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Alan Cohen

Mechanics Lien, A Debt Collection Tactic That Contractors And Suppliers Ignore At Their Peril

Construction industry is one of the most financially vulnerable industries in the US with high debt rations, low profit margins and exponential debt recovery failure rate. One of the top reasons includes that many contractors and suppliers don’t have a strong enough understanding about the construction industry laws in Massachusetts. And this is why they often find themselves struggling to collect their long due payments that they have earned by supplying raw material for or rendering services to the construction project. Some struggle through for payments while others just give up especially if they don’t have a written contract with the property owner or general contractor.

Due to the lack of awareness and knowledge about the law, what suppliers and contractors don’t know is that even if they don’t have a written contract, they still have a chance to recover their monies in full by using mechanics lien.

It’s important to understand that entering into a contract without knowing about your rights shows that you’re ignoring the law at your own peril; and that’s a dangerous thing because debt recovery can take years and even a lifetime if you don’t have experienced debt collection attorney Alan M. Cohen by your side.

Mechanics lien laws provide protection to contractors & suppliers struggling to recover their debts. They exist all across the US including Massachusetts protecting contractors and suppliers against the non-payment risk. In case if you, the supplier or contractor, doesn’t get paid for your services or material supplied, under the law you can secure the debt by filing a mechanics lien.

mechanics lien acts like collateral, helping to cushion you from the loss. It becomes collateral possibly guaranteeing payments to those furnishing materials or services. In 1997, the mechanics lien law in Massachusetts was revised stating that the correspondence held via email also provides sufficient written offer & acceptance evidence (similar to a formal written contract). By hiring our experience debt collection lawyer who has a strong know-how about mechanics lien and construction industry laws, we can help you recover your monies.

Here’s how our attorney can help:

First our attorney will review your case to see if you’re eligible to exercise the mechanics lien right. If yes, we’ll prepare the documents necessary to file your case. These include:

  • A Notice of Contract, and
  • A Statement of Account

These documents are essential and much needed to benefit from the mechanics lien. Mechanics lien will help you to secure payment of the debt that is owed to you. The collateral/security in this case will be the underlying property where services were provided, or materials were supplied and/or used. In other words, the construction project or job site becomes the collateral.

Here an important thing to note is that our attorneys at the Law Offices of Alan M. Cohen LLC will assess your case in depth to see that whether or not you match the criteria for filing a mechanics lien in Massachusetts. Although in general a mechanics lien can be filed by a business entity or an individual with a written contract that mentions that they have provided services or supplied raw material for construction project, or land development, even if you don’t have it you may be eligible to file a mechanics lien in Massachusetts under the changes that have been made in the law in 1997.

Also, since 1997, the definition of what constitutes a written contract has become more expansive, yet some writings don’t count. So, whether you are eligible to file a mechanics lien and use this debt collection tactic for recovering your monies or some other tactic can be best determined by our experienced debt collection lawyer.   

How Does Mechanics Lien Help in Debt Recovery

Please note that filing for mechanics lien doesn’t mean that the construction property will get sold off at auction immediately to recover your debt. Simply put, don’t confuse it with foreclosure. It is not an immediate foreclosure proceeding. It is an action that is required by the law to claim the project property or project jobsite as collateral for debt recovery when the debtor fails to or intentionally doesn’t pay money to you for your services or material that you have supplied.

Here are some more consequences to filing for a mechanics lien:

  1. It may prevent the jobsite or construction property from being sold, transferred or refinanced.  Therefore, to sell, refinance or transfer the project property, the general contractor must pay the dues outstanding or they may record a bond securing the payment secured by the mechanics lien.
  2. By exercising this legal action, you don’t have to wait for the general contractor to make full payments whenever they want to or write them off as bad debts because the general contractor just seems to prolong or delay the payments due or is hard to reach. With a mechanics lien, the parties on the construction project such as the general contractor may immediately put in contractual default. This puts a great deal of pressure on them to address the debt payment.
  3. Also, another aspect of mechanic lien is that in certain circumstances it can serve as a means of stopping the real estate development or construction work in progress unless and until the debt is paid.

Contact us today

For more information about mechanics lien or service assistance, call on (508) 620-6900 or email us at acohen@collections-law.com. Discuss your case with us and we’ll provide you with quality guidance and assistance every step of the way to assist in smooth debt recovery

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