As a contractor or construction professional, you might provide free quotes to people who never call you back and begin work before receiving full payment. When you do get projects, you will have major expenses you need to cover, like permits and material costs, before you ever receive payment.
Even if you require a deposit for materials before starting a project, the typical homeowner will not pay for a project in full until you complete the work. The risk is always there that a client will refuse to pay you after you have invested dozens of hours and thousands of dollars in materials for a project.
What protects you in a scenario where a client will not pay for the work performed?
Massachusetts can let you ask for a lien
Those who perform work on buildings and who do not receive payment in full for those services can take the property owner to civil court. Massachusetts can grant a mechanic’s lien to business owners and individual construction professionals who completed projects but did not receive full payment for their work.
Once the courts grant you a lien, you can record it with the county, thereby preventing the property owner from refinancing or transferring the property without first paying you what they owe. In some cases, receiving notice that you intend to take them to court for the unpaid balance owed could be enough to motivate the homeowner to pay you.
Knowing your options for recourse during an expensive construction dispute can help you protect your company from financial losses.