Contracting companies and businesses involved in contracting on any level in Indiana have a right to be compensated for their work or contribution to a project. When they agree to a contract to perform work, the obvious objective is to get paid and make a profit. However, in this industry, there can be obstacles with getting clients to pay whether it is a large-scale or small-scale endeavor. This can have a ripple effect. Non-payment for the project could mean limited or no funds to pay employees, buy equipment, advertise and more.
In some cases, the client simply needs to get their finances in order and they will pay without extensive delay. In others, however, there are problems getting paid and the contractor needs to take legal action. A way to receive payment is through a mechanic's lien. When taking this step, it is imperative to know when and how to do so. It is also beneficial to have legal guidance throughout the process.
Understand the law for a mechanic's lien
Indiana law for a mechanic's lien is in place so anyone involved in construction can receive payment for their contribution. Of course, that includes the contractor and subcontractor who did hands-on work on the project. It also includes others such as equipment providers and laborers.
With the lien, the property is subject to a legal claim so the company or individual can be paid. This will apply to the building that the contractor worked on, the land itself, materials, tools, and machines that were used. While this might seem to be a drastic step, it is often necessary for the contractor or other entity to be fully protected and get what they are owed.
There are deadlines for filing the lien. If it is a dwelling that is owned and occupied, the mechanic's lien must be filed within 30 days of when the work started or items related to the project were delivered. If it is a new structure, the time limit is 60 days.
Contractors, subcontractors and others who are involved in the project need to discuss the matter with the client to try and receive payment. If they are met with reluctance to pay or an outright refusal, it is important not to get into a back and forth that could escalate. There are effective legal remedies to use instead of trying to extract payment from an individual who is not receptive.
Guidance with construction issues is critical to settle disputes
Companies that work on real property have the right to expect payment for their efforts. Unfortunately for contractors, it is not uncommon for them to face obstacles in getting paid. A mechanic's lien is one way to address the issue.
Construction law can be complicated. Whether it is crafting a contract, facing complaints about the work, construction defects or problems getting paid, it is useful to have professional guidance from the outset. This can be a crucial part of running the business effectively and avoiding long-term problems.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
