Take it from the industry that is in charge of closing sales and getting properties transferred – filing a lien can kill the deal.  When you’re the one not paid, this is the exactly the effect you desire.

When a homeowner or community member doesn’t pay their dues or assessments, the community’s association usually has a difficult time collecting. Communities don’t have the resources they need to chase down the owner to pay the debt, and so weeks turn into months, and so on.

Filing a condominium or homeowner association lien is a great tool for HOAs, and as you can see from the below article, it works. The property will not get sold without your lien claim getting paid. If the community doesn’t file their claim, the owner  may sell their property and then simply owe the dues as a debt. If you thought getting paid from the owner while they were a community member was hard, wait until you see how hard it is to get their payment once they’ve moved on.

Written by Scott Wolfe Jr See original article at HOA And Condo Liens: Kill Property Sales And Get Paid By Filing A Claim Originally posted on the LIEN

People commonly inquire about how a mechanics lien actually works. They have heard about mechanics lien claims and know a little bit of information about it, but they wonder just how it technically performs.  How, for instance, does it actually stop a property from being sold?

This article from AGBeat is pretty interesting because it discusses a lien from the perspective of title companies. The article refers to these liens as “non-instituational liens” (i.e. liens that are not mortgages).  The article refers to a number of liens, such as HOA or tax liens, but these are the same category as mechanics lien claims.

As you can see, when a property is ordinarily sold, the proceeds from the sale are reduced by lien amounts. Things can be a little more complicated with short sales and other types of sales, but the concept is the same. The mechanics lien must be addressed before the property is sold. Period.  And that’s one way that a mechanics lien works to get your company paid.

Title reports and short sales – when liens aren’t mortgages (via AGBeat)

Non-Institutional Liens One of the issues that often comes up in the short sale is the issue of non-institutional liens (i.e., liens that are not mortgages). These are liens filed against the property or against the borrower, and they can get in the way of the short sale closing (or any real estate…

Written by Scott Wolfe Jr See original article at Mechanics Lien Claims Can Cause Problems With Short Sales Originally posted on the LIEN

Last week, ENR.com published an article about legal problems mounting for The Aspire Group of Ohio, a prime contractor selected to head a $12.5 million renovation project at the Dayton VA Medical Center. The prime contractor is having serious legal problems, accused of not paying subcontractors and even for bribing a federal official. Some subcontractors on the project were stiffed for more than $300,000 each.

This article got me thinking about the nature of mechanics lien and bond claim compliance.

Everyone in the construction industry understands the financial risk inherent in each project. Hell, some large construction and material supply companies build huge departments tasked with simply managing the company’s credit risk.

Credit departments strictly analyze credit applications, pay thousands and thousands to monitor credit data, and then run around like cut monkeys when faced with a non-paying situation.  It makes me think - what about the mechanics lien laws?

The Mechanics Lien Laws Were Created To Insultate The Construction Industry From Financial Risk

I previously wrote an article about the History of the Mechanics Lien. The story boils down to this: The United States had tons of land and no one to develop it, so Thomas Jefferson introduced the mechanics lien concept as a way to encourage builders and suppliers to take risks and build.

That concept has permeated throughout every state, and each state has largely adopted that purpose (See: state-by-state breakdown of mechanics lien laws).

Mechanics lien and bond claim compliance works, too. It is not only designed to insultate those in the construction industry from financial risk, but it actually accomplishes this. Check out this article to read about the 17 Ways A Mechanics Lien Works to Get You Paid to get an overview of why mechanics lien claims can penetrate through standard non-payment situations to get your pockets full.

So, if the mechanics lien laws are there to insulate companies from the market’s risk, why don’t companies put an emphasis on liens?

Are Companies Afraid To Reference The Term “Lien?”

Are mechanics lien claims so successful that they strike fear into the heart of everyone on a construction project?

[pullquote style="right" quote="dark"]From my experience I can say that the world of subcontractors and suppliers are divided into two camps: Those who preserve their lien rights without much concern, and those who avoid liens thinking it will lose them business.  The former are correct.[/pullquote] It’s certainly true that general contractors and property developers hate mechanic lien filings, and they do everything they can to avoid these claims. They throw clauses into contractors prohibiting lien filings (which are usually invalid), they require lien waivers to shell out any payments, and they may make people feel threatened to avoid talking about “liens.”

From my experience I can say that the world of subcontractors and suppliers are divided into two camps: Those who preserve their lien rights without much concern, and those who avoid liens thinking it will lose them business.  The former are correct.

Of course no one likes to have a mechanics lien claim filed against their project, but it’s a fact of business for property owners and prime contractors. In fact, as I’ve discussed in a previous blog post, there are companies out there in the business of publishing software to help prime contractors manage preliminary notice documents.  Clearly, there is a market for this. Clearly, therefore, these notices are sent lots.

Sending preliminary notices and filing liens is not going to tank your business.  It’s going to save your business. If “Lien” is a four-letter word on a construction project, there are times when you need to shout it, and you ought be prepared to do so.

Written by Scott Wolfe Jr See original article at Is “Lien” A Four Letter Word On Construction Projects? Originally posted on the LIEN

It’s common for someone to ask us about the effectiveness of a mechanics lien filing. Of course, we’re big believers in the power of liens, and we’ve written about it exhaustively on this blog.  Check out the “Why Lien” tag, which is a collection of articles about why the mechanics lien process works to get companies paid.

One of our more popular posts was the “17 Ways A Mechanics Lien Works To Get You Paid.”

While not an exhaustive list, this is a list of the 17 biggest effects of filing a mechanics lien claim. The popularity of the post – and its subject matter – inspired us to make a related visual presentation. That presentation was published on Slideshare this morning, and is above.  Feel free to link to it or embed it on your own blog or website.

Written by Scott Wolfe Jr See original article at Mechanics Lien Claims: Do They Work? How? Originally posted on the LIEN

You’re unpaid on a construction project and you’re thinking about filing a mechanics lien.  What should you do?  Will a lien get you paid?  Is there a way to file a lien online?  Must you hire an attorney?  Let’s put these questions to bed.

You Can File Your Mechanics Lien Online

Zlien allows contractors, material suppliers and others in the construction industry to file their mechanics lien online.  To do so, you simply complete an online interview about your construction project.  From there, Zlien researches the project, prepares the lien form and has the lien form filed with the applicable county.

In many cases, your mechanics lien claim is even electronically recorded with the county recorders office, as more than 790 county recorders now allow e-recording.

Here is a video summarizing how Zlien processes your mechanics lien claim:

Do I Need An Attorney To File My Mechanics Lien?

Thanks to technological advances, a lot of work that used to be reserved for attorneys has been automated and commoditized. Filing a lien in the past meant contacting an attorney, negotiating an hourly rate, conducting an interview to collect information about your project, and on and on.  The end product, however, was simply manipulating a form.

Zlien’s software does all the tough work in preparing your mechanics lien claim. This allows you to represent yourself and get the mechanics lien filed without hiring an attorney.  And since Zlien is an authorized Submitter for electronic recording in counties across the country, we can take your lien document and get it promptly filed.

You can still hire an attorney, of course, and sometimes you should even with Zlien’s service available. We addressed this in a previous post titled: Construction Attorney or Lien Service: The Pros and Cons.

Will A Mechanics Lien Get Us Paid?

This is a tough question, of course, because every situation is unique and there cannot be a single Yes or No answer to a question like this.  Nevertheless, we have some statistics and information that may help you.

First, a mechanics lien has a lot of effects, and these effects push the parties on the construction project to pay your debt.  We’ve analyzed some of the most popular consequences of a mechanics lien in this post: 17 Ways A Mechanics Lien Works To Get You Paid.

Second, we’ve seen the success of mechanics lien claims first hand and conducted a survey recently on the success of mechanics lien claims filed by our service. In reviewing the statistics associated with this survey remember the state of the debt at the time it goes out for a lien.

Folks are filing liens after they have tried every other avenue for payment.  These debts are almost lost causes. Yet over 64% of them are paid within 90 days without any further legal or collection efforts.  Even more are paid thereafter.

Written by Scott Wolfe Jr See original article at File A Lien Online: The Smart Way To Get Paid Originally posted on the LIEN

Here is a sneak peek of Jen, Gretchen and Jordan at their weekly Friday “huddle”.

Zlieners huddle regularly – we have daily huddles which last a few minutes and allow us to address any order or system questions as they arise. On Fridays the Operations department has a lengthier department-specific huddle.

If your imagination has you curious as to what is discussed, wonder no more:  KPI’s, clients and the order updates.  This is a way for us to review the previous week and prepare for what is to come.  This powerful discussion allows us to troubleshoot any system obstacles and keep Zlien moving in a forward direction focusing on  new clients and opportunities for Zlien.

As we say at the end of each of these meetings – Huddle out!

Written by Jennifer Smiley See original article at Touching Base With Operations Originally posted on the LIEN

There are basically two options for an association to recover past-due assessments: 1) File a lawsuit; or 2) File a lien.  While a lawsuit may be necessary at some point – it may not be.  Why spend a bunch of money paying lawyers, and spend a bunch of time waiting for anything to get accomplished?  To be honest, unless you have several years of unpaid assessments (and the assessments are large) it is probably not worth it to file a lawsuit as your first step.  The cost of hiring a lawyer to prepare and litigate your suit is probably more than the amount owed – and what happens if you lose?

Filing a lien through Zlien, however, provides the security of attaching the debt to the property itself.  If the lien itself does not provide the necessary impetus to encourage the delinquent property owner to pay, the lien can be foreclosed, and the property sold to satisfy the debt.  And, unlike mechanic’s liens, the foreclosure of an assessment lien is not always required to be judicial.  That means that the association may be able to file a lien, foreclose on the lien, and sell the property – all without hiring a lawyer.  If you do opt to hire a lawyer (or judicial foreclosure is mandated by your state), don’t worry, most states allow for the recovery of attorney’s fees in a successful lien foreclosure action.  Plus, even if you want to file a lawsuit – filing a lawsuit to foreclose a lien is a much better option than just filing a lawsuit against the delinquent property owner personally, because the property secures the obligation to pay (if the property owner is not paying assessments, he might not have the money to pay a judgment against him personally, either).

So, by filing an assessment lien, you not only put pressure on the delinquent owner to pay now – you get benefits down the line.

Sure, you can file an assessment lien yourself, but Zlien takes all the hard work out of it.  Do you know what the form should look like?  When and where the lien must be filed or recorded?  When and how to provide notice to the owner that a lien was filed on the property?  How long you need to wait between the time you give notice and the time you file a lien?  Whether notice is required at all?  And so on?

Zlien does.

Zlien takes care of the whole process.  You just order a document, input your info, and Zlien takes care of the rest, including paying for all the fees (courier, service, recording, postage, etc.), and preparing your document.  It’s hassle free.

Written by Nate Budde See original article at Assessment Liens – Maximum Return on Minimum Expense Originally posted on the LIEN

Condominium and HOA (Homeowner Association) Assessment Liens are a powerful tool for condo and HOA boards to make sure dues and assessments get paid. An assessment lien encumbers the property so that the property cannot be sold, refinanced, or transferred without satisfying the lien, and this generally includes short sales.

Further, besides encumbering the property, a condo lien or HOA lien may usually be foreclosed either judicially or through a trustee’s sale. This means the association can sell the unit or property to satisfy the debt. Obviously, this threat and right provides the property owner with a strong incentive to pay the assessment. If he does not, not only does he risks losing his property, but his overall debt could increase because most states allow the costs of collection, attorney’s fees, interest, and late charges to be added to the lien total.

Also, in some states, a condominium or HOA assessment lien may even have priority over a first mortgage.  That means that if the lien is foreclosed and the property sold – the association gets paid even before the bank that loaned the money to buy the property in the first place.  That’s good security.

So, Why File An Assessment Lien?:

IT GETS YOU PAID

According to real estate experts, “a board’s most potent weapon is a lien, filed against a delinquent property”.

Written by Nate Budde See original article at Why Assessment Liens? The Basics. Originally posted on the LIEN

A few months ago I wrote a blog post titled “Beware of Bad Mechanics Lien Information Online.” It was to make a point you’ve probably heard before about a lot of topics, and that is that you can’t always trust information you find on the Internet.

This is especially true for mechanics lien information because lien laws are so convoluted it’s tough to get the data right. You wouldn’t expect this to be true about content published by lawyers, but unfortunately, the same warning applies.

People who have law licenses do not know everything about the law. Regarding mechanics lien laws specifically, lawyers without much experience in the area are usually lost at sea when it comes to understanding the complex legal landscape.

A question and answer on Avvo.com inspired me to write this blog post.  A contracting firm asked this question on the Q&A site:  ”How can filing a mechanic’s lien help in collecting fees for construction work done?”

Joseph Clark Melino, an attorney in San Jose, California, who claims 45% of his workload is related to construction matters, provided an answer that I strongly disagree with:

Your use of the mechanic’s lien laws to assure payment could cost you more than the project… You may be better off to seek a recovery in the Small Claims court. Even if the limit there is now $7,500.

Let me issue a disclaimer about my commentary here.  In this particular instance, the questioner may actually be better off filing suit (maybe in small claims court) because he is probably well beyond his deadline to file a mechanics lien.

Nevertheless, Mr. Melino’s answer rubs me the wrong way because it downgrades the usefulness of the mechanics lien stating that “it could cost you more than the project” and “you may be better off in small claims court” than entertaining a lien claim.

I previously wrote some articles to dismiss these types of comments:

1) Lien Or Go To Small Claims Court?

Here is the most applicable comment from that article:

There are certainly scenarios when a mechanics lien does not get you paid immediately and you’re stuck having to proceed to have the lien enforced. That happens. It’s much more likely, however, that your mechanics lien claim will prompt one of the other project participants or the property owner to arrange for your payment, and to do it quickly.

When this happens, you get paid more quickly and with less effort than you would with a small claims court action. When this doesn’t happen, you at least have security you can enforce. And that’s almost always better than a small claims court judgment.

2) Most Mechanics Lien Claims Get Paid Without A Foreclosure Suit

This is a funnel I put together that visually demonstrates how your mechanics lien claim will likely be resolved.

Mr. Melino’s first sentence warns the questioning party about the costs of foreclosing on a mechanics lien.  This is putting the cart before the horse.  Way before the horse.

Sure, a mechanics lien can become expensive if you have to foreclose the claim. There are two reasons why you shouldn’t have this on your mind at all when it’s time to decide whether to file your mechanics lien claim.

First, because you don’t have to file the foreclosure action!  If the mechanics lien doesn’t work out you’re not forced to file the foreclosure action. You can dismiss your lien claim and deal with your claim however you want.

Second, because you probably won’t have to make the decision, as most mechanics lien claims are paid before foreclosure is required. Take a look at the lien claim funnel graphic we put together and published last week.  This is a good representation of how likely it is that your mechanics lien claim will require you shell out a lot of money foreclosing it.  You likely won’t have to file a foreclosure action because a mechanics lien works in tons of ways to get you paid.

Written by Scott Wolfe Jr See original article at Bad Mechanics Lien Advice And Information Is Easy To Find Originally posted on the LIEN

Will filing a mechanics lien help me get paid? We took a survey of mechanics lien filings from 2011 and found that 64% of lien claims get paid within 3 months without any further legal action. Most of the other 36% were eventually paid.

No one wants to “throw good money after bad money,” and so we commonly field questions about whether filing a mechanics lien will be successfully at getting a debt paid.

Of course, specifically answering this question is a tall order. Every non-payment situation on a construction project is unique, and it’s difficult to predetermine whether a mechanics lien filing will be the difference between getting paid and not. Generally speaking, however, mechanic lien filings are successful at getting parties to fork over cash that’s in dispute or being held.

Something we’ve explored on this blog is the question of why mechanics lien filings are so effective. Check our, for instance, the tag “Why Lien.” This tag collects years of posts exploring why filing a mechanics lien may be the trick that gets a debt paid. We have a few posts buried in this tag specifically addressing the issue as well, such as the recent 17 Ways A Mechanics Lien Works To Get You Paid.

It’s probably possible to come up with a 100 reasons a mechanics lien can result in a debt’s payment. Yet there is really only one thing you need to know about the effectiveness of lien claims: mechanic lien claims make your debt more collectable.

It all really boils down to that single statement. Every debt or aging receivable has a chance at getting collected. Some factors – like the age of the debt  - contribute to the chances of recovery dropping. Other factors – like a mechanics lien filing – contribute to the chances of recovery increasing.  Savvy credit managers and companies will look at managing receivables from a big picture perspective and implement a lien policy to decrease non-paying accounts overall.

Written by Scott Wolfe Jr See original article at Yes, Mechanic Liens Work Originally posted on the LIEN