Miller, Ross & Goldman
Global Commercial Debt Collection & Legal Services
Global Commercial Debt Collection & Legal Services
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Property development projects involve many moving parts. Contractors, subcontractors, lenders, and investors all play a role in keeping work on schedule and on budget. When construction liens enter the picture, they can disrupt this balance. Liens can complicate financing, delay timelines, and create legal challenges that threaten a project’s success. Understanding how liens affect property development helps developers protect both their investments and their reputations.
Unlike many disputes that remain between contracting parties, construction liens attach directly to the property. This means that even if a dispute arises between a subcontractor and a general contractor, the lien may encumber the entire project. For developers, this creates a significant risk because liens can affect titles, financing, and even the ability to sell or lease completed properties. In large developments, one lien can trigger a chain reaction that impacts multiple stakeholders.
One of the most immediate impacts of liens is financial. A lien can block access to critical funding or refinancing, as lenders see unresolved liens as potential red flags. Some lenders may even pause disbursements until lien issues are cleared. When financing stalls, carrying costs such as interest, taxes, and insurance continue to add up. The longer liens remain unresolved, the more expensive the project becomes.
Liens often create delays in construction. Contractors may pause work until payment disputes are resolved, which pushes back permits, inspections, and completion dates. These delays can undermine investor confidence and strain relationships with future tenants or buyers. In a competitive property market, even small delays can affect a developer’s ability to deliver on promises.
Construction liens also create legal obstacles. They cloud property titles, making it difficult to complete sales, leases, or refinancing. If liens remain unresolved, there is also the risk of foreclosure, which could result in the loss of the property. Developers can protect themselves by using lien waivers, ensuring timely lien releases, and maintaining strong documentation within their contracts. Taking these steps reduces the risk of ownership disputes and improves transparency across the project.
Developers should include clear payment terms and lien waiver procedures in every contract. These measures establish expectations early and help prevent disputes later. Compliance with state lien laws is also critical, as failure to follow proper timelines and notice requirements can make liens harder to resolve.
Open communication keeps all parties informed and reduces the likelihood of disputes escalating into liens. Developers should maintain thorough records of payments, notices, and correspondence. This documentation can serve as proof of compliance and help resolve disputes faster.
Managing lien risk is complex, especially for large developments. Legal counsel and lien management professionals play an important role in helping developers navigate disputes while keeping projects on track. Working with experienced advisors ensures that developers are not only reacting to issues but also proactively protecting their investments.
Construction liens can threaten financing, delay construction, and create legal challenges that disrupt entire projects. At MRG Partners, we provide the strategies and support developers need to keep projects on track while minimizing risk. Our team assists with contract reviews, communication strategies, and dispute resolution to keep projects moving forward. Contact us today to learn more.
