Despite the name, a mechanic's lien is a tool that North Carolina contractors and construction suppliers commonly employ when they are seeking payment on a remodeling project or improvement project. Understanding mechanics' liens can be confusing, but they may be an effective way to obtain outstanding payment on a project.
Mechanics' liens must adhere to certain timelines, and strict guidelines apply. However, subcontractors do have the right to seek payment on work completed, and you may find it beneficial to understand how to use this legal tool to your advantage. With the right guidance and support, you can better protect your right to payment and the financial interests of your business.
The process of initiating a mechanic's lien
You cannot just put a mechanic's lien on a person's property because you need payment for work that you did as a subcontractor. There is a legal process involved, and you will have to do several things before it goes into effect. However, this is often faster than other attempts to collect on owed payments, such as wage garnishment. The steps of initiating a mechanic's lien include:
- As the subcontractor, you must provide appropriate notice to the property owner of what you contributed to the project.
- You may then file a claim of mechanic's lien if you do not receive payment.
- You will then have a timeframe of two to six months to either file a lawsuit or work out a solution with the homeowner.
It is crucial to file the lawsuit with an appropriate amount of time or the lien will not be in effect any longer. While this may seem like a cumbersome way by which to seek payment on work you did or supplies you provided, it could be the right solution for you.
Fighting for your financial interests
As a subcontractor or supplier, your financial well-being and the stability of your business depends on receiving full and prompt payment on your work or your products. When phone calls, personal requests, letters and other attempts don't work, you can seek payment through a mechanic's lien.
Nonpayment is not only frustrating, it is a direct threat to your business and continuity of operations. You have the right to fight for your business, and you may find it beneficial to seek guidance regarding which strategy and approach is best for your unique situation. While a mechanic's lien may be necessary in some situations, there are other ways by which you can pursue rightful payment while still preserving business relationships and contacts.