How to Efficiently Safeguard Your Interests with Lien & Bond Protection
When it comes to securing payment on high-dollar construction and equipment projects, lien and bond rights are some of the most powerful tools available. However, protecting those rights isn’t automatic-it requires precision, proactive tracking, and strict adherence to deadlines. Missteps, even small ones, can completely forfeit your ability to collect.
Here’s how you can efficiently safeguard your interests and streamline the lien and bond process:
Start with Solid Documentation
To support a lien claim, you need factual, organized records. You should consistently maintain:
- The Contract
- Job Level Tracking
- Credit Supplement Sheets
- Notices (Preliminary, Notice of Intent, etc.)
- Individual Invoices
- Proof of Delivery to the Jobsite
Without this backup, you won’t have the documentation needed to sign the lien affidavit. In fact, missing required notices can invalidate your lien entirely.
Prioritize Timely Notices
Each state has its own strict deadlines and notice requirements that, if missed, can be fatal to your lien rights:
- Utah: Preliminary notice must be provided within 20 days from first furnishing. It must be filed through the state’s central registration office. Failure to do so waives lien rights.
- Missouri: A 10-day Notice of Intent to Lien must be served to the property owner before filing. If the request comes less than 7 days before the deadline, you may be out of time.
Recommendation: Always send notices via certified mail and keep receipts. This documents the delivery timeline and helps ensure your notices are legally valid.
Confirm Proof of Delivery
It’s not enough that materials are shipped-you need to prove they made it to the jobsite. Proof of delivery confirms the last furnishing date and supports your lien rates. Materials sitting at a customer’s warehouse or another offsite location won’t count.
Verify the Correct Owner
Sending preliminary notices to the wrong owner can cause you to lose your lien rights entirely. Before sending notices, confirm ownership records to ensure you’re sending them to the legal property owner.
Engage Legal Support Early
Working with your legal partner early in the process is key. Request lien and bond assistance from your attorney at least 14 days before the filing deadline. Gathering backup from branches or project managers should start at least 20 days before the deadline.
At WFJ, we encourage you to reach out as soon as you identify a potential issue. Even if you’re unsure of the next step or don’t fully understand what’s being requested, we’re here to help walk you through it. We can also assit with opinion letters and answer questions along the way.
Takeaway
Safeguarding your lien and bond rights requires proactive planning, meticulous recordkeeping, and attention to deadlines. When these steps become part of your regular credit and collections process, you’ll protect your right to payment and dramatically reduce your risk.
If you need help navigating the process, our team is always happy to get on a call and guide you through it.