Contractors and suppliers on construction projects not paid on time may not be able to keep current or meet their financial obligations. Lack of payment and late payments also leads to wasted resources and reduced profits. Industry surveys indicate that contractors and suppliers on construction projects are often paid late and many of them don’t consider filing a construction lien when payment is not made on time.
With current interest rates relatively high, banks are tightening up and construction financing may be difficult to obtain. In addition, there are concerns about a recession. These factors could very well cause contractors and suppliers on construction projects to encounter payment issues. Thus, it is important that contractors and suppliers take advantage of their construction lien rights to avoid late payments and help ensure they are paid. Just the simple step of providing notice of lien rights to the property owner at the beginning of a project can cause payment to be made in a timely manner. If a general contractor or owner is having cash flow issues, they are more likely to pay the contractors and suppliers who secured their lien rights by providing notice to the owner.
Construction liens are a very effective collection device for construction contractors and suppliers. To read more about what construction liens are and how they work in Oregon, click here.