Getting paid in the construction industry can be a form of art. There are so many challenges confronting trade contractors and suppliers when trying to get paid, not the least of which involve pay-when-paid clauses, change order disagreements, and workmanship disputes. We touched on this subject a few months ago in the post “Why Customers Don’t Pay And What To Do When It Happens.”
Clearly, the most effective weapon at getting paid in the construction industry is to protect and enforce your mechanics lien rights. However, an often overlooked tool is the “Notice of Intent To Lien.”
The notice of intent to lien is simply a demand for payment that threatens to file a mechanics lien if payment is not immediately made. While this notice is only technically required by nine states, it can be sent voluntarily in any state, and is highly effective at getting paid. In fact, in a recent survey of these notices sent by zlien , 47% of the debts were paid within 20 days of delivery.
That’s an astonishingly high figure considering that companies usually turn to this remedy as a last resort (so, these are tough debts) and the cost of sending the notice is so low.
Inspired by this data, we’ve put together an infographic analyzing the challenges faced by construction credit professionals when trying to get paid, the options available to those companies in getting paid, and where the notice of intent to lien remedy may fit in. The infographic also provides you a little more data learned from our notice of intent to lien survey.