May 13th, 2021

How Mechanic’s Liens Work in California

As a contractor, it’s important to be educated on the lien laws in your state to ensure that your lien rights are protected and that you are getting paid for your work. It’s especially important when you run into a situation where you aren’t getting paid on a project and have to take it to the next level of a mechanic’s lien. Here are some important deadlines to be aware of.

 

20 DAYS

You MUST file a prelien within 20 days of issuing supplies or starting work.

Just like when you are filing a lien for privately-owned property, you need to issue a preliminary notice in order to issue a stop notice. 

90 DAYS

You have 90 days to file lien claims after the completion of the project. 

Unless a recorded notice of completion has been filed. You also have 90 days to act on your lien.  If this deadline is passed, the contractor may not be able to enforce their lien rights and may be required to remove the lien. If the contractor and the property owner agree, the deadline can be extended up to a year.

60 DAYS

You have 60 days after filing a suit to serve the property owner. Once the property owner has been served, the contractor then has 60 days to provide legal documentation of service to the court.

30-60 DAYS

When a Notice of Completion is filed, the due dates are shortened. 60 days for general contractors and 30 days for subcontractors and suppliers. Additionally, project completion is marked by 60 days in which no work has been performed. 

 

 

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June 24th, 2021

Here’s How Project Completion is Defined in Arizona

Defining project completion might sound simple, however, in Arizona, you have a limited amount of time after project completion before their lien filing deadline approaches. So for contractors, it’s important to find out when project completion officially occurred when filing a mechanics lien. If you happen to miss this short window, you could lose your payment rights.

Here’s how project completion is defined in Arizona, and other factors that can impact it.

Deadlines

You must file your lien no later than 60 days after the notice of completion is recorded. You also have the option to file 120 days after “completion” if no Notice is recorded.

Project Completion Defined with No Notice

Project completion might seem straightforward, but actually pinpointing that final date can be complex. Completion is considered the day the general contract is complete, not the day your contract is complete.

There are three main ways project completion can be defined with no notice. The first is when no labor has been completed on the project for 60 continuous days. Another option is 30 days after a Certificate of Occupancy is issued. However, if no certificate is issued or if it’s not followed up by a building inspection and final written acceptance, then the “last date of furnishing” is considered the completion date.

The last date of furnishing is the final day that any labor or materials were furnished to the project.

Completion Factors

  • Change Orders – A change order has the potential to push back the project completion date which as a result could extend your lien filing deadline.
  • Punch-List Additions – This typically isn’t a factor that impacts a completion date. Only significant additional work will have an effect on the completion date.
  • Warranty Work – Warranty-related tasks or punch-list additions (labor or materials) to correct work that did not conform to contract specifications is not considered when determining a completion date.

 

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June 17th, 2021

What is an Arizona Stop Notice?

What is an Arizona Stop Notice?

Did you know that mechanic’s liens aren’t the only method to solve your non-payment problem? We’ve partnered with Udall Shumway to bring you everything you need to know about Arizona Stop Notices. Let’s uncover some commonly asked questions.

How does a stop notice work? 

It’s pretty straightforward, if a contractor hasn’t been paid for a construction job, they have the option to file a stop notice with the lender or owner of the property. The goal of this is to get the owner or lender’s attention and create a sense of urgency for payment. A stop notice will halt the work of a construction project completely and disrupts the flow of any project funds.

Where can stop notices be used? 

Only four states allow stop notices, and Arizona happens to be one of them. Private projects are the only places that stop notices can be used. Any public projects or owner-occupied dwellings don’t make the cut.

Who can use them? 

Any person entitled to a mechanic’s lien, other than the original contractor, can issue a stop notice against the owner. (A.R.S. § 33-1054). Even the general contractor may issue a stop notice against the construction lender.* (A.R.S. § 33-1055)

*Stop notices are not effective against construction lenders unless bonded. (A.R.S. §§ 33-1055 & 1058). Lenders may ignore non-bonded stop notices.

Are there requirements for stop notices be used? 

Yes! In order to get a stop notice, a contractor had to have filed a preliminary notice first, similar to a mechanics lien. If the contractor never filed one, they sadly do not have the option to get a stop notice. So it’s important to make sure you cover your basis and file a preliminary notice for each and every project.

Stop notices are an effective way for Arizona contractors to protect themselves against non-payment if they’re unable to file a lien. Titan Lien Services can help you serve stop notices and send preliminary notices with ease. Contact Titan Lien Services for comprehensive stop notice support.

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May 18th, 2021

Common Mechanic’s Lien Mistakes (And How to Avoid Them)

When it comes to filing your Mechanic’s Lien, it’s important to go through the process with little to no hiccups for all parties involved. Not only for the sake of meeting deadlines but also because those who review the documents are going through it with a fine-tooth comb, diligently looking for any mistakes you’ve made along the way.   Arming yourself with information on what to avoid when it comes to mechanic’s liens is crucial so you don’t invalidate your lien rights. Here are some things to consider: 

Do you fully understand your lien rights? 

Before you start any project, make sure you know exactly what your state requirements are to ensure your lien rights. There are several factors to consider, including if you need a valid contractor’s license, notice requirements and how they are served, and doing it all within the strict time frames set by each state.

Are there any incorrect forms with missing or inaccurate information?

Accurate property descriptions are essential, and this means more than just getting the address right. If you are unsure of an exact address, provide a parcel number or use an aerial map, to provide a visual of the property being improved. Ensure that all other information provided is accurate.

Are you filing on time? 

Liens must be filed before their deadline, otherwise you’ll lose lien rights. Refer to state statutes to know those deadlines or consult your legal counsel.

Did you send a prelien?  

In many states, contractors may be required to send a preliminary notice, notice to owners or notice to general contractors, notifying relevant parties of their involvement on the job. Some states have Intent to Lien requirements before filing a lien.

Are you using the true facts or others opinions?

It’s important to note that lien laws differ state to state, so be sure you are not working off what you “heard from another contractor,” who may be working under different state law.

Never go at it alone!

There’s no shortage of red tape in the lien filing process. A professional lien services firm can help you avoid these mistakes. The smartest move a contractor can make is to not go at it alone. 

 

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April 26th, 2021

Legal Property Descriptions: A Quick Guide for Arizona Contractors

A Quick Guide to Legal Property Descriptions for Arizona Contractors

Currently, only 11 states require Legal Property Descriptions (per A.R.S. Sec. 33-993) and Arizona happens to be one of them. This means contractors have to include the Legal Property Address of the project site when they file a lien. If a contractor neglects to include this, it could result in a lien being considered invalid.

Just a simple address? Sounds easy enough, right? Actually, no, it’s much more than an address. If you were to put a Legal Property Description in your navigation app, it wouldn’t take you to the right place.

What exactly is a Legal Property Description?

In short, a Legal Property Description is a written record of a specific land or parcel. Its main purpose is to provide legal evidence of the property boundaries to guide surveyors in creating property lines. They’re intended for county record offices, so the average citizen might not recognize the language, as many specific terms are used. Because of the unique way these Legal Property Descriptions are created, we’ve put together a quick guide to help you understand why they matter, and how you can acquire one!

A Legal Property Description must always:

  • Include the county and state the property is located in
  • Describe the property in a very specific manner, identifying all the boundaries of a specific piece of land
  • include enough information for a licensed surveyor to use when creating property lines.

Remember that it does not require that the street address be present.

When filing a lien, contractors may make the mistake of: 

  • not including the Legal Property Description
  • describing the wrong property
  • writing an actual physical description of the property

There are three main ways Legal Property Descriptions are written in order to describe the physical features of the property.

  1. Fractional Designation – Using rectangular surveying to describe the land in sections.
  2. Metes and Bounds – Using references, such as streets and rivers, to identify each point of the property.
  3. Lot and Block Survey – Breaking the land into plots or blocks to designate boundaries.

How to find the Legal Property Description of your project site:

Legal Property Descriptions are obtained by searching for them, not writing them yourself. One option is to obtain a copy of the last recorded deed from the county recorder’s office. You can search county recorder’s or assessor’s websites by the municipal address, or owner name to identify the parcel number assigned by the county and possibly access the deed. Legal Property Descriptions are one of many elements that make lien filing complicated.

By providing accurate and specific project locations (address or parcel numbers) for identification on your preliens, Titan Lien Services can take care of these nitty-gritty details on your behalf. Having an expert like Titan Lien Services on your side ensures you don’t have to navigate “legal descriptions” alone!

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April 19th, 2021

Questions You Should Ask When looking For A Lien Service Provider

You have so many options when it comes to selecting the right lien service provider. So it’s critical to do your research and properly think through each of your options. Because of the complexity of each lien document, it’s a decision you should not take lightly. Here are some things to consider that will help get you on the right track. 

How is their attention to detail?

When it comes to lien documents, attention to detail is an absolute necessity as there is so much information. When you are starting your search for potential lien service providers, pay attention to their level of care about the little details. See if they can properly outline each step of the lien process clearly so you know exactly what to expect. 

Is their process simple or complicated?

Protecting your work and lien rights should be straightforward, so if their process is hard to understand, take that as a red flag. Get to know their process and make sure it’s simple and easy to follow.

What are their response times like?

In the world of construction, timing is everything, so you need to make sure that your lien service provider will give you quick and accurate responses. Take a look at each companies customer reviews and make sure this is a highlighted benefit that is mentioned. 

What kind of educational resources can they provide?

Education about your lien rights is crucial as a contractor. If they offer blog posts, seminars, guides, or anything that will help you learn more about your lien rights, that’s a good sign. Check out their website and see if they regularly update resources that will help you answer questions that you might have.

What can they teach you about lien law?

Bottom line, lien service providers can’t give you legal advice. But they can educate you on the laws of your state! If they have added legal educational options, that’s a huge plus to look out for.

Are they connected to any lawyers?

A strong network of credible sources can work wonders for you and your business. Ask every potential provider who their legal connections are. You never know when legal action might have to be taken, and it’s a good thing to have in your back topic.

Do they track the right deadlines?

From the start date of a project, to when a prelien was mailed, all the way to the close of a project there are many details worth keeping track of in order to help you stay organized in the lien documentation process. Make sure you know which details are being tracked by your lien service provider, the more detailed the better.

 

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March 23rd, 2021

How Sending Prelims Can Improve Cash Flow

Every contractor knows that cash flow is an essential part of a construction business. However, the downside is that but it can be a challenge to keep up with as project payments can move at a slow pace. You have to take care of your workers and suppliers. Paying them ASAP is critical, however, it takes up cash flow, leaving you in a bind as you wait for payment on other projects.

But what many contractors don’t realize is that sending preliminary notices actually IMPROVES your cash flow. Here’s how it works.

Improves Lines of Communication

Once you send a preliminary notice, lines of communication are made clear from the beginning, so owners and GC’s know exactly what improvements are being made, materials provided and who needs to be paid for the project. 

Payment Alerts

Now that communication has been established, the client has an alert of a payment that needs to be taken care of and they can now prioritize it, and know exactly who should be paid and when.

Quicker Payments

As a result, you may be paid quicker, and the client now eliminates the risk of having a lien on their property as a result of a non-payment, a win-win for everyone!

Fund Other Projects

Now that you’ve been paid, cash tightening is no longer a problem. You are free to now start to fund another project, plan ahead, and continue to operate smoothly.

Keep in Mind

Owners Want to Avoid Property Liens

If for whatever reason a project is not paid for, a mechanics lien may be the next step. This is a document that states that unpaid construction businesses can freeze the property, which is something owners want to avoid at all costs. Sending prelims ensures that the owner knows who is working on the project so they can pay the appropriate contact, and avoid having a mechanic’s lien on their property

 

Improves Supplier Relationships

The sooner you are able to pay your supplier, the happier your supplier is. Building a long-term relationship with a quality supplier is one of the many keys to a successful business. If you can’t afford to pay your supplier it could stop production entirely, resulting in a delayed project.  With cash flow coming in quicker from sending in your prelim, you are able to get your suppliers paid quicker, resulting in efficient project management! 

 

Improve your cash flow with our easy-to-use online portal where you can send prelims and track payment progress on any project starting at just $25.00! 

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March 19th, 2021

Everything You Should Know About Lien Waivers

Everyone on a construction project benefits from lien waivers as they are an important tool in the construction payment process. Lien waivers are the release of lien rights up to a predetermined dollar amount. This is usually done once payment has been received by the contractor, sub or supplier. No one wants to deal with a mechanics lien when they are at the top of a project, so lien waivers are a critical piece to show a receipt of payment.

Here’s an example of how they are used: A general contractor pays a subcontractor for laying tile. The subcontractor then signs a lien waiver, giving up his lien rights on the amount that they were paid.

They sound simple and straightforward, but actually, these documents can be quite elaborate and long. It’s important for everyone to understand the different types of waivers and how they work.

Different Types of Lien Waivers

There are 4 common types of lien waivers used across the US and it’s important to know which ones to use in specific situations, and most can be broken down into two categories – conditional and unconditional.

Conditional Waivers

Conditional waivers are signed by the owner or contractor receiving services. Once you have completed the work and received payment, the condition has been met.  There are two types of conditional waivers that can be used.

Conditional Partial Payment

Conditional partial payment waivers are used when you expect regular progress payments throughout your work on the job. Once the money is hin have, you commit to lien rights for work performed up to that point. These can be signed in advance without risking your lien rights.

Conditional Final Payment

These types of conditional waivers should only be used when you are expecting your final payment-in-full for what you are owed on the project. They are deemed invalid if you do not receive a complete payment, so you can retain your lien rights.

Unconditional Waivers

In unconditional waivers, lien rights are waived the moment they’re signed – regardless of if you’ve received payment. Similar to conditional waivers, there are also two unconditional waiver options, unconditional partial payment, and unconditional final payment.

Unconditional Partial Payment

This type of waiver is used exclusively when you are expecting regular progress payments and want to release your lien rights for work you have already been paid for. It’s effective as soon as it’s signed and therefore should be executed only when you have the payment in hand. 

Unconditional Final Payment

These lien waivers should only be signed upon completion of the project and receipt of final payment. They are a formal release of all lien rights without protection and should therefore be executed and signed ONLY once you have the money in hand and in the bank.

It’s important to note that not every state regulates lien waivers. In fact, only 12 states have set requirements in place on what must be included in those documents, and if not followed to it’s exactness, it can could result in a penalty. Be sure to read up on your specific state to learn more. 

At Titan Lien Services, we ensure your work is protected by verifying and filing all required documents needed to secure your lien rights. As an added benefit, we also generate lien wavers for free for anyone who uses our portal.

 

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February 26th, 2021

Loss Analysis Of NOT Sending A Prelien

At the end of the day, filing a lien is a  great way for contractors to protect their rights. However, many don’t realize how crucial it is in states where it’s required. If a situation arises where you need to move forward with a mechanics lien, making this first deadline is critical and doesn’t cost you much.

Let’s first took a look at the average General Contractor Fee:

Now let’s look at the savings of sending a prelien versus the losses that happen when a contractor neglects to do this.

Preliens have many benefits, including letting the owner know that the contractor is aware of their lien rights, opens up the lines of communication, prevent further filing of liens, and encourage quick payments to contractors.

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February 23rd, 2021

Should You Send a Preliminary Notice On Every Project?

In short, yes! There are so many benefits to subcontractors who send preliminary notices (preliens) on every project. However, because of negative associations that come with preliens, many become hesitant and don’t send a prelien as part of their business process. As a result, they’re missing out as everyone can benefit from a prelien.

Advantages of Sending Prelims Every Time

The truth is, preliens do so much more good than harm for all parties involved. Here are a few ways your business can benefit from preliens.

They Promote Great Communication

Open communication is key when it comes to keeping the key individuals in the loop! The purpose of a prelien is to notify hire ups, owners, and any other parties of who exactly is involved in the construction project within 20 days of the start date. This also establishes who needs to be paid for the project, and when, giving you the visibility you need to get paid faster.

They Give You a GREAT Business Reputation

Not only does sending a prelien help communication, but it’s also a great way to leave a professional impression on your GC and all others involved. Making sure the project goes smoothly without any unnecessary roadblocks along the way is a great way to position yourself and your business in a positive light.

They Allow Yout To Protect Yourself

Whether you are working with brand new parties or you are familiar with all involved on a project, it’s so important to have yourself and business protected from nonpayment situations. You deserve to be paid for the work you do, and you just never know when situations arise that might lead to filing a mechanics lien. It’s better to be overly prepared just in case than to wish you were covered later on!

They Get Your Paid Faster

With a prelien in place, owners are notified that they have an outstanding payment, which more often times than not, allows your payment to be taken care of first since you’ve taken the initiative to secure your lien rights. 

 

 

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