Sometimes construction material or equipment the contractor buys turns out to be defective. It leaks. A part is missing. Something simply does not function straight from the box. Jumping on the defect claim may not seem to have highest priority in the middle of a construction project. “Back charge” may the automatic response, but it
Protecting Payment Series
This series focuses on the means and methods businesses in the construction industry use to protect their right to payment. We touch on issues of contracts, collections, construction liens and the corresponding interests of the developers and property owners who build. Although the author is writing from Minnesota, the series will focus on a broader application allowing readers anywhere in the country to benefit.
What Happens If You Don’t Have A Lien?
By James K. Sander on
Posted in Construction, Protecting Payment Series
In each state, statutes govern the right to a construction lien. It is almost inevitable that someone, someday, will not meet a required step. The lien is lost, and with it, whatever leverage or payment security it represented.
There is still a balance to collect—unless the creditor has improvidently signed something that also waives the…
Can a “Pay If Paid” Clause Bar Lien and Bond Claims in Minnesota?
By James K. Sander on
Posted in Construction, Protecting Payment Series
This continues our blog post series on protecting payment in the construction industry. In this post, we ask the question, “Can a Pay If Paid clause bar a Minnesota lien or bond claim?” Despite the contract language, the answer might be: no.
Contingent payment language is common in contracts between prime contractors and subcontractors. The…
What Surprises Lurk In That Certificate of Insurance?
By James K. Sander on
Posted in Construction, Protecting Payment Series
This is a relevant concern not only for any project owner or developer that requires a certificate of insurance from the prime contractor. Certificates of insurance are used so commonly as proof of insurance that they may tend to be a “check the box” item that just goes into the project file without a careful…
Slow Paying Customers Can Bring a Contractor Down
By James K. Sander on
Posted in Construction, Protecting Payment Series
This is the eighth in our series of posts on protecting the right to payment in the construction industry. I have recently seen a couple of blog posts highlighting a survey from late summer (Rabbet Partners and Procore; 2019 Construction Payments Report). The survey reported that the direct and indirect costs of slow payment to…
The Importance of Lien Waivers
By James K. Sander on
Posted in Construction, Protecting Payment Series
Lien waivers do not get the respect they deserve in the realm of protecting the rights to payment in construction. In a prior post in this series we shifted the focus to the owner’s perspective on the problems of liens and payment including the need for collecting lien waivers. Lien waivers are important to both…
Using Payment Bonds to Protect Payment Rights in Construction
By James K. Sander on
Posted in Construction, Protecting Payment Series
This is the sixth post in our Construction series, Protecting Payment. In the last post I suggested surety bonds as one way an owner could either avoid or “remove” liens. Consistent with our focus on the theme of protecting the right to payment, this post will focus on payment bonds for private construction. Payment bonds…
Protecting Payment–The Owners Perspective
By James K. Sander on
Posted in Construction, Protecting Payment Series
This is the fifth in our series of blog posts regarding the protection of the right to payment in construction with a focus on mechanics and construction liens. This time the focus is reversed.
There are obviously two sides to the payment and lien equation. An owner’s perspective on lien claims is that there should…
What is a Lienable Contribution?
By James K. Sander on
Posted in Construction, Protecting Payment Series
This is the fourth in a series of posts addressing the protection of the right to payment in the construction industry using construction lien rights as a tool. Prior posts reviewed the information and analysis needed to identify available lien protections and the early notices many states require. This post highlights the fact that things…
Early Notice May be Required to Qualify for Lien Protections
By James K. Sander on
Posted in Construction, Protecting Payment Series
This is the third in a series of posts on protecting the right to payment in the construction industry. In the last post we reviewed the information and analysis needed to identify the protections available in a given situation. Collecting and acting on good and focused information are the key.
Next, however, comes the need…