At Some Point or Another, You Will Need to File a Lien
It’s just a fact that if you work long enough in any type of construction market, you will need to file a lien to force payment for your work or materials you provide on a project. Owners and general contractors may start a job with the best intentions but cost overruns, poor budgeting, or using money from one project to pay the bills on a different project can lead to late or even non-payment of subcontractors and suppliers. You need to have a plan at the beginning of every job on what to do if this happens.
Lien Laws are Complicated and Vary Greatly from State to State
Lien laws are complicated and vary greatly from state to state, so you will need help to meet all of the legal requirements to file an enforceable lien. Although complicated, you do not need a lawyer to file a lien. Most states have local lien preparation services that specialize in filing liens in that one state. They will also know the notices you will need to send, what information is required in the notices and liens, who needs to receive the notices, and where to file require documents so an enforceable lien is created. There are also national lien service companies that provide the same services for multiple or all states in the U.S.
The Choice Between a Local or National Lien Service Company
The choice between a local lien service company and a national service can be difficult depending on your circumstances. If you only perform work or sell goods in one state, a local lien service may be all you need. Local lien service companies likely have direct relationships with filing clerks, understand the local market better, and may even have information about your project they learned from other vendors that will be of use to you. However, local lien services may be more expensive because they won’t have the volume of business of a national lien service.
When You Should Consider A National Lien Service Company
If you perform work or sell goods in two or more states, a national lien service will likely be a more convenient option. With a national lien service, you only deal with one service provider instead of a local lien service for each state. Some information required to file notices and lien documents will be the same from state to state, so working with a national lien service will be more efficient because it prevents you from having to provide the same information multiple times. You will also have all of your lien filings and documentation in one place, should you need access to it.
Another reason you may want to choose a national lien service is if you deal with large owner or general contractor companies with projects in several states. National lien service providers may have useful information regarding these companies’ activities in other states that is relevant or useful to you in the state where you are working or providing materials. Knowledge of a company’s financial problems on a project in a different state may be an early red flag that helps you prepare should those financial issues affect your project.
Choosing Between A Local or National Lien Service Provider
Choosing between a local or national lien service provider should be done early so you don’t miss any notice or filing deadlines. If it’s your first time working in a state, contact a service provider or lien attorney before the start of a job to know your notice obligations and other steps you may need to take to be able to protect your lien rights. You’ve earned the right to be paid, so protect that right by getting the help you need to protect your lien rights.