Understanding Construction Liens

March 14, 2024

In the complex world of commercial construction, securing payment for completed projects is paramount but often fraught with challenges. One powerful tool at your disposal is the construction lien, a legal claim made against a property by a contractor or supplier who has not received payment for work completed. In this blog post, we’ll discuss the nature of construction liens and cover Miller, Ross & Goldman's comprehensive construction lien services process, designed to fortify your company's financial interests on projects with unpaid invoice balances of $25k and up.

The Power of Construction Liens: A Deep Dive

Construction liens, also known as mechanic's liens, serve as a fundamental tool for financial protection within the construction industry. These legal instruments allow contractors, subcontractors, suppliers, and laborers to claim a security interest in a property they have worked on but from which they have not received due payment. By understanding the nuances of how construction liens work, businesses involved in construction can better leverage this mechanism to safeguard their financial interests.

Origins and Purpose of Construction Liens

The concept of the construction lien has historical roots designed to protect those who contribute labor or materials to improve a property. The underlying principle is that the enhancement of a property's value through construction efforts should not go uncompensated. Construction liens provide a formal process through which unpaid parties can assert their rights.

How Construction Liens Work

When a contractor or supplier files a construction lien against a property, they are effectively placing a hold on the property's title. This lien must be filed within a specific time frame after the work is completed or the materials are supplied, and the exact period varies by jurisdiction. Once filed, the lien becomes a matter of public record, attached to the property's title, and must be addressed before the property can be sold or refinanced.

The presence of a lien can prompt property owners to settle unpaid debts promptly, as unresolved liens can complicate or halt real estate transactions. In cases where the property owner disputes the debt or is unable to pay, the lienholder may proceed with legal action to enforce the lien, potentially leading to a court-ordered sale of the property to recover the owed amount.

Benefits of Utilizing Construction Liens

  • Security for Payment: Construction liens provide a powerful incentive for property owners to pay for the services and materials they have received, knowing that non-payment can have significant legal and financial consequences.
  • Legal Recognition: Filing a lien offers legal recognition of the contribution made by contractors, subcontractors, and suppliers, affirming their right to compensation.
  • Financial Leverage: The ability to encumber a property with a lien gives unpaid parties leverage in negotiations, often facilitating quicker resolution and payment.
  • Risk Mitigation: For contractors and suppliers, understanding and utilizing lien rights can mitigate the risk of non-payment, allowing for more confident engagement in projects.

Challenges and Considerations

While construction liens are powerful, filing and enforcing them come with challenges. Navigating the legal requirements, including strict timelines and detailed documentation, can be complex. Incorrectly filing a lien or missing a deadline can invalidate the claim. Moreover, the process of enforcing a lien through legal channels can be time-consuming and costly. Finding a trusted company that provides construction lien services, like Miller, Ross & Goldman, can be paramount to getting paid as a result of a construction lien. 

Miller, Ross & Goldman’s Construction Lien Services 

At Miller, Ross & Goldman, we understand the intricacies of filing and enforcing construction liens. Our construction lien services process is specifically tailored to support our clients through the entire lien process without any upfront costs. Here's how we stand apart:

Zero Up-Front Costs

We manage all aspects of your preliminary lien notices and lien filings, ensuring that your financial interests are secured without any initial financial burden on your part.

Contingency Fee Structure

Our services are rendered with a clear focus on results. A modest fee of 10% of the actual recovered funds is charged, and only after you've received payment.

Pre-Collect Assignment Focus

Our approach prioritizes preparatory work and ongoing due diligence over immediate collection efforts, ensuring that your company’s financial interests are not just protected but actively monitored and secured.

Benefits of Our Construction Lien Services

Engaging with our construction lien services offers a multitude of benefits, transforming how financial risks and project management are approached in the construction sector:

Comprehensive Back-Office Support

Our team instantly becomes an extension of your company, handling project lien administration, information research, and financial risk mitigation, among others.

Proactive Due Diligence

We conduct extensive research and monitoring related to contract changes, project progress, lawsuits, and potential bankruptcies, which are often overlooked yet crucial for financial security.

Intervention and Mediation

Beyond mere administrative support, we offer project progress intervention and informal mediation to resolve disputes before they escalate, safeguarding your financial interests.

Why Choose Miller, Ross & Goldman for Construction Lien Services?

Opting for our construction lien services means ensuring that nearly 100% of the reasons for monetary losses on construction projects are addressed proactively. Our dedicated approach and meticulous due diligence work to prevent substantial or total project losses that could have been avoided. With Miller, Ross & Goldman, you gain not just a service provider but a partner committed to securing and enhancing your financial stability in the construction industry.

Submit Your Accounts & Get Started With Miller, Ross & Goldman Today

Construction liens serve as a critical mechanism for protecting payments in the construction sector, and with Miller, Ross & Goldman’s construction lien services, your business is positioned to navigate the complexities of lien management efficiently and effectively. Let us help you secure what you've rightfully earned. Contact Miller, Ross & Goldman today to get started with a free quote. 

More Posts