Whats Delaying Your Construction Payment

What’s Delaying Your Construction Payment?

Written by CNSFebruary 18, 2022

Slow pay, short pay, and no pay issues are notorious in the construction industry. Whether you’re a contractor, subcontractor, or material supplier, the odds are that you’ve experienced this — likely more than once.

Payment delays are frustrating and can lead to serious cash flow issues for your business and other projects where you need to supply materials, invest in equipment, etc.

Fortunately, there are tools at your disposal to protect your right to payment, such as preparing a preliminary notice at the start of a project or filing a mechanics lien.

Sometimes, however, you could be making simple mistakes that are stopping you from getting paid on time.

Below, we’ll explore some mistakes that could be delaying your payment that you might be unaware of.

And remember always to send a preliminary notice for every project. Whether you made a mistake or not, you deserve to be paid for the work you’ve completed. Prelims help protect your payment rights.

To get a prelim started, send us a message or call us at 800-366-5660.

 

Reasons Why You’re Not Getting Paid

Oftentimes, payment issues are due to invoicing mistakes.

Given the busy schedules of contractors, subcontractors, and material suppliers, it is understandable that things can be overlooked or forgotten.

But by being aware of a few common mistakes, you can potentially solve many of your payment issues. Here are some of the most common mistakes that delay payments.

Unapproved Change Orders

Change orders occur often during construction projects. Sometimes a property owner, property manager, or another party may request a change to the scope of the work.

Because of the nature of these changes, work tends to begin almost immediately. Unfortunately, most construction contracts state that change orders will not be paid for until the general contractor approves them.

So even though you might’ve carried out the change and billed for the appropriate materials and manpower, your payment could be delayed by the simple fact that the GC hasn’t reviewed and approved the change.

Overbilled Projects

Another common reason for invoices not being paid is overbilling. Overbilling is when an invoice bills for a larger percentage of the work than what has been completed.

This can happen either as a mistake or because you’re close to finishing, so you bill ahead expecting to finish the remaining work soon after.

While some general contractors are okay with this practice, others will refuse to pay for work that has yet to be completed.

Missing Waivers & Documents

Certain projects will require additional documents with each submitted invoice. These documents are often certified payroll reports, sworn statements, or conditional and unconditional waivers.

Forgetting to submit these attachments will likely delay your payment since the GC will be unable to submit the total draw request to the owner.

Filling out conditional and unconditional waivers and releases can be time-consuming. To make the process easier for you, CNS offers our clients a free construction lien waiver generator when they do a preliminary notice with us.

Our secure database auto-populates each waiver with your project information, so all you have to do is print it, sign it, and send it.

Late or Nonexistent Invoice

One sure way to not receive your due payment on time is by sending your invoice late or forgetting to send it altogether.

With so many responsibilities to juggle, it can be easy to forget about your invoice. However, general contractors have deadlines when they need invoices submitted.

Failure to meet the deadlines will result in your delayed payment and could even delay the payment of everyone else on the project.

 

When To File A Mechanics Lien

While some of the above mistakes could be the reason why you’re experiencing slow, short, or no pay situations, unfortunately, sometimes it is out of your control.

Payment issues can arise due to cashflow complications within the project or other general contractor or property owner problems.

If the general contractor or property owner refuses to pay you for your work, you can file a lien against the property. At CNS, we can help you prepare and file your mechanics lien to protect your payment rights.

Contact us today to get a mechanics lien started ⇢

Prefer to call? You can reach us at 800-366-5660.

 

Disclaimer: CNS is not an attorney, and if you need legal advice, please contact one.

Read More
Incomplete Prelims

Can You Send an Incomplete Preliminary Notice?

Written by CNSJanuary 26, 2022

In an industry plagued with payment issues such as slow pay, short pay, and no pay, preliminary notices are the first step toward protecting your right to payment.

Unfortunately, there are strict rules and requirements when preparing prelims that differ from state to state. Because of the different guidelines, contractors, subcontractors, and material suppliers can sometimes make prelim mistakes that render them invalid.

Other times, information regarding the project may not be readily available, which prompts the question, can you send an incomplete or inaccurate preliminary notice?

The simple answer is no. You should not send an incomplete or inaccurate prelim, and we will detail why below.

Don’t let preliminary notice deadlines pass you by! Get one started with CNS by sending us a message or calling us at 800-366-5660.

 

The Dangers of Missing or Inaccurate Pre Lien Information

Prelims can be powerful tools for protecting your right to payment. They are a prerequisite to filing a mechanics lien, so sending an invalid prelim can result in you losing your lien rights.

That means that an incomplete or inaccurate preliminary notice will create a chain reaction that will prevent you from filing a valid mechanics lien for payment owed to you—if your payment issues come to that.

An invalid preliminary notice will also notify your general contractor that you have no concrete lien rights.

If payment issues begin to arise in the project, it could affect your chances of being paid on time since the general contractor will know that you do not have legal leverage to halt the project.

What Happens If a Service Sends an Inaccurate Prelim on Your Behalf?

Prelim services can be incredibly helpful when preparing preliminary notices.

They save you time and resources by researching critical information on their end, and they can help ensure accurate and timely sends.

However, not all pre lien services are created equal.

Many service providers utilize automated systems that send out incomplete prelims when they can’t find the necessary information or if their client doesn’t approve said information in a given time frame.

While it’s logical to think that sending an incomplete prelim is better than no prelim, it can actually cause more harm than good—given the reasons stated above.

When seeking assistance with your preliminary notices, remember to pay close attention to the process and customer service provided.

 

Reliable Preliminary Notice Services

At CNS, we prepare our customers’ prelims with the highest level of attention and care to help protect their right to payment.

Our preliminary notice services include a research and verification process where our team contacts the appropriate entities to gather critical information regarding your construction project.

We also assign you a dedicated customer representative to understand the ins and outs of your business, learn how you like to move through the process, and keep you informed of any pertinent information or actions that you need to take.

Unlike other services, your CNS customer representative will contact you directly if our researchers find any issues or conflicts with your pre lien information.

We NEVER send out incomplete preliminary notices or leave important messages in automated inboxes where they could be missed. As an extension of your business, we will always keep you informed.

Contact us today to get a preliminary notice started ⇢

Prefer to call? You can reach us at 800-366-5660.

 

Disclaimer: CNS is not an attorney, and if you need legal advice, please contact one.

Read More
How Does Mechanics Lien Get You Paid

How Does a Mechanics Lien Work to Get You Paid?

Written by CNSDecember 22, 2021

The construction industry is plagued with payment issues, from slow pay to no pay at all. Because of this, contractors and subcontractors need to take precautionary steps to protect their right to payment. One of the first steps is preparing and sending out a preliminary notice.

However, a preliminary notice isn’t always enough to prevent payment issues, but it does ensure that your mechanics lien rights are enforceable.

If you are due payment for your services, you might be contemplating recording and enforcing a mechanics lien. But what does a mechanics lien do to ensure you get paid?

Mechanics liens create a reaction on your project and place pressure on the parties responsible for providing payment. At CNS, we provide mechanics lien services to help you exercise your rights to payment and verify that your liens are accurate and enforceable.

Get a mechanics lien started with CNS by sending us a message or calling us at 800-366-5660.

Continue reading to learn about the various ways in which mechanics liens help get you paid.

 

Filing A Mechanic’s Lien: What It Does

Mechanics liens are powerful tools for resolving payment disputes; however, they can be complex. Every state has its own mechanics lien laws, and it’s important to be aware of them to avoid potential mistakes that could invalidate your lien. The good news is that if filed correctly, liens are very effective in ensuring that you receive your fully agreed upon contracted amount.

Mechanics Liens Give you Leverage

The primary way in which mechanics liens help to get you paid is that they provide you with leverage. If a mechanics lien is connected to a debt owed to you, it will place significant pressure on the parties responsible to get the lien removed before it becomes detrimental to the project. This pressure, in turn, significantly increases your chances of being paid.

Mechanics Liens Get The Attention of Lenders and Owners

When you file a mechanics lien, you are essentially notifying the lender and property owner that you have not been paid for your work. Sometimes these parties are unaware of any issues within the project because they delegate the task of overseeing payment to a general contractor. But aside from notifying the lender and property owner, a mechanics lien also poses major risks for both parties, such as removing the ability to sell or transfer the property and complicating the property’s loan process. Because a mechanics lien can cause significant inconveniences for property owners and lenders, it is in their best interest to provide you with compensation as soon as possible.

Mechanics Liens Encumber The Property

When a mechanics lien is placed on a property, the property cannot be sold, refinanced, or transferred without the debt being assessed or paid first. This is because mechanics liens are recorded with land records and appear on title searches. If someone accepts the property after a lien has been recorded, they also accept it subject to the claim. That means that the buyer and seller of the property must pay you first in order to have the lien removed and be able to execute the sale of the property.

But remember, depending on your state, the mechanics lien is only enforceable for a fixed period of time. For more details about your state, be sure to contact CNS.

Mechanics Liens Set Firm Deadlines

In the event of continuous slow payment issues, a mechanics liens can also be effective. Slow pay is very common in the construction industry and, especially for smaller businesses, it can delay and cause complications with unrelated projects as it impacts the ability to purchase materials and pay employees. Mechanics liens set firm deadlines for the resolution of your claims. If the responsible parties do not pay you within the given timeframe, you can take the claim to court.

Mechanics Liens Are Difficult To Challenge

When a mechanics lien is placed on a property, it is extremely difficult to remove it without first paying the due amount. That is because the right to file a mechanics lien is very well protected in every state. If the property owner or general contractor decides to challenge the claim and loses, many states will place the responsibility of covering all attorney fees on them.

However, for a mechanics lien to be effective, you need to follow all procedures and ensure no technical mistakes are made when filing. CNS can help you with this process. We provide a research and verification process to verify the accuracy of every lien we file.

Mechanics Liens Freeze Money Flow

Construction projects involve multiple parties through which money needs to be exchanged. This is often the reason for many payment issues as the sheer volume of documents, invoices, and pay applications can lead to the misappropriation of money before it ever reaches you. By filing a mechanics lien, you can stop the flow of money to other parties until your claim is paid.

Mechanics Liens Provide You With Legal Claim On The Property

Sometimes payment issues don’t arise simply because the responsible parties refuse to pay you but because they don’t actually have the funds. This scenario can be a nightmare for contractors, subcontractors, and material suppliers, especially if the property owner files for bankruptcy. In these instances, a mechanics lien actually gives you the authority to collect payment from the property itself. The real estate can be sold at auction in order to pay your claim.

 

File a Mechanic’s Lien with CNS

Contractors, subcontractors, and material suppliers often spend valuable time and resources making phone calls and sending emails in an attempt to receive compensation.

Mechanics liens save you time and effort by giving you legal rights to collect what is owed to you.

If you are experiencing payment issues, CNS can help you file a mechanics lien. Our mechanics lien services make the process easy for you and verify your project’s information to help avoid mistakes that could invalidate your claim.

Contact us today to get a mechanic’s lien started ⇢

Prefer to call? You can reach us at 800-366-5660.

 

Disclaimer: CNS is not an attorney, and if you need legal advice, please contact one.

Read More
Construction Payment Issues Cns

How to Spot Construction Payment Issues

Written by CNSNovember 19, 2021

Slow pay, short pay, and no pay situations are harsh realities in the construction industry. They can be time-consuming, stressful, and cause serious issues to your business outside of the project itself.

And while payment complications can arise due to a negligent contractor, they can also be a sign of a serious cash flow problem that could affect the entire job.

Unfortunately, many contractors, subcontractors, and material suppliers experience payment issues, so it’s always best to stay alert for any warning signs.

Although being aware of payment red flags can give you a jump on things, the best way to protect your right to payment is by sending out a preliminary notice for every project.

To get your prelims started with CNS, send us a message or call us at 800-366-5660.

Continue reading to learn about the most common payment issue red flags.

 

Construction Payment Red Flags

Below, we will detail some of the most common red flags that indicate ongoing payment issues within the project or complications that could potentially arise.

Another Contractor Files a Mechanics Lien

Mechanics liens are a serious tool for receiving due pay usually reserved as a last resort after a party has experienced nonpayment or incomplete payment for a construction contract.

If you learn that another contractor has filed a lien, it means that the payment issues have been occurring for an extended period. This could be due to two things: There is miscommunication in payment distribution or there are cash flow issues on the job.

GC Offers to Pay the Remaining Amount in Another Job

A strong indicator that a general contractor is having financial problems is if they propose paying you partially for your completed work and paying you the remainder on another job.

At first, this might seem like an enticing agreement since it would secure you more work. However, if the general contractor is unable to pay you your full amount in the current project, there is no guarantee that the issue won’t arise again later. This could lead to a continuous cycle of delayed or short pay that would ultimately impact your business’s ability to scale.

Property Owners Ask to Change Bid

A red flag that is not often perceived as an issue is when property owners ask for changes to bids — especially during home remodels. Sometimes homeowners will want to replace the flooring, countertops, etc., that had been previously agreed upon as the project begins to take shape.

While this might not seem like cause for alarm, property owners often don’t consider the possibility of added expenses given the changes. The result could be an argument between what the original bid was for versus how much it actually ended up costing.

Property Owners Request Itemized Receipts

Property owners sometimes ask for itemized receipts or material invoices after a price was agreed upon and the project is close to being complete. This should serve as a red flag because homeowners usually want to compare the receipts to ensure they are getting the lowest price on materials. However, they might not realize that materials are often marked up to include time and labor, not simply the raw materials.

If you don’t have a written fixed-price contract, this could quickly turn into a major problem with the property owner refusing to pay the difference between your receipts and what they deem a fair price.

 

Start a Pre Lien With CNS

Even when knowing the warning signs, you may not be able to avoid payment issues altogether. However, noticing the red flags can prepare you for the possibility of slow pay, short pay, or no pay and prompt you to take action by sending a preliminary notice.

At CNS, our preliminary notice services make the process simple so that you have more time to focus on other aspects of your business. By providing research and verification, our team helps ensure the accuracy of the information for your peace of mind. The result is knowing that your payment is protected even when working with customers you might not know well.

Contact our team today to get your pre liens started ⇢

Prefer to call? You can reach us at 800-366-5660.

 

Disclaimer: CNS is not an attorney, and if you need legal advice, please contact one.

Read More
Common Pre Lien Mistakes Cns

Common Mistakes When Sending a Pre Lien

Written by CNSOctober 25, 2021

Preliminary notices are the first step toward protecting your payment for a project and a prerequisite to filing a mechanic’s lien. If you’re unsure of what a prelim is and how it works, be sure to read our article, “What is a Preliminary Notice? It is Your Blueprint for Risk Reduction.”

Pre liens are powerful tools when experiencing slow pay, short pay, and even no pay situations. But for them to be effective, they must contain the necessary legal requirements and be sent on time.

Unfortunately, there are many pitfalls that contractors, subcontractors, and material suppliers run into when preparing their prelims.

At CNS, we provide preliminary notice services to help you avoid common mistakes that could put your right to payment at risk. To learn more about our prelim services and what they include, take a look at our article, “What Goes Into Our Preliminary Notice Services?”

Get your prelims started by sending us a message or calling us at 800-366-5660.

Continue reading to learn about the most common pre lien mistakes.

 

Preliminary Notice Pitfalls To Avoid

Many states have stringent requirements and guidelines when preparing and sending out preliminary notices. Even the smallest mistake can render your pre lien completely ineffective, leading to the loss of your claim rights.

Below we will detail the most common pitfalls to help you avoid such mistakes.

Failing To Send A Prelim

The first and most common prelim mistake is failing to send one altogether. Pre liens exist to notify your customer that you have the right to collect unpaid costs and file a mechanics lien if they fail to pay. By not sending a pre lien, you may forfeit the ability to place a valid lien on the property.

Sending A Prelim Late

Many states have strict timeframes for when a preliminary notice should be sent. Failing to send the prelim on time is just as bad as not sending it at all, as it causes the prelim to become less effective.

These timeframes don’t just vary by state but can also vary between general contractors, subcontractors, and material suppliers. At CNS, we can help you determine the correct time frame for your prelim to avoid sending it late.

Failing to Notify The Correct Parties

Preliminary notices must be served to the property owner, general contractor, and construction lender at the start of a project. Under certain circumstances, secondary ownership parties must also be notified. This information can become increasingly difficult to collect with larger-scale projects, but it is nonetheless essential. CNS provides a research process in our preliminary notice services to help find and verify unknown parties.

Overstating the Pre Lien

Incorrect information in your pre lien can quickly invalidate it, and one of the most common information errors is overstating the amount for services.

The amount stated in the prelim should be a rational estimate based on the principal amount of the contract, subcontract, or purchase order. Trying to anticipate additional expenses that may or may not be incurred could result in the loss of collection rights in the future. This mistake is even more critical when filing a mechanics lien. Learn more about other mechanics lien mistakes in our article, “Common Mistakes When Filing a Mechanic’s Lien.”

 

CNS Preliminary Notice Services

While the above mistakes are some of the most common, there are still many others that can occur when preparing your prelims. And unfortunately, sometimes taking on bigger jobs carries greater risks related to the information that must be present in your notices.

At CNS, our preliminary notice services are designed to find and verify critical information to help you expand your business and work with customers that you might not know well.

Contact us today to get your prelims started ⇢

Prefer to call? You can reach us at 800-366-5660.

 

Disclaimer: CNS is not an attorney, and if you need legal advice, please contact one.

Read More
Preliminary Notice Services Process Cns

What Goes Into Our Preliminary Notice Services?

Written by CNSSeptember 22, 2021

By now, you probably know why preliminary notices are a critical step in securing payment for your work. If you are unsure of what preliminary notices are or wish to learn about the challenges you may face when sending them out, be sure to read our article, “What is a Preliminary Notice? It is Your Blueprint for Risk Reduction.”

So after being aware of all this information, you might find yourself asking why hire CNS to take care of your preliminary notices? Why not do it yourself?

While you certainly can do your prelims on your own, many subcontractors unknowingly send their prelims with incorrect or missing information and outside of their effective time frame. The result is an invalid or rejected pre lien.

Mistakes like these, although costly, aren’t necessarily your fault. The preliminary notice process can be complex — often changing between states and counties — and you can sometimes be provided the wrong information for a project. With many other responsibilities on your plate, it can be difficult to set aside time to track and verify every last bit of required information.

At CNS, we have the expertise and resources necessary to go beyond simply mailing out your notices. We incorporate research, verification, and exceptional customer service for an enjoyable experience that provides peace of mind.

Send us a message or call us at 800-366-5660 to get your prelims started.

Continue reading to learn about our unique, customer-focused process.

 

The Construction Notice Services Difference

Depending on the size of a project, there can be hundreds if not thousands of contractors working at the same time. Much like the game of Telephone, as information on the construction project gets passed from entity to entity, it can often get mixed up and result in omitted or incorrect information altogether. This means that by the time you prepare your pre lien, the information given to you may not be fully accurate.

Our job at CNS is to verify that all information is correct and notify you of any errors to avoid delays in sending out your prelims. We call our customers directly with any pertinent information to prevent it from being accidentally overlooked.

Our Research & Verification Process

At CNS, we provide a robust research process to find missing information in our customers’ prelims and verify its accuracy.

Our research and verification department contacts the appropriate entities to gather critical information. Common information we search for is the project address, the owner’s information, the general contractor’s information, whether lenders or bonding companies were involved, and more. This part of the process can often take 4 to 5 days — time that many of our customers are unable to set aside to do it themselves.

Additionally, since we’re not a collection company, our research team’s calls to verify information are much more positively received by our customers, their clients, and anyone receiving our inquiries.

Learn more specifics about our process and the exact steps here.

What That Means for You

Ensuring that your prelims are sent on time with accurate information helps secure your lien rights for future payment. Our team makes every effort to find the relevant parties that need to be notified so they can be aware of your involvement and that you need to get paid. Being notified of prelims makes it easier for property owners to keep track of everyone working on a project.

Our services ultimately help you get paid quicker and without disputes.

 

Send Your Pre Lien With CNS

At CNS, we pride ourselves on being the leader in customer service for construction notices. We work as an extension of your team and assign you a dedicated customer representative for personalized assistance unique to your business and situation.

Our goal is to protect your right to collect payment for your work.

Contact us today to start preparing your prelims ⇢

Prefer to call? You can reach us at 800-366-5660.

 

Disclaimer: CNS is not an attorney, and if you need legal advice, please contact one.

Read More
Cns Mechanics Lien Filing Mistakes

Common Mistakes When Filing a Mechanic’s Lien

Written by CNSAugust 20, 2021

In order to successfully complete a construction project, it takes an entire team and many moving parts. Unfortunately, all these moving parts can sometimes cause confusion and lead to payment complications.

Mechanics liens are powerful tools for contractors, subcontractors, and others to resolve many of these payment issues. But a mechanics lien is only effective if properly filled out and filed in accordance with each state’s mechanics lien laws.

At CNS, we have almost 4 decades of experience helping people like you file mechanics liens and other construction notices. If you need assistance filing a mechanics lien, send us a message or call us at 800-366-5660.

Continue reading to learn about common mistakes that result in the rejection of mechanics liens.

 

Mechanics Lien Law Mistakes To Look Out For

Since rules and regulations for mechanics liens are very specific and vary from state to state, the filing process can often be complex. Read our article, “State-to-State Differences in Mechanics Liens,” to learn more about the varying mechanics liens laws.

Attempting to navigate the mechanics lien process on your own can lead to costly errors. Even the smallest mistakes can result in your lien being rejected and further complicating your ability to collect due payment.

Failing To Send a Pre Lien

A pre lien, prelim, or preliminary notice, is a document that informs the responsible parties — the property owner, general contractor, and construction lender — that you have the right to file a mechanics lien if they fail to pay you for your work.

Preliminary notices are sent at the start of a project, and many states require them. If you fail to send a prelim in a state that requires them, you could lose your mechanics lien rights altogether.

Contact CNS today to get your prelims started and ensure your mechanics lien rights are protected.

Missing or Inaccurate Information

Mechanics liens have very strict requirements for how they should be filled out and formatted. Everything from minor typos and incorrect descriptions to incorrect page margins and misplaced information can cause your mechanics lien to be rejected.

To make matters worse, each state has its own requirements, and they can even differ between counties. CNS serves all counties in CA, AZ, WA, OR, NV, and AZ to ensure an error-free mechanics lien filing process.

Filing The Lien Too Late

Every state has a strict deadline by when you can file a mechanics lien. Failing to meet the deadline will result in you losing your lien rights. Unfortunately, these deadlines can vary and often cause confusion, so you must know exactly when the deadline is for the state in which you provided services.

Aside from knowing how long you have to file a mechanic’s lien, you also need to know how the deadline is calculated. Some states’ deadlines are counted from the last day you provided material or labor to a project. Others, such as California mechanics lien law, calculate it from the day the entire project is completed.

Allowing the Lien to Expire

Mechanics liens are not evergreen. That means that after a certain amount of time, depending on the state, your mechanics lien can no longer be enforced.

Even if you completed every step of the filing process correctly, if you wait longer than the specified time to foreclose the claim, your claim will no longer be valid and you will be unable to collect payment through it.

 

Filing A Mechanic’s Lien With CNS

There are many challenges that one can run into when attempting to file a mechanics liens on their own. And unfortunately, these challenges can be the difference between receiving your due payment and not.

At CNS, we want to protect your right to collect everything owed to you.

Our services not only help avoid common errors, but they also ensure a professional-looking delivery. Even if all the information is correct, mechanics liens can sometimes be placed at lower priorities if they do not appear professionally prepared. CNS can help ensure that your liens and notices receive the immediate attention they deserve.

For any legal counsel, CNS can also refer you to our wide network of attorneys that specialize in construction law.

Contact us today to file a mechanics lien or send out a prelim ⇢

Prefer to call? You can reach us at 800-366-5660.

 

Disclaimer: CNS is not an attorney, and if you need legal advice, please contact one.

Read More
Cns Stop Notices

What Is a Stop Payment Notice?

Written by CNSJuly 19, 2021

A stop payment notice, also known as a stop notice, is given to notify the property owner, general contractor, and/or lender that the claimant has not been paid for their services, materials, or equipment in a construction project.

The stop notice serves to put a stop to the funds of a project until due payment is received.

Much like mechanics liens and bond claims, stop notices are a resource in the construction industry to protect and facilitate payment. However, stop notices have their unique limitations, and they may not always be the best course of action.

At CNS, we can help you determine when a stop notice would be most useful and provide you with stop notice services. For any questions, send us a message or call us at 800-366-5660.

Continue reading to learn how stop notices can be utilized.

 

Understanding How Stop Notices Work

Stop notices are a valuable tool for subcontractors that have not been paid for their services, usually by the general contractor.

A stop notice notifies either the prime contractor, property owner, or construction lender that payment is due and that they must withhold enough funds to pay your claim before payments continue to the general contractor.

Failure to pay you could result in you stopping work or filing a bond claim.

Stop notices are available on California public works and private projects, making them particularly useful since mechanics liens cannot be placed on public projects. However, before proceeding with a stop notice, you must first understand their restrictions.

Stop Payment Notice States

Stop payment notices are not available in every state. In fact, the majority of states don’t have stop notice laws, making it highly important to do research before sending a stop notice.

Sending a stop notice in a state without stop notice laws will render it ineffective and lead to wasted time and money.

This can be especially problematic when sent as a failsafe to a mechanic’s lien since it will offer no additional protection and could ultimately lead to you losing your lien rights.

Stop notices can generally be sent in Alaska, Arizona, California, and Washington.

At CNS, we offer California stop notice services. If you are working on a California public works project, a stop notice is a common way to protect payment.

Stop Payment Notices Are Only For Unpaid Funds

Unlike mechanics liens that attach to the property itself, stop payments are only effective against a portion of the construction funds that were allocated for the project.

Similar to an “unpaid balance” lien, the stop notice only requires payment of the funds that are due to you. It does not require the general contractor or property manager to issue additional payments.

Stop Notices Are Sent, Not Filed

Stop notices need only be sent to the necessary parties on the project — such as the owner, general contractor, or lender — they do not have to be filed in the property records.

Each state has its own rules set in place for sending a stop notice, but for the most part, a preliminary notice is a prerequisite. Failure to abide by all rules and steps could result in your stop notice being invalid.

One appealing aspect of a stop notice is that you do not have to wait until the completion of a project; they should be served during ongoing construction. However, if the general contractor is paid in full or the project is completed, sending a stop notice will no longer apply — making timeliness critical in the stop notice process.

 

Send a Stop Payment Notice

Stop payment notices usually need to be accompanied by other notices, such as a prelim, in order for them to be effective.

And while the stop notice does not expire in 90 days, lawsuits enforcing the stop must be filed within the state’s given deadline.

At CNS, we can help you send the necessary preliminary notice alongside your stop notice to ensure compliance and the protection of your payment.

Contact us today for assistance sending your California stop payment notice ⇢

Prefer to call? You can reach us at 800-366-5660.

 

Disclaimer: CNS is not an attorney, and if you need legal advice, please contact one.

Read More
Cns Miller Act Federal Projects

The Miller Act: Construction Surety Bonds for Federal Projects

Written by CNSJune 23, 2021

Enacted in 1935, the Miller Act applies to all federally owned construction projects and regulates all payments made on the project.

The Act requires all general or prime contractors to post surety bonds before any contract of $100,000 or more is awarded for the construction, alteration, or repair of federal projects.

Not only does the Miller Act set forth the bonding requirements for contractors, but it also serves to protect subcontractors and their suppliers if payment from the prime contractor is delayed and the government if the contractor fails to complete the project.

It is essential to understand all of the Miller Act’s bonding requirements and laws to work on federal construction projects successfully.

At CNS, we can help you act in accordance with the Miller Act’s regulations to ensure an error-free process. For any questions, be sure to send us a message or call us at 800-366-5660.

Below we will detail the Miller Act requirements and their importance.

 

Required Miller Act Construction Bond Types

The Miller Act requires general contractors to post a payment bond and a performance bond. Although they are separate bonds, they can often be grouped into a single product called a payment & performance bond or P&P Bond.

The payment bond is a surety bond set in place to ensure that subcontractors and their suppliers are paid for their services.

The performance bond is there to protect and benefit the government by guaranteeing the completion of the project by the general contractor.

The Miller Act offers protection for the government, first-tier contractors, second-tier subcontractors, and first-tier suppliers. However, it does not protect general contractors or subcontractors and suppliers lower than second tier.

At CNS, we can guide you through the Miller Act bond claim process in any state: See our states’ services⇢

Protection for the Federal Government

The performance bond required by the Miller Act is set in place to protect the federal government. It must be in the amount that the contracting officer finds acceptable for the protection of the government.

It acts as a deterrent to nonperformance or abandonment by the general contractor, which could cause delays and added expenses for the government.

Protection for Subcontractors & Suppliers

The payment bond guarantees payment to subcontractors and their suppliers and must generally be equal to the total amount of the contract.

Since subcontractors and suppliers cannot send liens against federal property, the payment bond acts as an alternative for securing payment. If the general contractor fails to pay the subcontractors and suppliers, they can bring civil action against the contractor for the unpaid amount.

 

Filing Bond Claims Under The Miller Act

Subcontractors and material suppliers that have not been paid within 90 days of the last day they furnished materials or labor are eligible to file a Miller Act claim to receive payment.

The first step to filing the claim is to provide the prime contractor with a payment claim notice. Next, certain backup information – such as copies of the contract, invoices, purchase orders, etc. – must be sent to the surety. The surety will then review the claim and decide whether to pay it or reject it.

In order to avoid the rejection of payment, all information provided must be correct, and every step of the process must be adhered to.

 

File a Miller Act Claim for Federal Construction Contracts

To successfully file a payment bond claim under the Miller Act, it is crucial that detailed recordings of contracts, invoices, labor, materials supplied, and more be kept.

At CNS, we specialize in helping contractors, subcontractors, and suppliers get paid.

Contact us today for assistance navigating the Miller Act claim process to avoid any mishaps⇢

Prefer to call? You can reach us at 800-366-5660.

 

Disclaimer: CNS is not an attorney, and if you need legal advice, please contact one.

Read More
Cns Mechanic Lien Laws By State

State-to-State Differences in Mechanics Liens

Written by CNSMay 26, 2021

While filing a mechanics lien is not necessarily a lengthy process, it’s a very detailed one.

Each state has its own set of rules that differ depending on the type of project. Any mistake, even a minor one, could result in the invalidation of your non-payment claim.

If you haven’t already, be sure to read, “How to File a Mechanics Lien: The Basics,” to learn more about the state-to-state similarities.

CNS is your go-to resource for construction notices. To ensure an error-free mechanics lien filing process, send us a message or call us at 800-366-5660.

Keep reading to learn about the state-to-state differences when filing a mechanics lien.

 

Lien Laws by State

When working across state lines, you’ll find that differences in mechanic lien laws will require you to change your business processes. As such, it is imperative that you understand the filing requirements for your project’s specific state and county, or you could risk losing your lien rights.

Seeking the help of an attorney or a construction notices expert, such as CNS, can ensure you have lien rights when you need them. Learn how we can help you with the mechanics lien recording process in California, Oregon, Washington, and Nevada: See our states’ services ⇢

Mechanics Lien Time Frames

One of the most important differences to be aware of in construction lien law is lien time frames.

Each state has its own set timeline for when to file the mechanics lien, when to notify the parties subject to the lien, and how long you have to enforce it.

These timelines can also differ between general contractors, subcontractors, and material suppliers. Contact us to learn more about state-to-state time frames.

Sending Out Notices

Aside from time frames, state laws dictate whether you need to send out certain notices before being able to file a mechanic’s lien.

Some states require a “notice of commencement” at the beginning of a project. Other states require that a “notice of intent to lien,” also known as a “preliminary notice,” be sent out.

Not only might the notices differ, but the parties who need to receive the notices may change as well.

Who Can File a Mechanics Lien?

Your part in the development of a construction project will determine whether you’re eligible to file a mechanics lien.

Again, every state has its own rules but generally speaking, general contractors, subcontractors, and material suppliers almost always have lien rights. Be that as it may, it is still important to verify whether you have the right to file or not.

 

Adhere to Your State’s Mechanic Lien Law to Secure Payment

At CNS, we have been at the forefront of preliminary notices, mechanics liens, and similar documents for more than 35 years.

Contact us today to ensure your prelim notice and mechanics lien adhere to the rules and requirements of your project’s designated county and state.

Ask CNS to clear that prelim off your to-do list ⇢

Prefer to call? You can reach us at 800-366-5660.

 

Disclaimer: CNS is not an attorney, and if you need legal advice, please contact one.

Read More