When your business does a job for a contractor or property owner, you expect to receive full payment. Whether you sold lumber, installed carpet or laid the concrete foundation, you offered your service for a price. But when your invoice goes past due, and the contractor’s billing department doesn’t respond to your phone calls, you may worry if you’ll see a paycheck.
Since the early years of the United States, mechanic’s liens have protected construction subcontractors and suppliers. By relying on the person or business that owns the property, you can ensure that you receive money for the work you’ve done.
Mechanic’s liens can ensure payment for past due invoices
When your business signs a contract, you complete your job before sending an invoice. But this means you put up labor and supplies before seeing any payment. Since you have a written agreement, you expect the contractor or property owner to uphold their end of the bargain.
However, if they don’t, you can file for a mechanic’s lien. This action puts a lien against the property. The property owner must ensure you receive payment, or else a court can sell the property and pay you out of the proceedings.
Limits to a mechanic’s lien
To file a mechanic’s lien in Nevada, the person or business that hired you must owe you at least $500 or more. For most cases, they must receive a notice of your right to place a lien no more than 21 days after you finished work. After that, you must give them another 15-day notice before you file your lien.
Once the lien is in place, you have six months to sue the property owner. If you don’t receive payment and don’t file a lawsuit within that time frame, then you can no longer pursue compensation.
A lien may prevent your business from losing money
A contract for work or supplies lays out what you expect to be paid once you are done. But if the party you had an agreement with doesn’t pay, you may worry that you lost out on hundreds or thousands of dollars in labor and supplies.
If this happens to your business, you can use a mechanic’s lien to ensure payment. By relying on the property owner, you can pursue compensation from the people who benefited from your work.