sundance-communications.com/forum Forums General General Telephone & Systems Information pre-liens Do you use them?

I just read quite a lot of the Hall of Shame and
it brought to mind this question. Our policy is to
pre-lien every job over $500 and place a lien after 120 days without payment. So far we have gotten our
money in all cases except one, a government account
no less. About half our work comes from dealers
from all over and are mostly for large national
accounts, so we are really working for a third party
on the national accounts property. Usually just the pre-lien letter is enough to get us paid and the total cost is only $40 and worth every penny.
So what about folks, anyone else have any success
with this?

Please explain what a pre-lein is and how it works.
Thanks

A lien is a legal claim against the owner of the property where work is done. As a licensed contractor I have the right to place a machanics lien on the property if not paid for my work. It doesn't matter if who I work for isn't the owner of the property. Property owners do not like this because it ties up the property if they want to sell it. They will put pressure on the customer to pay my bill.It is important to have a signed bid or invoice for the work you have done.

Now that I have blown right past your actual question and explained a lien I should tell you that a pre-lien is just the start of the process and is
really just a letter stating our right to lien and is sent to the title holder of the property. These folks get them all the time and don't get concerned until the actual lien is placed. We have a service that does this for us and as I stated it is well worth the money.
We usually as a courtesy send the same letter to our customer.

Griffith Electric huh....my son plays on the griffith electric little league team here in NJ.

In my state (NY) we don't have to notify the property owner that we intend to file a lien. If they don't pay we just go ahead and lien the property and let them ask questions later.

I think there may be some contractors here who will actually lien a property before begining work but I can't see doing that or giving a customer a letter of intent to lien if I didn't have to. Why alienate them? It's in the fine print in our contract anyway that we have the option to lien, if they don't know about it they didn't read it.

If there turns out to be a problem, actually we will fill out the lien form and before we actually file it, send them a copy with a demand for payment. They don't know we didn't file it so that almost always gets payment in full. If they don't pay it gets filed and we file as well in small claims court.

Probably what you do is a waste of $40 unless there is some legal reason in your state to do so.

-Hal

Yes it is a requirement to pre-lien, otherwise you give up the right to lien here. The pre-lien letter goes to the property owner and not necessarily to the people we are working for. Our customer doesn't know unless they neglect to pay their bills. We have many long time customers we never do this for because they have a history with us. Much of our work is done through general contractors, some we do not know well and some are very slow in paying subs. Liens ensure we get paid one way or another.