I know of few aspects of the construction business that combine complexity and “arcaneness” with vital importance than the construction/mechanics lien rules. Contractors have specific rights and obligations under lien legislation, which varies from state to state (province to province in Canada) and, to make things even worse, can have variations at the county or local level in some situations.
While the rules are similar, they aren’t the same in all jurisdictions. As a good example, in our home province (Ontario, Canada) an obscure rule within this province’s Construction Lien Act requires “Certificate of Substantial Performance” advertisements to be published in a competing publication to validate liens and hold-backs. The wording is so specific that our publishing competitor has something any business owner would drool to possess — a legislated monopoly.
(I don’t know the exact revenue from these ads, but appreciate the publisher is continuing to produce the newspaper daily in the electronic era because of the revenue, which will continue indefinitely because no one (even competitors like us) have anything to gain by fighting to change the rules. We receive several calls through the year from contractors wishing to place these monopoly-priced legal ads; and in all cases, we provide the competitor’s phone number — no way are we going to risk their lien security by misrepresenting Ontario’s lien rules.)
This is where Zlien.com‘s services come in handy for contractors and suppliers, especially if they are doing business in several states or jurisdictions. You can be confident your filing paperwork will be completed correctly, and if there is one place you don’t want to mess around with the paperwork or filing deadlines, it is with construction liens.
Look at this posting from Seth Smiley —Litigation: How to Value Claims and What’s Worth It? Smiley addresses the question of when and where it makes sense to sue — and how you can increase your chances of success.
“I have a general rule that pretty much any amount over $20,000 dollars is worth the gamble of filing suit,” he writes
As always there are exceptions to this rule and many times litigants want to go to court merely on principle. This is not a good business plan. To take the average suit from start to finish, including trial and all appeals can easily cost even the most frugal client north of $50,000.
Many times litigation ends with settlement long before trial. This usually happens when both sides get tired of paying lawyers and settle on an amount that they can both live with and move on.
Many say its a broken system and I tend to agree. Those who know how to utilize it will be the most successful.
This blog has many resources on business management, collections, lien policies and the like. You’ll find value in it no matter where you are.