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. Continue Reading →