Tips on Making Payments and Avoiding Liens

Different states impose different laws on liens. In most cases, workmen and businesses are given the right to file a lien against real estate properties. Liens against a real estate imply that a homeowner has unsettled payments that have to be cleared. When liens are filed against a homeowner, payment for the project is in effect doubled.

Liens are meant to protect suppliers and workers who fail to receive payments for products and services delivered. However, even when you do your part and give complete payment to suppliers and workmen, homeowners are not exempt from liens. In most cases, failure is on the contractor’s end – they accidently or deliberately fail to pay the suppliers and subcontractors.

Liens can cause a lot of legal and personal trouble. Avoid problems brought about by liens by following these simple guidelines:

• Before going ahead with any project, be on familiar terms with your contractor and subcontractors. Request a list of workers from your contractor. The list must be complete with all necessary information such as name, address, and task assignment of every worker. A list of suppliers is likewise important.
• Get to know every person involved in the construction and make yourself known to them as well. This shall help you establish a good relationship with them.
• Keep an eye on all activities throughout the duration of the project. Know about the tasks that the workers perform. Make notes and check them against your own list.
• Before making any payment to your contractor, ask for a notarized affidavit from every single entity to whom the payments will be allotted. These documents are almost similar to receipts.
• If possible, issue individual payment checks to each person to be paid. This may be a demanding task but it is definitely worthwhile as it will help keep you out of trouble. Talk to your contractor about such arrangement before the project has started.
• Consult a reliable real estate lawyer before going on with the project. Ask about the documents that you have to obtain before making any payments. Also, ask about the laws in your state regarding liens.