If you are involved in the construction business in New York, you know that even the simplest of construction projects can become complex when a dispute regarding payment arises. These disputes may be between a contractor and a client or even between a general contractor and a subcontractor or other vendor or supplier. There are some ways that contracting professionals may be able to protect themselves in these situations.
As explained by Construction Executive magazine, contractors that are hired by private individuals or organizations may opt to utilize what is called a mechanic’s lien. This is essentially a debt that is associated with the property on which the work is being done. It is directly linked to the title and would prevent the property owner from selling the property unless the lien is satisfied, meaning that the owner would have to pay the contractor in order to sell their property. The lien may also hinder an owner’s ability to refinance or obtain a home equity loan on the property.
There are many advantages to mechanic’s liens, including the general speed and ease with which they may be obtained. There are, however, specific deadlines that must be adhered to during the application process. A lien may be invalidated if an error of either a procedural or technical nature can be proven.
If you would like to learn more about how you or your company may be protected against clients who do not provide timeline payment for projects, please feel free to visit the contractor’s financial contractual assistance page of our New York construction law website.