Building on construction liens
It's unfortunate, but sometimes contractors have to go through the liens process in order to get compensated for their work.
In fact, construction liens are becoming more common, which is having an impact on the construction industry.
Here's a brief look at construction liens nationwide:
Construction Liens in the United States
Also referred to as a mechanic's lien foreclosures, construction liens have swept the country in recent years.
The term originated in the auto repair industry as a result of mechanics not getting paid for their work. Construction liens work much the same way except the financial consequences are usually much greater.
According to the National Lien and Bond Claim System, there are nearly 20,000 mechanic foreclosure liens, or construction liens, in the U.S. each year.
The state of Florida experiences the most lien filings from year to year with California and Illinois also topping the list.
Construction Liens Process
In its most basic form, a construction lien gives contractors, builders, material suppliers, and others in the construction industry a legal recourse to receive compensation for their work. Each state has its own construction liens laws; however the laws differ from one state to the next.
In an expert interview with Mark Cobb on construction liens, Cobb describes the lien process as one of constant change.
As new issues arise in construction law, new lien guidelines are created. As a result, most construction companies consult lawyers who specialize in liens and bonds before entering into a contract.
What Type of Construction Does a Lien Apply To?
Generally speaking, a construction lien applies to any property that is considered a form of real estate. This includes homes, buildings, condos, commercial real estate - and in some cases - the land or construction site itself.
The actual lien refers to any work rendered on the property, whether it's a remodel, an addition, or a general repair.
Before construction begins, the property owner must agree to all the work that's going to be performed.
Construction Lien Consequences
There are a number of consequences that go along with a construction lien.
For starters, a construction lien can result in the property owner losing his or her title.
Likewise, if the property owner doesn't follow through with payment, a construction lien can also result in foreclosure on the property.
Finally, construction liens make it difficult to sell the property in question.
Many property owners sell off their properties in order to pay off the lien, but the lien itself makes selling or even refinancing much more complicated.
How to Avoid a Lien
Contractors and construction companies should consult a construction lien lawyer before signing a contract with any homeowner. Closely reviewing contracts can clear up any disputes before the construction process begins.
In addition, contractors should clearly describe all of the work they're planning on completing as well as the compensation they require.
If the homeowner doesn't clearly express satisfaction with construction costs, further negotiations and contracts should be completed to reflect the financial commitment the homeowner is willing to make.
If the contractor and homeowner can't agree on terms, then one or both parties should walk away instead of risking a potential lien dispute.
When it comes to construction law, it's plain to see that liens are sometimes necessary.
Adam Groff is a freelance writer and creator of content. He writes on a variety of topics including construction and liens law.
uPVC pipes, safety glasses and Spetz app launched
This week has seen a range of new product and service launches for the construction trade.
Vinyl Pipes has launched uPVC Column Pipes, which extend the life of pipes. Column Pipes with a power lock (patent pending) will not only to raise the safety standards but improve the efficiency of Borewell installations. This Lock system, a by-product of the in-house R&D team, is designed to bear load making the pipes stress-free, torque resistant and perfect for handling high pressure water.
Conscious that using the correct glasses could prevent 90% of jobsite injuries, Milwaukee's expanded range (pictured) features anti-scratch and fog free styles, new lens colours and magnification features, complementing its 'cut resistant' gloves.
Arriving on the UK app scene, Spetz is billed as a ‘one-stop shop’ for anyone "panicked by household flooding or electricity failure," as it unites tradespeople with consumers.
Spetz founder and CEO Yossi Nevo said urgent needs come in all forms and it’s unlikely that any household has tried and trusted tradespeople to match every possibility.
"The Spetz app rapidly connects them with a suitable ‘rescue service’ in as little as 30 seconds and that rapid reassurance is completely free - it’s the tradespeople who pay for these job leads. Those start at around £6 a time, but the tradesperson can then go on to make thousands from our automated system funnelling the best and most appropriate work their way.”
Spetz is now three years old operating in Israel, Australia and is now beginning a full UK rollout, after a ‘soft’ launch.