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Lien Perfection Services: Protecting Contractors and Suppliers

Worker Completing Construction Project

In order to take advantage of lien claim rights, contractors and suppliers must jump through certain legal hoops before, during and after the work is done. As you probably know, that process is called perfecting a lien claim.

It’s generally a four-step process, but very few contractors and distributors have the internal resources to preserve lien rights.

These are the four basic steps:

  1. Mail preliminary notices
  2. Track your deadlines
  3. Record a lien or submit a bond claim
  4. Foreclose the claim

While these tasks can be outsourced to a vendor, the problem is that vendors often lack the resources and training to do the work.

Here is why effective preservation of lien and bond rights is so important.

By preserving your lien and bond claim rights, you can not only minimize write-offs and reduce daily sales outstanding; you may also be able to accept contracts and purchase orders that you otherwise would have declined.

The reason is that preserving your lien and bond claim rights increases the number of parties who can be held liable for payment. Depending on the project, the potentially liable parties may include the general contractor, property owner, surety and perhaps a tenant.

At Levy – von Beck & Associates, our attorneys have more than 80 years of collective experience in lien perfection and construction law.

Our services go well beyond those of lien vendors and inexpensive lien perfection software:

  • We build and regularly update our internal summaries of lien statutes.
  • We pay an annual fee to obtain direct access to a national title database.
  • For each notice request, we seek to get two independent sources of project verification.
  • We keep our clients informed of any issues that could affect their lien claim rights when the noticed is processed.

We also help our clients explore and implement other options for reducing risk, including these strategies:

  • Obtaining personal guaranties from customers
  • Promissory notes
  • Deed of trust
  • Third-party corporate guaranty
  • Perfected security interests
  • Restriction of credit limits
  • Pink slips on company vehicles
  • Standby letter of credit

For more on our services and successes for clients, please see our overview of lien perfection services.

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