Mechanic’s Lien Tip–Also Use a Demand Letter
We all know the importance of timely collection on your construction receivables. No business can operate successfully without such cash flow. We also realize that a potent weapon in those collection efforts is the recording of a mechanic’s lien. But is that all that should be done?
Assume you are a subcontractor and haven’t been paid. There is a dispute between you and the general contractor and you believe their defenses are without merit and you have the right to collect the full amount due. So, you record your mechanic’s lien and a copy, by certified mail, is given to the owner.
The owner immediately gets on the phone with a general contractor who states his or her position. It just so happens that apposition is against your rights and so the owner only gets a one-sided view of what has happened. They don’t really hear your side of the story.
That is why it is important to accompany the mechanic’s lien along with a detailed demand letter. That letter will outline the salient facts of what has occurred and also the applicable law. That way the owner will have both sides of the story. Instead of simply ignoring the mechanic’s lien, it may cause the owner to make payment, realizing that you have justified position.
National Lien Law frequently prepares such demand letters so give us a call if you wish that help.