Michael P. Edison wrote:

> As for mechanics liens, they can be very effective in
> certain states if the property owner is more substantial than a paper shell
> designed to shield him from creditors.

I undertand that a mechanic's lien only covers the cost of labor, and does not
include overhead and profit. The intent is for the tradesperson to be able to
recover their wages -- not as a benefit to the contractor. Each state seems to
have different rules. In NY you have 3 months following the end of the project
to file a mechanic's lien. In NJ I understand that you have to file when you
start the project (I do not understand the logic in this - then again, I may
have been lied to). If you want to take the time to get the paperwork done you
can file them yourself, otherwise you have to figure the extra cost of a
lawyer's filing. You have to make sure liens are filed properly and against
real owners. We have only had recourse to file a mechanic's lien a few times.
In all of the cases the owners NEVER intended to pay for the work. We used to
belong to the Subcontractors Trade Association which would send out a monthly
list of all of the mechanic liens filed in NYC. There were mechanic liens filed
in the several millions. The best part of the list was giving an idea of who
NOT to do business with and which projects were in trouble. Filed liens are
public record, meaning we all have a right to the information if we can find
it. You have to renew the liens, or they are forfeited. In one case we renewed
the lien for six years and had to go to forclosure on the property. The effect
of the lien is that the owner of the property is inhibited from selling or
refinancing the property. If they never intend to sell or refinance then you
can wait a long time. What the lien means is that you are in line as a creditor
and that your claim has to be settled before the next claim in line can be
satisfied. Your only hope is that the next claim in line, or further down the
line, is really strong. A more powerful tool is that if any government
(federal, state, local) money is used to finance the project then your lawyer
can insist on opening the books, again, public record. This can be enough to
scare anyone into paying their debt, though I suggest you consult a lawyer
first to make sure it is applicable. The best thing is to develop relationships
before doing business. If you suspect your draw on the project is going to be
diverted into the owner's paying for his daughter's wedding, think twice.

> The only ones who scream are the ones who were planning on cheating you in
> the first place.

True enough.

][<en Follett