Lien rights are one of the most powerful tools subcontractors have to protect their right to payment. Here's what you need to know.
What is a Mechanic's Lien?
A mechanic's lien is a legal claim against a property that secures payment for work performed or materials supplied. If you're not paid, you can potentially force the sale of the property to collect what you're owed.
Key Steps to Protect Your Rights
1. Send Preliminary Notices
In most states, you must send a preliminary notice within a certain number of days of starting work. This notice preserves your right to file a lien later.
2. Track Your Deadlines
Lien rights have strict deadlines that vary by state. Missing a deadline can mean losing your rights entirely.
3. Document Your Work
Keep detailed records of:
4. File Your Lien on Time
If you're not paid, file your lien before the deadline expires. This typically must be done within a certain number of months after completing work.
State Variations
Lien laws vary significantly by state. What works in California may not work in Texas. Always consult with a local attorney for specific guidance.
Prevention is Better Than Cure
While lien rights are important, it's better to avoid payment problems in the first place. Use payment prediction tools, require deposits from new clients, and follow up quickly on overdue invoices.