Lien/Bond News
8/12/2010 3:09:31 PM
National Lien Digest & LienTracker Updates
The National Lien Digest and LienTracker were updated in July, 2010. All subscribers should have received notification. If you have not, please let us know. The updates included:
* Mississippi
* South Carolina
* Guam
* All Canadian Provinces
* Glossary
* Notices by State (Private)
* Notices by State (Public)
* Full Balance vs. Unpaid Balance Lien States
7/8/2010 4:45:00 PM
TENNESSEE—HB3159—Retainage and Deposit of Funds
As enacted, this amendment specifies that if a party withholding retained funds in regard to a construction contract fails to deposit the funds into an escrow account, the party would be responsible for paying the owner of the retained funds an additional $300 per day for each day that the retained funds are not deposited into an escrow account; specifies failure to deposit retained funds into an escrow account within seven days' receipt of written notice regarding such failure is a Class A misdemeanor. - Amends TCA Title 66, Chapter 34, Part 7. Click here to read the full text.
7/8/2010 4:40:55 PM
OKLAHOMA—SB573—Retainage on Public Works Projects
This bill affects public buildings and public works; relates to retainage of payments in certain construction contracts; and reduces maximum percentage of retainage allowed in construction contracts. Click here for full text and enter "SB573" in the search box.
7/8/2010 4:30:01 PM
OKLAHOMA—SB1012—Requirements for Bid Project Contracts & Payment Requirements
This bill establishes requirements for certain bid project contracts and provides for inclusion of certain payment requirements on certain bid contracts. Click here to view the full text. Enter "SB1012" in the search box.
7/8/2010 4:20:33 PM
ARIZONA—SB1375—Prompt Payment Provisions
This bill outlines requirements and regulations for the release of retention or final payment to a contractor. It expands and stipulates contractual language for the release of retention, final payment and progress payments. Click here to read the full bill.
6/23/2010 4:23:17 PM
NORTH CAROLINA—Superior Court Ruling—Lien Waivers
In Wachovia Bank v. Superior Construction Corporation the Superior Court has ruled that the lien waiver can, based on the wording of the waiver in this case, release and waive liens through the date of the last lien waiver. Where typically the lien relates back to the contractor’s first furnishing date, under Wachovia, the claimant’s lien will date back only to the date of the last lien waiver, allowing the lender’s deed of trust to take first priority even though it was recorded after the date of first furnishing. It is imperative that lien waivers are reviewed before they are signed, to ensure that the priority of the claim is not jeopardized. Click here for copy of order.
6/11/2010 9:08:13 AM
Building on 40 years of experience, NCS is proud to introduce the next generation of The National Lien Digest.
Click here to see a special sneak preview!
4/24/2010 10:29:00 AM
Licensing of Elevator Contractors and Mechanics in Utah
The Utah statute has been amended to provide for the licensing of elevator contractors and elevator mechanics in Chapter 55 of Title 58, Utah Construction Trades Licensing Act.
The legislation:
- Provides qualifications for licensure of an elevator contractor and elevator mechanic.
- Provides for an emergency temporary elevator mechanic's license.
- Provides for exemptions.
- Provides a continuing education requirement.
This legislation is viewable at
http://le.utah.gov/~2010/bills/hbillenr/hb0011.pdf
Unless noted otherwise, Utah legislation typically becomes effective within 60 days from the date the legislature adjourns (60 days from March 5, 2010.)
4/19/2010 12:58:00 PM
Beware! Oregon Statute Requires Contractors Be Licensed
The passage of Oregon HB 3689 prohibits those who provide material, equipment or labor from filing a lien if they furnish the material, equipment or labor to an unlicensed contractor. This applies only to projects to renovate, remodel, repair or otherwise alter an existing owner-occupied residence.
This legislation can be viewed here:
http://www.leg.state.or.us/10ss1/measpdf/hb3600.dir/hb3689.en.pdf
11/13/2009 12:52:00 PM
New Legislation from Utah Applies to Narrow Scope of Projects
The State of Utah passed legislation, effective October 1, 2009, under SB 230. These provisions will only apply to a narrow scope of projects. The project must:
- be private;
- be over $500,000;
- be completed within 120 days; and
- have no payment bond.
If the above requirements are met,
the owner has 45 days prior to filing their Notice of Completion to file a Notice of Intent to file a Notice of Completion. A copy of the Notice of Intent is emailed to all those who filed a preliminary notice on the State Construction Registry (SCR). Within 10 days of receiving the Notice of Intent email, all potential lien claimants must provide the owner an estimate of the balance owed, and, if disputed, an explanation of the dispute. This is done on the SCR.
Once the balance is entered on the SCR, a notice must be mailed (certified) to everyone who owes the claimant money, which basically says,"We entered our balance on the SCR and we demand assurance you have sufficient funds to pay us." There is no deadline for the assurance to be provided. If not provided, you can then sue and have the court force them to prove assurance of funds.
The statute clearly says it does not affect the mechanic’s lien statute, so lien rights appear to remain intact even if the new procedures are not followed. However, the statute does not address how these requirements affect the statute under payment bonds that provides for a cause of action against the owner if no payment bond is required on a contract over $50,000.
From a practical standpoint, it would not seem worth the time and expense to follow these procedures and to sue your customer for the assurance they have the funds to pay you, especially when you can proceed with a lien regardless of the new procedures. However, it is not clear whether you would still have a cause of action against the owner for failing to require a bond if the new procedures were not followed.
The NCS attorney in Utah has advised that he expects corrective legislation to follow.
Click here for more information.
10/16/2009 3:35:00 PM
Important Changes in Pennsylvania Lien Laws
Pennsylvania Senate Bill 563 became effective October 10, 2009.
The new law provides that a waiver of lien rights may be filed, preventing liens from attaching to residential property. Previously, no-lien agreements were available only on residential projects with general contracts under $1 million. Now, a waiver of lien rights may be filed on any residential project, regardless of the contract value.
8/10/2009 2:30:00 PM
Efficient. Paperless. Secure.
Your documents will now be stored electronically in a secure central location, easily accessible 24/7 from anywhere, allowing you to work more efficiently.
» Virtual File Cabinet: You can easily access all completed documents with just a few clicks of your mouse.
» Efficient and Organized: Everyone with access to a contact’s portal can view the documents.
» Paperless Archiving: Documents do not need to be printed to maintain a copy.
» Easy Email Retrieval: The subject line of the notification email will now include your reference number and debtor name.
» Simple: The text of the email will describe the next action and time frame, along with any pertinent notes.
» Comprehensive Storage and Archiving: Other legal documentation (notices of commencement, payment bonds, etc.) and any written communication received in response to a provided service will be included in your document pool.
» Environmentally Friendly: Paperless records mean less waste while conserving resources.
7/7/2009 3:48:51 PM
White Paper: Paving the Way for Economic Recovery
Part of President Obama’s American Recovery and Reinvestment Act pledges to improve infrastructure and modernize public buildings throughout the country. In addition, Congress has approved billions of dollars in work through normal highway funding. Even with the promise of all this new construction, it is critical you know how to protect your receivables when contributing materials or supplies to a federal construction project. This white paper discusses in detail how the Miller Act can protect you during this time of economic recovery. Download it here.
6/24/2009 11:15:46 AM
November Construction Slides 3 Percent
November construction starts fell 3 percent from the previous month to $454.5 billion (annual rate), the weakest level so far in 2008. Read the full article from the December 2008 issue of Market Dynamics, published by McGraw-Hill Construction.
6/24/2009 11:09:36 AM
Generation Renovation
Many of our customers are dealing with the realities of the economic recession: lower sales, reduced operating budgets, increased customer defaults, bankruptcies and layoffs. During these harsh times, NCS continues to stand as a steady partner with our clients' credit departments, ready to provide them with expert guidance and support to secure their tomorrow.
One way NCS is doing this is through Generation Renovation: A newly constructed notice to owner program featuring three generations of options—Attorney Notice, Premium Notice and Express Notice—based on your level of need. This program will officially roll out in July 2009. For more information on our upcoming new notice program, contact us at SecureYourTomorrow@ncscredit.com or 800-826-5256.
3/31/2009 11:02:00 AM
Changes to Georgia Lien Waiver Requirements
Be aware! Even though the waiver you sign for Georgia projects may appear to be conditional, your rights to proceed with a lien or bond claim will be jeopardized if payment is not received and an affidavit of nonpayment is not recorded timely.
Effective March 31, 2009, when a claimant is requested to execute a waiver and release in exchange for or in order to induce payment, the waiver must follow the new, statutory form. Download the new forms here: FORM ONE and FORM TWO
Although the waiver appears to be conditioned upon the receipt of funds, when the waiver so specifies an affidavit of nonpayment or a Mechanic's Lien must be recorded within 60 days from the date of the waiver in order to retain your right to file a lien or to make a claim against a payment bond. (A mechanic's lien may be recorded in place of the notice of nonpayment within 90 days from last furnishing, but within 60 days from the date of the waiver.)
The following wording must appear on the waiver:
NOTICE: When you execute and submit this document, you shall be conclusively deemed to have been paid in full the amount stated above, even if you have not actually received such payment, 60 days after the date stated above unless you file either an affidavit of nonpayment or a claim of lien prior to the expiration of such 60-day period. The failure to include this notice language on the face of the form shall render the form unenforceable and invalid as a waiver and release under O.C.G.A. Section 44-14-366.
When NCS is tracking a Georgia project for you, please advise the date a lien waiver was signed so that we can recalculate your deadline to either file the affidavit of nonpayment or the lien.
Note: The prior statute required the lien or affidavit of nonpayment to be filed within 30 days from the waiver; however, the "NOTICE" verbiage was not required to appear within the waiver form.
For more information, please contact NCS at 800-826-5256 or SecureYourTomorrow@ncscredit.com.
Click here to download a PDF of this information. 12/17/2008 1:08:00 PM
Accounts Receivable: The Bank of Last Resort
Credit Today conducted a roundtable discussion where trade credit leaders met to discuss the current credit crisis. The group made some stark predictions about the economy, and the key findings are now available.
Click here to read the full release.
11/12/2008 1:05:00 PM
Surviving the Credit Crisis - Managing Receivables
The latest white paper from The Credit Research Foundation, Managing Receivables in the Midst of Today's Economic Environment, focuses on the potential impact it will have on your business.
After reading this white paper we encourage you to contact NCS to review your current credit procedures to make sure you are in the best position to get paid. For 38 years NCS has been the expert in providing solutions to Secure Your Tomorrow.
Click here to read the white paper.
This article is being reproduced with permission from The Credit Research Foundation.
10/10/2008 12:59:00 PM
Surviving the Credit Crisis
After reading this white paper, Lessons for Businesses to Learn from Today's Credit Crisis, we encourage you to contact NCS to review your current credit procedures to make sure you are in the best position to get paid. For 38 years NCS has been the expert in providing solutions to Secure Your Tomorrow.
Click here to read the white paper.
This article is being reproduced with permission from the Credit Research Foundation.
9/25/2008 12:56:00 PM
Slow Deliveries with DHL in Wyoming
DHL customers are finding a slow deliver time for packages delivered via DHL in Wyoming and Montana. DHL Express closed all seven offices in Montana and two in Wyoming this summer. Please be aware of this if shipping close to a Preliminary Notice or Lien deadline.
7/1/2008 12:32:00 PM
Security for a Softening Economy
It happens everyday. Credit Managers face the difficult decisions of extending credit lines, reviewing financial risk, and protecting their accounts receivable. To make these decisions even more difficult add to the mix the reports of an uncertain economy.
In April 2008 a survey of The Federal Reserve's Senior Loan Officers showed that banks are preparing to weather the storm. The survey showed 55 percent of banks had tightened lending standards on corporate loans in the last three months, up from 30 percent in January. At best, our economy is softening. Like it or not, this means your customers will be looking to you for discounts or extended terms. What do you do? The answer is to do the same things the banks do. Secure collateral against the credit lines that you extend. Banks have always taken advantage of this principle. Why shouldn't you do the same?
Trade creditors have different options for securing collateral against credit lines. If the goods are being permanently affixed to a building, take advantage of the mechanic's lien laws. If not, record a UCC Filing to secure your inventory, equipment or accounts receivable.
When selling materials, providing labor or services that permanently improve real estate, the mechanic's lien filing process is the best method to get the needed leverage to ensure payment. The theory is very simple. You have improved the property; therefore the owner should not retain the improved benefit until it is paid. Legally, you can secure yourself against the piece of property to the extent you have improved that property. One issue that frequently arises is that you are asked to extend credit lines to customers that do not have the financial strength to merit that credit. The lien process gives you an option to sell on open terms.
Not everyone is eligible to file mechani's liens. It is a very defined right. Your materials must be permanently affixed to a piece of property, or your service, or labor must contribute to the improvement of that property. If your business falls within the realm of having lien rights, you must be sure to follow the required lien laws in the state where the property is being improved. In many states this means you must react early in the process. The lien laws in many states involve steps that must be taken shortly after first furnishing materials, service, or labor to the jobsite. If you do not fulfill these requirements in the times frames outlined, you may be jeopardizing your ability to take collateral against the piece of property you have improved.
UCC filings bring another opportunity for trade creditors to take security against the credit lines they extend. The good news is that UCC filings are not a defined right; businesses can take obtain security by filing a UCC Financing Statement. Taking a security interest is consensual. Your customer must grant you the right to take security in their collateral by signing a security agreement. Unlike attaching to real property under the Mechanic Lien Laws, Article 9 of the Uniform Commercial Code allows taking security in your customer's assets, which can be inventory, equipment, proceeds, accounts receivable, general intangibles, or other collateral classifications. Properly filing the UCC document makes you a secured creditor and can place you at the top of the claims pyramid.
Unfortunately there is not a crystal ball to guide you through the maze of credit decisions. However, using the tools that are available can be a great start. Do not leave yourself unprotected by not taking the proper steps. The effect of leav
3/24/2008 11:00:00 AM
Georgia Lien Law Update
GEORGIA TO CHANGE LIEN LAW EFFECTIVE 3/31/09
On February 20, 2008, the Georgia Senate passed Senate Bill 374, which will become effective March 31, 2009. Highlights of the changes to the statute include :
* A change to the time frame in which to file a lien
* A change to the time frame in which to file suit to enforce a lien
* A change to the verbiage of the lien
* Changes in the wording of lien waivers
Please refer to The National Lien Digest in your web portal for details on the upcoming changes.
3/2/2008 10:04:00 AM
Obtaining Payment Bonds
NCS strongly recommends obtaining a copy of a payment bond at the beginning of a project. At the beginning of the project asking for this document is just a general request or requirement to complete your paperwork for the project. If it is not requested until after there is a payment issue, general contractors are hesitant to provide this information. The attorney will try to obtain this information from the public entity as it is considered public record but this can take time and does not always guaranty we receive a copy.
This is even more important for private projects that are bonded. For a private project, bonding information is not considered public record and general contractors are not required to provide the information.
2/1/2008 10:02:00 AM
North Carolina Retainage Reform Act
North Carolina Session Law 2007-365, Senate Bill 1245
Retainage.... the percentage of a contract price retained from a contractor as assurance that subcontractors will be paid and that the job will be completed. Often held on public construction contracts, retainage can be detrimental to smaller businesses as it ties up their cash flow. North Carolina has passed an act amending the laws relating to retainage payments on public construction projects.
The act applies to any contracts entered into on or after January 1, 2008. The act provides that no retainage be allowed on public construction contracts in which the total project costs are less than $100,000. On projects with costs of $100,000 or more, retainage is limited to 5 percent of any periodic payment due a prime contractor, and once the project is 50 percent complete, no further retainage should be withheld.
Click here to view the entire act. 1/16/2008 9:52:00 AM
Protecting Your Receivables on Construction Projects
Construction credit carries an inordinate amount of risk. Fortunately, creditors can protect their exposure through the filing of preliminary notices, liens and bond claims. Obtaining answers to these six fundamental questions will ease the process.
Who are the parties involved on the construction
project?
As part of your sales procedure, require that your salesperson obtain complete project information. A standard job information sheet should include the project address, the names, and addresses of all parties within the contractual chain, including the owner of the project, and surety and
lender information where applicable.
What remedy is available to you?
Know whether the project is privately, publicly, or federally owned, so that you know whether your action, if you remain unpaid, would take the form of a mechanic's lien, a bond claim, or a Miller Act bond claim.
When is your deadline for protecting your lien or bond claim rights?
The requirements vary greatly from state to state, and some states even require that preliminary notices be served before materials or services are provided. Know these deadlines before you have a problem so that you can avoid missing any statutorily required actions.
How do you protect your rights?
Know the states where preliminary notices must be served. Know whether the statute requires specific language or specific information within the notice. Know whether the lien will offer more protection if filed earlier rather than later (unpaid balance lien states).
Where must the notice be served?
Some states require that notices be served upon the owner of the project, some must be served upon the prime contractor. Liens must sometimes be served upon the owner; Bond Claims on the owner, or the prime contractor, or the surety; sometimes on all three. Know the requirements of each state.
These tools have been put in place to protect the owners of construction projects and to ensure that all contractors, subcontractors and material providers receive payment for the services and materials provided. Use these tools to your advantage.
1/16/2008 9:40:00 AM
Happy New Year!
NCS wishes you and your company a Happy and Profitable New Year!
Shorten your DSO and make 2008 your best year yet. NCS publishes The National Lien Digest, a handy reference guide to current information on statutory deadlines for notices, liens, bond claims and suits. The Digest simplifies the confusing world of filing notices, mechanic's liens and bond claims by providing time and information requirements, job information sheets, threshold requirements for Payment Bonds and an 800 Hotline for any questions. Call 1-800-826-5256 for more information.
12/6/2007 9:39:00 AM
LienTracker™ Update
As a subscriber, look for your new CD coming in the mail. Kentucky, Missouri, Tennessee, Utah and Washington have all been updated. Plus a new fresh look! Contact us if you have not received your new CD.
1/12/2007 9:30:00 AM
Court Opinion on Mechanic's Liens for Public "Purposed" Property
While the court addressed the exemption from the mechanic's lien statute, it did not provide for any other remedy, such as a requirement that the prime contractor obtain a payment bond, as they would be required to do on a publicly owned project.
As always, we stand ready to assist you. For any questions about this service or the information in this notification, please call us at (800) 770-8221 or e-mail us at liens@ncscredit.com.
