Tag: Construction

A mechanic’s lien is a tool to secure payment across all states. However, each state has adopted their own unique set of rules or statutes which must be followed to preserve and protect rights. Nearly 10 years ago, statute laws in Iowa changed, developing a registry for filing preliminary notices on residential projects.

In the intricate world of construction and property development, the mechanic’s lien serves as an essential legal tool, safeguarding the interests of those who contribute labor or materials to a project. The absence of such a tool is a loss of legal protection for contractors, subcontractors and suppliers ultimately leading to larger losses for all involved. Cleveland Brothers Equipment Company is facing that fate in a mechanic’s lien case that has been appealed to the Pennsylvania Superior Court, and the issue to be decided is whether equipment rental companies will continue to have rights…

Filing a mechanic’s lien can be a challenging process. It’s a way to try to secure your rights and receivables, and allows flexibility to extend credit you might not typically extend. Several benefits come out of filing a mechanic’s lien. Firstly, it helps with legal protection and ensures payment from the customer. Mechanic’s liens also benefit subcontractors, customers, suppliers and all parties involved in the project—and can be a great way to maintain your customer relationships.

Protecting security interests is essential for creditors to secure their rights and claims in the event of a debtor’s default or bankruptcy, ensuring the collateral serves as a valuable asset to satisfy debt. To do so, trade creditors can file a Uniform Commercial Code lien, also known as a UCC filing, a legal document that serves as a public notice of a secured transaction, providing information about a creditor’s interest in the debtor’s personal property collateral.

For the past several years, a number of Chapter 11 debtors, typically with significant mass tort exposure, have used a bankruptcy strategy known as the “Texas Two-Step” to resolve mass tort liability in a bankruptcy forum while shielding their operating businesses from the direct impact of bankruptcy.

Contracts are the foundation of construction projects. They provide written documentation of what the scope of the work will be, terms, budget, obligations and more. It is imperative to thoroughly read the terms you will be agreeing to before signing any contract at all.

The construction industry presents unique challenges for credit professionals due to its complicated nature. For example, credit professionals must assess the risk associated with multiple parties involved in a single project. Cash flows in construction often depend on project milestones and payments, making it challenging to predict when and how payments will be received.

The Bipartisan Infrastructure Deal passed in 2021 provided a multibillion-dollar investment of roughly $1.2 billion into infrastructure and waterways, repair and maintenance backlogs, reductions in emissions and other low-carbon technologies. This deal has greatly impacted the construction industry and economy today.

Lien rights grant legal authority for contractors, subcontractors and suppliers to file a mechanic’s lien against the owner’s property or, in the case of a government project, the right to make a bond claim. It is also a security to force payment. But statutory changes like with Texas’ recent property code make it harder to protect those lien rights. In order to protect their lien rights, credit professionals must inform their customers of statutory changes immediately.