If you are a supplier, contractor, sub contractor or any kind of service provider to a project and have made considerable investments in the process, then you must be surely eager to recover your payments on time. As nothing really happens by the rule book in most cases especially that involves realization of payments, you have to be smart enough to find out ways of receiving your payments on time. Stop relying on the payment terms of the contract which is seldom honored by the companies. To make them work according to what has been agreed, you have to put pressure on them to release your payments on time. Know about the weapons at your disposal and how to use it judiciously.
Tools at your Disposal
There are many ways of telling companies that you mean business and they have to play the game as per the rules that have been laid down. To make them understand the hard fact, you have to make use of some legal tools that can bind them and put them under pressure that they simply cannot ignore. Make use of mechanics liens and if need be use more than one such tool by adding bond claim and stop notice to it to maximize the pressure that will force them to make the payment or otherwise you can recover your dues from the properties attached to the liens.
Mechanics lien is a document that creates security interest in the title to the property in favor of any supplier, contractor, subcontractor of a construction project and remains in force till pending payments are cleared to them. Failing to make payment can result in the holder of lien staking a claim on the property to recover his dues. Mechanics liens have to be executed within a specified time period and no refinancing can be done on the property as long as the lien exists. In the event of liquidation, liens get a priority over other payments because liens have to be cleared before other payments can be made.
Bond is a document of assurance issued by a bond company on behalf of the construction company promising timely payment of dues to contractors, sub contractors or other agencies working at a construction site. Non fulfillment of the obligations of the bond can result in the bond company making payments to the beneficiaries and then seek indemnification from the principal company that has become a defaulter. This is a sure way of securing your due payments as bond claims guarantee payments that are due.
This document informs both the company and the lender (who finances the company) that payment of contractor, sub contractor or supplier is not being made. Stop notices compel lenders to stop providing money to the company. This technique of throttling finances to the company can work in your favor to get your payment released.
Be guided by a company like lienitnow.com to advise you about the most appropriate tool that can give you the best result in getting your money back.