If your construction business works across state lines, or you travel to different locations as you find jobs that need your specific skills, then you know that you have to comply with the local laws and regulations governing the construction profession. Here are five tips to remember that will help you when you’re filing liens in more than one state.
Different states have different licensing requirements and in many, only licensed professionals can file mechanics liens. Before starting any new job, you want to ensure that you’ve complied with state licensing guidelines and have registered properly so that, if the need arises, you’ll be qualified to protect your rights by placing a lien.
Project Start Date
Certain states require you to file paperwork before or shortly after the start of your project. Before beginning work on any project, you should have a signed contract and collect the information you need on your job sheet. This coming into the office should trigger someone to look up these initial filing deadlines for the state the project is located in when entering the project into the system.
Before you file your mechanics lien, many states require a preliminary notice filing. In some states, this happens at the start of the project. In others, it happens some period of time after an invoice isn’t paid. You should be aware of both who the notice should go to and the deadlines for it going into the project so that you don’t lose your rights just because an appropriate notice wasn’t sent to the right people.
While a handful of states give you plenty of time to file a lien after a missed payment, others require you to file within a fairly tight timeline. If you’re filing liens in more than one state, you’re probably working with multiple different timelines, so make sure you have a system for keeping each straight.
Tacking Liens and Following Up
Once you’ve successfully filed a lien, paying attention to timelines continues. Liens last anywhere from six months to several years, after which they must either be extended or you must file an action to collect unpaid invoices. Continue to pay attention to these timelines and take the appropriate follow-up action or release the lien before your rights expire.
Filing liens in more than one state just requires a tracking process that is a little more sophisticated than if you were only following one state’s guidelines. Thankfully, there are certain trigger points you can set as reminders where you need to look up a new state’s guidelines to ensure you’re complying with the local laws. For more help setting up a system, or managing your mechanics lien filings and collection actions, reach out to the experienced construction attorneys at National Lien & Bond.
This blog is for educational purposes only and not intended for legal advice.