Every construction project is a new opportunity. Businesses and professionals can establish very strong reputations by meeting a client’s expectations and adhering to all applicable building codes. Every satisfied client can become a source of word-of-mouth referrals, which are invaluable in the highly-competitive construction industry.
Unfortunately, not every client feels satisfied with the outcome of construction projects they initiate. Homeowners or businesses may withhold final payment for the work performed or materials provided due to dissatisfaction or allegations of contract breaches. Others may try to fabricate complaints to justify a refusal to pay what they should.
How can professionals and business leaders address non-paying clients?
Liens are common solutions
Typically, professionals sign thorough contracts outlining the scope of the project and the standards of the client. Provided that the project fulfills the terms of the agreement, the client should pay any remaining balance due after the completion of the work.
The terms included in the contract usually also outline the anticipated schedule for client payments, including the due date for the final payment. If they do not make good on their promises, the construction firm may need to take action quickly.
There is a limited window of opportunity to pursue a mechanic’s lien after providing materials for a project or completing work on it. The lien converts the property into the collateral securing the financial obligations of the non-paying client. Most clients are eager to avoid the loss of their property through foreclosure, which is one of the means of enforcing the lien.
Appropriate legal action can protect professionals and companies from scenarios in which client non-payment causes substantial financial setbacks. Learning more about construction liens and their enforcement can help business leaders and construction professionals hold clients accountable for the agreed-upon value of company services.