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Know your rights when a client won’t pay for construction work

On Behalf of | May 11, 2022 | business litigation

Contractors and construction companies in Kentucky help maintain and improve our local communities. They add new developments and upgrade existing facilities to bring them into code compliance and make them more attractive.

As a professional running a construction company, subcontracting for construction projects or providing crucial construction materials, your services are likely in high demand. Sometimes, you will take on a client who then fails to follow through with payments.

How does Kentucky protect you from non-payment after you have already provided work on a property or delivered materials for a project?

You can request a lien against the property

Kentucky state law allows those who contribute to a construction project to go to civil court and ask for a lien against the property in the event of non-payment by the owner of the property or the construction company that hired the worker. Those who perform work for a construction job and who provide materials have a right to either a mechanic’s lien or a materialman’s lien under Kentucky state statutes.

Provided that you have documentation showing that the other party failed to pay you in full for the work or services they received, the courts may grant you a lien against the property’s title. Once you record the lien, the owner cannot refinance, transfer or sell the property without first paying you and having the lien removed from the title. Securing a lien is one of the most effective ways to compel repayments after you do work or provide materials for a major construction project.

Knowing your rights will help protect your business

No service provider or business owner wants to damage their reputation by dragging  clients through civil court. However, people will not judge a business or professional for seeking payment for services rendered or materials supplied the way that they would judge a more frivolous lawsuit.

Additionally, the very act of filing the lawsuit might be enough to prompt the other party into compliance. A homeowner who was previously unaware that the contractor has not paid the subcontractors that worked on their property could reach out to the business when they receive notice of the lawsuit. Companies may want to pay you and settle so that there is no formal court record of their failure to do so.

Learning the rules that protect you under Kentucky construction laws can reduce the risk you have while operating your business.

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