Tag: No Lien Clauses
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Subcontractor Forced to Give Up Lien Rights Before a Project Starts? It Can Happen
When a construction contract contains language that requires a subcontractor or materials supplier to waive their lien rights when the contract is signed, and before the actual work on the project has even started, this is called a “No Lien Clause.”
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Subordination of Mechanics Liens: The New No-Lien Clause?
Lien waivers have an important, even critical, place in construction payment. The parties closest to the money are highly motivated to make sure the project proceeds free of any lien claims, for several reasons. Not only can mechanics liens potentially force double payment, they cloud the property title and can negatively impact bonding capacity and cash-flow, all of…
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General Contractor Asking You To Not Send Preliminary Notice? Is That Legal?
At the Construction Financial Management Association’s Annual Conference in Las Vegas, we encountered a very large general contracting outfit who has a lot of financial risk shifting procedures in place. They employ strict subcontractor prequalification requirements and dictate the contract terms to insulate their company from financial risk. While pushing more and more financial risk off…
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No Lien Clauses: An 50-State Overview for the Construction Industry
Can You Waive Lien Rights Before Starting Work? Can you waive your right to file a mechanics lien or bond claim before you even begin working on a project? Attempts to make subcontractors and suppliers waive lien rights at the start of a project — so called “No Lien Clauses” — are usually void and unenforceable. However, the law…
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CFMA Says Owners Are Shifting Financial Risks Down The Contracting Chain
ENR.com and the Construction Financial Management Association (CFMA) recently published some articles suggesting that “cash-strapped public and private owners are shifting greater risk onto contractors through onerous deal terms” [Owners Shift More Financial Risk as Recovery Remains Sluggish]. This is true, but it’s not necessarily new. As this article will explain, this risk shifting tug…