work? This presentation answers this question and more. Based on a blog post on the Zlien Blog titled: "17 Ways A Mechanics Lien Works To ...

Will a mechanics lien get me paid? How does a mechanics lien work? This presentation answers this question and more. Based on a blog post on the Zlien Blog titled: "17 Ways A Mechanics Lien Works To Get You Paid," this presentation explains the consequences of a mechanics lien, what it means to the construction project, and why these instruments can help you get paid.

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    Mechanics Liens: How They Can Get You Paid Mechanics Liens: How They Can Get You Paid Presentation Transcript

    • 17 WAYS A MECHANICS LIEN WORKS TO GET YOU PAID PUBLISHED BY
    • A Mechanic’s LienWill Encumber The 1Property.Lien document is recorded with landrecords and will appear on a titlesearch of the property. As a practicalmatter, this means the property willnot be sold, refinanced or otherwisetransferred without the lien claimbeing resolved.
    • A Mechanic’s LienGets The Lender’s 2Attention.Many construction projects have alender giving money to the propertyowner or developer. When you file alien you jeopardize their security in theproperty, and so they makemovements to get your lien claimresolved.
    • A Mechanic’s LienGets The Owner’s 3Attention.The first two reasons alreadydiscussed, in addition to otherreasons, result in the property owneror developer being concerned aboutyour lien claim. If they didn’t knowabout your debt before, they will knowabout it after the lien is filed, and theywill be interested in resolving it.
    • A Mechanic’s LienCreates Contractual 4Breaches.When a mechanics lien is filed againsta construction project, contractualprovisions in various contractsobligating parties to keep the propertyfree of liens are put into breach, whichprovides the lien claimant withleverage to demand payment.
    • A Mechanic’s LienMakes More Parties 5Obligated To You.While you are normally limited todemand payment from the party whohired you only, filing a mechanics lienobligates the property owner to yourdebt and potentially the generalcontractor (and a surety) as well. Thisopens up more pockets, andincreases your chances to get paid.
    • A Mechanic’s LienSets A Firm 6Deadline. Maybe you will get paid on the construction project, but you’re just not getting paid right now. Filing a mechanics lien helps set a firm deadline for the resolution of your claim. Deadlines get folks moving.
    • A Mechanic’s LienGives You A Security 7Back-Up Plan What if everyone is out of money - your customer, the prime contractor, the developer...everyone? This sometimes happens, especially in a bad economy. Filing a mechanics lien gives you a secure backup plan, as you can always fall back on the property’s equity if unpaid.
    • A Mechanic’s LienMakes You A Priority 8To Debtors Filing a mechanics lien means that folks will sometimes pay you and your claim just to get rid of the nuisance. Take - for instance - a developer or prime contractor that challenges your workmanship. They may play hardball with payment before a lien, but after a mechanics lien is filed it may be worth it to just pay your claim.
    • A Mechanic’s LienSticks And Is Hard 9To Challenge Even when a party wants to dispute your mechanics lien claim it is difficult for them to do it. A mechanics lien claim will tie up the property and the only way to get it removed is to prove that it was filed frivolously - a very high standard. As a result, your lien claim sticks and pushes the parties to resolve it.
    • A Mechanic’s LienHelp When Parties 10File Bankruptcy Bankruptcy may get debtors out of ordinary debts, but when you file a mechanics lien you elevate your debt to a secured debt. In addition to providing leverage with the bankrupt party, don’t forget you can still go after the property, the property owner and other non-bankrupt parties.
    • A Mechanic’s LienWill Freeze Money 11On The Project Bankruptcy may get debtors out of ordinary debts, but when you file a mechanics lien you elevate your debt to a secured debt. In addition to providing leverage with the bankrupt party, don’t forget you can still go after the property, the property owner and other non-bankrupt parties.
    • A Mechanic’s LienMay Force Joint Check 12Agreements Sometimes parties are having financial trouble on a project and no one knows about it...until a mechanics lien is filed. Mechanics liens expose financial difficulties being experienced by parties and may force a party into a joint check agreement, which can benefit you and get you paid.
    • A Mechanic’s LienMay Qualify You For 13Attorney Fees The right to recover attorney fees is a huge benefit in any legal battle. Parties are not entitled to recover attorney fees by default, but a mechanics lien usually qualifies you to recover attorney fees and other costs. This increases your chances of getting the debt paid.
    • A Mechanic’s LienEscalates Your 14Situation Sometimes getting the prime contractor, developer or other party to pay your debt requires just a little push. A mechanics lien claim escalates your collection efforts and shows the other parties you mean business, which translates into a faster payment for you.
    • A Mechanic’s LienMay Affect The Prime’s 15Bonding Ability Bonds are very important to prime contractors. When a project gets liened, the bonding capacity of the prime contractor is jeopardized. This means your mechanics lien claim becomes very important to them, and that means you get paid.
    • A Mechanic’s LienAffects Various 16Relationships Typically the prime contractor has a good relationship with the owner, and the owner with the lender, and so on. Filing a mechanics lien puts stress on these relationships and pushes the parties to resolve the claim.
    • A Mechanic’s LienCreates Leverage 17In Your Favor. Let’s get down to the big point here. All of these “ways” a mechanics lien works boils down to this one: A mechanics lien creates leverage. It creates lots of leverage, and the leverage can come in many forms. Regardless of form, however, the result is the same: payment.
    • 17 WAYS A MECHANICS LIEN WORKS TO GET YOU PAID PUBLISHED BY