Top Strategies for Collecting on a Construction Lien

Filing a lien is just the first step in securing payment for the work you have performed or the materials you have provided on a construction project. Collecting on a construction lien can be a challenging process, but there are several strategies that can help increase your chances of success. In this blog, we will be discussing some of the top strategies for collecting on a lien.

1. Negotiate with the property owner or the general contractor: Before taking any legal action, it’s often best to try and negotiate a payment plan or settlement with the property owner or general contractor. The presence of the registered construction lien makes it difficult for the owner to refinance or sell the property. This in itself often results in a quick negotiated solution.
   

2. Foreclose on the lien: If negotiations are unsuccessful, the next step is to foreclose on the lien. This is a legal process that involves suing the owner and selling the property to pay off the debt owed. This should be considered a last resort, as it can be a lengthy and expensive process.
   

3. Use a collection agency: Hiring a collection agency can be a useful tool in collecting on a lien. Collection agencies specialize in collecting debts, and they may have the resources and expertise needed to recover the payment owed.
   

4. Seek legal action: If all other methods have failed, it may be necessary to seek legal action to enforce the lien. This may involve filing a lawsuit against the property owner or the general contractor.
   

5. Monitor the property: It is important to monitor the property to ensure that no changes are made that could negatively impact your lien, such as a sale or refinancing of the property. If a property has been sold it's likely that the amount of the lien has been "paid into court" meaning your lien is still secured. But you will have to obtain judgment to access these funds.
   

6. Utilize technology: There are various technology tools available that can assist in lien management and collection, such as periodically obtaining a title search or searching court files.

In conclusion, collecting on a lien can be a complex and challenging process. However, by utilizing the strategies discussed above, you can increase your chances of success and secure payment for the work you have performed or the materials you have provided. It’s important to remember that every situation is unique, and it may be necessary to seek legal advice to determine the best course of action for your specific case.