A knowledgeable attorney can help contractors with a construction lien and other methods of receiving payment for work that has been done.
Legal Steps You Can Take to Receive Payment
If you are a contractor concerned about getting paid or if you are having trouble getting paid for your work, you can take the following steps:
1) Arrange for progress payments.
During negotiations, many contractors will ask that some of the money be paid in advance. If the work is completed and nothing has been paid, you might find it difficult to get all of the money that had been agreed upon. With progress payments, this can be avoided. There are several different ways to structure these payments. If the project will take one month to finish, you can ask the property owner to pay a certain amount on one day each week. Another way to deal with this situation is to request that half of the total amount be paid upon agreeing to do the project before any work is done. Once the job is done, you can ask for the remaining 50 percent. These terms can, of course, be adjusted to suit the preferences of you and your client.
2) Discuss the balance with the property owner.
If the owner of the property has not paid you anything or you are still owed a balance when the work is completed, you have to talk to them to sort out the situation. Are they trying to get a better deal by withholding payment? Are they claiming that something went wrong with the project? Is there a supplier or subcontractor claiming nonpayment? If a property owner is trying to renegotiate the deal after the work is done, you have to think about whether you can afford to accept a lesser amount than what the contract called for. It might be preferable to accept the money that is offered rather than having to go through the legal process to get the full amount. When the property owner is alleging that something is wrong with the project, it is best not to get angry. This can be a customer who is choosing to be difficult or there could be a legitimate reason for the complaint. Discussing the matter with the property owner, offering to have a look at the project and see if it can be fixed without spending a great deal more money, or coming to an agreement to do other work as an extension of the original project are all methods that can rectify the situation. If there is a subcontractor or supplier who claims to have not been paid, think about it from the perspective of the homeowner. You were hired to do a job and the client does not want to have to deal with subcontractors’ complaints. If they are not paid, they can cause a problem for you by filing a lien.
3) Filing a lien.
In the event that you are unable to come to an agreement with the property owner to settle any disagreement and you have not been paid, it is possible that the client is being unreasonable. There are also times when you are not responsible for the behaviors of subcontractors and suppliers. It is then that you can consider using the New Jersey construction lien law to file a lien against the property. A lien – also referred to as a “mechanics lien” – is when you file with the county records office to inform the public that you have a claim against the property owner. Your “security interest” will be shown in this filing. Property owners do not want liens against their properties because it can cause problems with them refinancing and selling. The simple act of filing a lien might be sufficient to convince the property owner to settle the case with you. If they do not, you can foreclose on the lien and sue the property owner for what you are owed. Liens must be formatted correctly to be enforceable.
4) File a lawsuit for breach of contract.
Rather than filing a lien, you can sue for breach of contract. This will be brought in civil court or small claims court. The applicable court is contingent on how much is owed. In order to win your case, you must show that the property owner was in violation of the contract. The main evidence might be:
- A copy of the contract
- Pictures of the property before and after you did the work
- Invoices for subcontractors and materials you paid for
- Demands for payment that the property owner has not responded to
Contact An Attorney Experienced In New Jersey Construction Lien Law
If you need assistance with a construction lien, call (973) 265-6100 to speak to Snellings Law LLC today.