If you’re not paid on a construction project, you may need to file a claim in order to recover your money owed. These claims can be used as a last resort when other notices and collections efforts have failed.
Mechanics Lien
The most common type of last resort doc is the Mechanics Lien. The Mechanics Lien is one of the most powerful tools in the construction industry to get you paid. Mechanics liens are available on private projects such as commercial or residential jobs. Read: 17 Ways a Mechanics Lien Gets You Paid
Bond Claim
If you’re working on a state, federal, or municipal construction project, the government doesn’t allow contractors and suppliers to file mechanics liens to encumber public property. Instead, construction participants on most public works projects are protected by a type of surety bond called a Payment Bond. If you’re not paid, you can make a claim against the general contractor’s bond to recover money owed. Read more about the Payment [Surety] Bond Claim Process.
Stop Notice
A third Last Resort Doc available in certain states is the Stop Notice. A stop notice is “a document given for the purpose of stopping, intercepting, or freezing funds that have not yet been paid on a construction project in an attempt to ensure payment.” Read more about Stop Notices and when they are useful.
Usually, filing a claim is enough to recover payments owed. Note that these claims are not permanent – they can be released when payment is made and they also expire after a certain period of time, depending on the state where you’re working. If you’re still not paid after filing a claim or sending a stop notice, you may need to take further action. Read more here: What To Do After You File a Mechanics Lien and What To Do After You File a Bond Claim