Protecting Payment Series

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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.

Part One on this topic of “How low?” discussed the issue of lien claims by remote claimants.  These can be a surprise to an owner or contractor.  Remote claims might come from suppliers and subcontractors perhaps several tiers deep on a construction project.  The limitation on the rights of remote claimants turns on the definition…

The extent of lien rights down the chain of subcontractors and suppliers is a perennial question. It can mean big dollars at risk for the potential lien claimant as well as for the owner and general contractor.   Which raises the question, who is simply too remote at the margins to have the right to claim…

I have lost count of the number of times I have warned construction industry clients to be careful with lien waivers.  They may seem to be just routine—until they are not.  A recent case from the Wisconsin Court of Appeals; Great Lakes Excavating, Inc. v Dollar Tree et al (March 30, 2021) underlines the importance…

Protecting the right to get paid is central to any business and the construction industry is no exception. The Protecting Payment Series on the Larkin Hoffman Real Estate and Construction Blog focuses on the means and methods businesses in the construction industry use to protect their right to payment. It touches on issues of contracts,…

For mechanic lien claimants having “priority” is a charmed state. Priority refers to the ordering of claims against a piece of real estate. Claims with first priority get paid first from the proceeds of a sale or foreclosure.  Being “junior” can mean no payday at all.

Minnesota, like most states, has its own rules for…

There are clouds gathering now on the payment horizon for the construction industry.  The clouds converging now and on into the fall call for even greater attention to protecting construction industry receivables. This applies to the industry from top to bottom.

Construction was an “essential business” allowed to continue operating in Minnesota.  That designation allowed…

This is the third part in this series. Part Two of this series discussed purchase order contracts for materials which may have a force majeure clause of some description (including possibly in online terms).  Where there is no explicit force majeure clause, suppliers should look to the Uniform Commercial Code (UCC) which provides an integrated…

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…

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…