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What can contractors do when clients don’t pay for a project?

by | Oct 13, 2022 | Construction Practice

Working in construction often means investing in quotes and estimates that don’t result in projects. You may even make bids that require large-scale presentations. By the time someone decides to hire you, you have probably invested many hours into considering and planning their project.

When they do hire you, they will likely want to pay you only a portion of the total cost up front. Clients do this for their own protection and so that they have leverage if a contractor doesn’t complete the project or an issue with their work arises.

Depending on the payment arrangements, you might receive very little money before you provide supplies or begin work on the project. What right do you have if you don’t receive payment in full for the services that you provide?

You have the right to request a mechanic’s lien

Pennsylvania state law allows those who work on a project or supply materials for it to place a mechanic’s lien against the property where they have performed work or provided those supplies. If the property owner or the contractor that hired you as a subcontractor or supplier fails to pay you in full, you can go to court and ask for a lien against the title of their property.

They have to pay you to remove the lien, and removing the lien is necessary if they want to sell or refinance the property.

Who qualifies for a mechanic’s lien?

To qualify for a mechanic’s lien, you need to be a subcontractor or supplier that provided at least $500 worth of goods or services. Provided that you work with the property owner directly or under the primary contractor, then you likely have the right to request a mechanic’s lien for an unpaid project in Pennsylvania.

You need to have paperwork and other documentation affirming a professional relationship with the property owner or a company hired by the property owner to seek a mechanic’s lien. You will also need to take action in a timely manner so that you don’t lose your right to request a lien.

A successful mechanic’s lien request can push someone into paying for the services or supplies you have already provided. Learning more about the protections included in Pennsylvania construction laws can help you feel more confident about accepting big projects without full payment right away.