Is filing a lien necessary before agreeing to a project? This topic is more in the legal realm, so you should speak with an attorney about this. However, we’ll provide our input based on our own experience of working with various seasoned contractors.
As a contractor, you have lien rights on any of the work you complete. Let’s say you complete a $2,000 interior remodeling job (factoring in labor, materials, and subcontractors). In this instance, you have lien rights on the home for that exact amount. Filing a lien is essentially insurance on your end. If the client is unable or unwilling to pay for the work, then you can foreclose on the lien. This forces the sale of the property, allowing you to collect on the owed payment.
Without a lien, you may also be held legally liable if you’re unable to pay your subcontractors.
By law, contactors must file a pre-claim notice, also known as an Information Notice to Owner. This notifies the client that you intend on filing a lien. This is required for any contract work valued at a minimum of $1,000. For commercial contracting work, you must file a pre-claim on work estimated between $1,000 and $60,000.
We must reiterate that we’re not law experts on this subject matter. Consult with a lawyer and don’t take what we say as scripture. We know for a fact, though, that a lien is a cautionary step that protects your business in a worse-case scenario.
Cover your back for all interior and exterior project undertakings. Contact Remodeler’s Exhibit for all your material and promotional needs. We firmly believe filing a lien as a contractor is a pivotal step for business financial protection.
Edited by Justin Vorhees
Serving Customers in Kent, Puyallup, Auburn, Bonney Lake, Covington,
South Hill and Maple Valley