Protect Your Rights - September 2009

Today’s economy is at best interesting not just for construction contractors - for everyone! As sub-contractors or prime contractors we are seeing bids falling below our cost, the successful bidders often find out, to late, that their bid price was below their costs as well. Not much can be done for those contractors that submit proposals at prices below their costs, other than to make sure your bids do reflect your anticipated costs for each project.

As a conscientious contractor, you are confident that your proposed costs can return you a fair profit, but what do you know about the financial strength of the general contractor that you are submitting your bid. If their financial strength is shaky or they mismanage the project have you protected yourself using your lien rights? It may be that the general contractor has a clause in your contract that you will only be paid when they are paid by the owner. Do you know the financial strength of the owner?

Different states have laws that vary as to how and when to submit mechanic liens on a project. Some require a pre-lien filing to even allow you to place a lien on a project that your working on that has not paid for work completed. The time spent on knowing your rights is time well spent and may produce dividends for you in the end, should a problem arise on one or more of your projects. Government projects often do not fall under the same rules as private work so here again researching how to protect your rights is time well spent. An ounce of prevention is often worth a pound of cure. Please spend the time to know your rights and then act on those steps required to protect yourself.

One last piece of advice, whether it is a general contractor or an owner do not fail to file your lien at the proper time, these items are almost always time sensitive and if you miss those time frames the odds of you being paid are slim to none. When you are paid it is a simple matter to remove the filed lien and submit a final lien release. Please do not fall into the trap of I will have you a check next week, often next week is past the time when your lien rights expire and waiting those few extra days could have you holding the bag and losing what is yours.

Any input to these ideas are more then welcome.

Thank you for reading mine.