Most construction firms and professionals do not receive payment in full before beginning work. In many cases, clients only offer a portion of the project’s cost as a down payment.
The contract that they sign may outline a specific payment plan or may impose a final date for remitting the balance due upon the completion of the work. Most clients fulfill their financial obligations after the satisfactory completion of the construction project.
Others may delay payment or may outright refuse to pay what they owe. In those cases, construction professionals and business leaders may need to be ready to take legal action.
The property can become collateral for the debt
State statutes allow certain parties to pursue a lien against real property in specific scenarios. Construction companies, contractors and organizations that provide raw materials for projects are among those who could request a lien due to unpaid invoices.
Recording a lien with county authorities prevents the owner from transferring their interest or selling the property without paying what they owe. The lienholder can also foreclose on the lien if the owner makes no effort to pay the balance due.
Property owners are usually eager to protect their equity, and they may make payments when served with information about the intent to pursue a lien. They may also respond proactively when they learn about lien enforcement or foreclosure efforts.
Navigating the legal system to obtain or enforce a construction lien is a task that often requires the support of a legal professional. Those facing disputes related to construction projects often need guidance when pursuing the pay they deserve, and that’s okay.