Lien filing for construction companies and subcontractors can be complicated and if you do not know how to handle them they can potentially cause a big hit to your business. We have put together tips about liens and lien filing that can help everyone in the construction industry.

  • Are liens the same in every state? – The most important thing to know about liens and lien filing is that they are different in each state. Make sure you know and are following the laws applied to the state that you are doing the work in.
  • When do I file a lien? – Liens are a declaration that someone has not paid for work or supplies that they have signed a contract for. A lien should only be used if it is the last option. Before filing, you should try to get the other party on a payment plan with a reasonable due date, this way you can save yourself the legal fees and headache of filing a lien.
  • How do I start the lien process? – The first step in filing a lien is to give preliminary notice to the appropriate party. Most states require that you notify them at the beginning of the project, before there is an issue with payment. Some states require that you use a certain form to file your lien so always do your research and know what your state requires so that you don’t lose the right to file a lien.
  • The work is done but you have not received payment, now what? – The law is different for each state, but some states require that you file the lien as soon as 60 days after the work is completed. Once again, make sure you know the laws of the state that you are doing business in and have the correct deadlines.
  • What do I need to know? – Researching the asset is necessary before moving on to actually filing the lien. You have to make sure the other party actually owns the property. It’s also important to know if there are any other liens being placed on the property, it may not be prudent to file for a lien if even after the property is sold, other parties might have a higher priority and you will get nothing.
  • How do I file a lien? – Some states require that you fill out a certain form with information on the creditor, debtor, and property. Some counties are very strict and could reject a lien just on the format of the paper. It’s also important to file it with the correct office, and it is often a good idea to deliver the document to the office in person, as you don’t want it to get lost in the mail or looked over.

Since the ability to file liens can be vital to your business and can be very confusing it could be helpful to have assistance from experts in liens and lien filings on your side. A company such as CapitalPlus Financial, can help you with liens and lien filings as well as other back office activities to make sure your company is protected.