As a contractor or supplier, there’s nothing more frustrating than completing a job or delivering goods and not receiving payment. It can leave you in a tough financial situation and cause unnecessary stress. Thankfully, there’s a solution that can help you get paid – filing a mechanic’s lien.
A mechanic’s lien is a legal claim against a property. It can be filed by a contractor, subcontractor or supplier who has not been paid for their work or materials provided on that property. The mechanic’s lien gives the creditor the right to force the sale of the property in order to receive payment for their services or materials.
What are the benefits of filing a mechanics lien?
Filing a mechanic’s lien can provide several benefits for creditors, including:
Increased likelihood of payment
Filing a mechanic’s lien can act as a powerful incentive for property owners to pay their debts. The threat of losing their property can be a significant motivator for property owners to settle their debts and avoid foreclosure.
Priority over other creditors
If the property is sold or foreclosed on, mechanic’s liens typically have priority over other creditors, such as mortgage holders or other types of liens. This means that the creditor who filed the mechanic’s lien will be first in line to receive payment from the sale proceeds.
Protection of payment rights
In some cases, mechanic’s liens can protect creditors against fraudulent activities, such as a property owner transferring ownership to avoid paying. Additionally, mechanic’s liens can provide creditors with a legal recourse to recover their payments without resorting to expensive and time-consuming litigation.
Filing a mechanic’s lien can be a complex and technical process that requires strict compliance with legal requirements and deadlines. Therefore, if you’re involved in construction and a property owner fails to pay you for your work or materials you’ve supplied, consider seeking legal assistance to protect your rights.