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How can your construction company collect on an unpaid invoice?

| Aug 25, 2021 | Business Law

Property owners and construction professionals often have to make minor concessions to one another during major projects. Property owners don’t want to pay everything upfront and risk the contractor disappearing with their money and not doing the work. Contractors don’t want to provide someone with labor and materials, not to receive payment. 

It is common for property owners to pay for supplies or a percentage of the work cost before the project and the remainder upon its completion. Unfortunately, some owners will try to get out of paying the balance owed on the work after the end of a project. What options do you have when someone doesn’t pay your company for work it has completed?

You can place a lien on the property to recover what you’re due

Ownership of real estate comes from the title records for that parcel. When an individual owes money on a piece of real estate, their mortgage becomes a lien against the title. The lien ensures that the lender receives complete repayment before the owner can benefit from a refinance or sale of the property.

 Mortgage lenders aren’t the only ones who can secure a lien on a property. North Dakota allows for professionals who have done work on a property to request a construction lien. Showing proof that you performed the work but did not receive payment in full could convince the courts to grant you a construction lien. 

That lien against the property can effectively compel the owner to make good on their financial obligations to your business. Learning more about your collection options can help you protect your business, possibly through civil litigation.