There used to be a time when a lien was considered taboo in the construction industry. If a contractor liened the job (often working for the builder), the reaction was pretty clear – no more working for that builder.
For the average Joe who hasn’t yet cut his first tooth in the construction industry in metro Detroit, it might seem like a no-brainer. Lien it, after all the contractor should get paid. Right?
But for contractors and suppliers in the industry in the 70’s, 80’s, and 90’s, if you didn’t play along and figure on making it up on the next job, your whole career could be in jeopardy for the short-term. Simply put, if you wanted to play the game you generally gave up your rights and allowed the big boys to pay you when they got around to it. By doing so, you could look forward to the next job.
The bigger the builder, the bigger the stakes, and this gamble was called rather recently in the lean years of this very decade when the housing market went bust. Huge companies lost millions. Small companies lost everything. The days of carrying each other’s payoff into the next job were history. Simply put, there was no future work to “borrow” against. With all the cards now on the table, the banks got the kitty, but it was full of worthless paper and titles to unfinished properties. Nobody could afford to purchase the finished properties.
To be sure, at this last stretch, mom and pop companies were doing everything they could to secure what little they might be able to by utilizing lien rights, even throwing liens onto jobs that were well past the deadlines by statute. No longer would the good old buddy system be employed.
The projects today require the collection in full in order to make a profit. Competition is fierce with regard to both labor and materials. The project owner sometimes starts the project under-funded, and this inevitably causes delays in payments. It has been my observation that some owners threaten not to pay at all, forcing the little guy to contemplate expensive litigation. Often a deal is worked out where the bully owner offers to settle short just to be a “good guy”; and all that is required is a Full Unconditional Waiver and acceptance of seventy cents or so on the dollar. Yes I saw this happen just last month and the contractor was cheated out of $4,500.
If you have a job that you need to get paid for in order to make a profit, don’t allow your lien rights to expire simply because your builder or general contractor has put a carrot out for a promising job in the next week or two. If you don’t get paid for the first job, how can you possibly expect to be paid for the next job?
Find yourself a top notch attorney who knows the construction industry, lien law, and foreclosure practice, and get him on board.
And if you need a lien filed, contact Michigan Construction Lien Services LLC. Protect yourself, your family, and your business!
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