When do I need a mechanic’s lien?

By | May 13, 2008

If you own a business or perform services for someone, you expect to be paid, unless previous arrangements have been made for the donation of your time and materials. In order for your business to continue in a profitable manner, you have to rely on customers to pay their bills on time. However, in many cases, this simply doesn’t happen. When you first start any type of job for a client, you should have a simple contract, which states the cost of materials and labor, and a payment schedule for the job. But, what if the customer decides they are not going to honor that contract and simply don’t give you any money. Even if you do not have formal contract (which is never a good idea), you still have a remedy for payment.

A mechanic’s lien is given to certain builders, artisans, material providers, and service workers as a statutory protection that grants a lien on the building and land improved by such persons. Any unpaid contractor may utilize this form with the courts to represent the money they are owed for labor and materials. Since it is very unusual for the contractor and the customer to have agreed in advance that the contractor will have a vested interested in the business, a mechanic’s lien is a nonconsensual arrangement that will arise as a consequence of the parties’ status of non-payment. The mechanic’s lien is not by mutual consent, but the court will usually grant the contractor this allowance until he or she is fully reimbursed for their time, materials, and often interest, which has been lost up until the date of payment. This is an excellent remedy for the small contractor as well as large vendors in the event their invoices are ignored for an extended period of time.

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