If you’ve been to zlien‘s Construction Payment Blog before, you already know that we often publish articles about what comes before a mechanics lien. These topics include notices (preliminary notice and notice of intent to lien), lien and notice deadlines, required project information, and more.
And of course, we write about the mechanics lien itself.
But we don’t often write about what comes after you file a mechanics lien. We’re going to take care of that today — please read on to learn the 4 steps you must take after you file your mechanics lien.
Step 1: Send The Mechanics Lien To Everyone
When you file a lien on a construction project, it attaches to the property itself. And who owns that piece of property? Well, the property owner of course! But that doesn’t necessarily mean the owner is going to find out that you filed a lien.
In many cases, state law mandates that mechanics liens be served upon certain parties like the property owner or the general contractor. You should comply with these requirements of course, but also go a step further by sending copies of the mechanics lien to all potentially interested parties, including subcontractors, construction managers, property managers, lenders, and more.
The magic of the mechanics lien is that it gets multiple parties involved with your debt. Sending the lien claim along to these parties insures that this is accomplished.
Once you start distributing the mechanics lien claim, give it a little time. You want to give the mail service a chance to deliver the lien, and then give each recipient some time to review the claim and to talk about it internally. By the way, if you filed your mechanics lien with zlien , you could skip this step because we send copies of the liens we file to all interested parties on a project.
Step 2: Call The Person Most Likely To Pay, And Then Call The Property Owner
Once you’ve given the mechanics lien claim some time to get distributed to everyone on the project, you’ll want to followup with a call to some key parties.
The most important party here is the person or company who is most likely to pay you. Typically, this is the party that hired you to work on the project. While they may have been tough negotiators before, filing the mechanics lien has probably shifted the leverage in your favor. At the very least, you can be sure that you now have their full attention! Talk to them and see what their payment plans are now that you have a valid lien claim hanging over their heads.
If that conversation goes nowhere, or if you just want to make sure the pressure stays on, give the property owner a call as well. While many folks in the construction world understand the mechanics lien instrument, property owners are sometimes perplexed. Explain to the owner that you’d rather not have been forced to file a lien in the first place, but you were facing a non-payment situation and had to take appropriate steps.
You can also tell them that you’d rather not have involved them in the situation at all, but if you don’t receive payment, you’ll have to enforce your lien against the owner directly. Since it’s their property on the line, this usually gets their attention.
Phone calls and emails are important and you should give them time, but if talks are dragging on for longer than 10-14 days without any payment commitments, you want to move onto the next step.
And always, always remember this:
YOU ARE NOT THE ONE AT FAULT HERE. SOMEONE DECIDED NOT TO PAY YOU. DON’T APOLOGIZE AND DON’T MAKE EXCUSES. THIS WOULDN’T BE HAPPENING IF YOU HAD BEEN PAID TO BEGIN WITH. AND THIS ALL GOES AWAY AS SOON AS YOU GET PAID THE MONEY YOU ALREADY EARNED.
Step 3: Send a Notice of Intent to Foreclose
If your phone calls or emails don’t elicit payment or a payment plan, it’s time to escalate the claim. Do this by sending a Notice of Intent to Foreclose to the property owner, the prime contractor and any other interested parties. This notice is one final warning to all of the interested parties on the project that your mechanics lien will be foreclosed upon if you don’t receive payment. Send the notice certified mail.
Mark 7 days on your calendar. Make another phone call or send another email if you think it’s worth it. If 7 days come and go and payment isn’t arranged, move onto Step 4.
Step 4: File Foreclosure Lawsuit
Most mechanics lien claims get paid before a foreclosure action is ever required. However, there are those instances when none of the above measures work, and foreclosing on your lien claim is necessary.
While you may be unfamiliar with foreclosure lawsuits and the legal process in general, that’s not a reason to let your mechanics lien claim expire and to just write off this debt. The debt may have its challenges, but it is not dead. Just as the mechanics lien filing is effective at getting most companies paid, escalating a lien claim to a foreclosure action is successful at getting most of those types of debts paid.
To file a foreclosure action you’ll need to hire an attorney. In most cases, even if your claim value is very low, this is not something you can pursue in small claims court alone. You can read more about lien foreclosure here: Is Foreclosure With a Mechanics Lien Worth It?
One final thing to remember: Every state has a deadline to enforce a mechanics lien claim. Be sure to know the deadline in the state where your project is located.
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If you’re having trouble getting paid on a project, we might be able to help. Let’s talk about getting you paid.