Tips On How To Avoid Construction Liens NY Area

By Deborah Howard


If you are not familiar with the term, a lien is a legal claim that is made by one person on the property of another to secure the payment of a certain debt. Construction liens NY area happen when a contractor has finished a certain project and the owner of the construction has not paid for it. It is also possible for subcontractors to place a lien on your property even if you paid the contractor, but he did not pay the subcontractors.

At all times, liens should be avoided as they have so many disadvantages. For example, if the work is not complete and you need finance to complete it, getting a loan from the bank is not a walk in the park for property that has a lien. Even for buyers shopping for property, any property with a lien raises a red flag for them. You may even find the mortgaging company blacklisting that property after declaring the mortgagee a defaulter. They may even go to the extreme of getting that property from the owner.

It is therefore important to avoid a construction lien at all costs. When starting a construction project, contractors are required by law to give a notice of contract. This states the type of work that is to be done, costs and related information. This is filed with the local clerk. When the project is completed, the contractor files an acceptance. This allows them to place a lien if payments are not made for the work done.

The contractor is normally given 60 days from the substantial complete date to file a lien for non-payment. The notice is what acts as a lien. You as the contractor should follow up and make sure that the acceptance has been signed. This only happens after all the funds and payments related to the job have been satisfied.

On the part of the project owner, one needs to protect themselves. One of the ways to do this is to have a clause in the contract indicating that when one authorizes a lien, they will be responsible. This means that the bills will be upon them and they will also take matters that will deal with unknown liens.

When you authorize work, ensure that you personally pay for it. All purchases need to be receipted and filed also. In case you are concerned about property that first gets to the contractor or subcontractor before getting to the site that is not subject to lien.

Another way to avoid trouble is insisting for the signing of a lien waiver. This is signed by the suppliers and contractors on a construction project. They are supposed to indicate that all payments have been made and that a lien cannot be filed against your property.

If you have a lien filed against you, you will need to bring in a professional on board who will do what they can to free your property. You should not delay this as it matters a lot when it comes to your credit score and will also protect you from being blacklisted.




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