According to most news reports, the Construction Industry may not see any real growth for the next 10 years. (Bummer.) Looks like the shift will be away from single family homes towards more apartments and condos. This also means that the overall Real Estate Market should remain very soft.

So what is someone who relies on this industry for their livelihood going to do?

Well, one thing is certain. Taking chances with your job site accounts receivables will be more risky during this slow growth decade then it has been in years past. Those with a customer base may be awarded projects for repairs and upgrades, and perhaps some expansion opportunities. They will still get some work, however, one little hiccup in getting paid may be the demise of your established business.

This is not the time to gamble with your receivables. Anything you can do to tighten up the process should result in your staying power during these extended lean times.

So many small to medium size companies have followed the trend of the larger corporations. They now serve a Preliminary Notice (Prelim) on most jobs they get. It is no longer OK to just shake on the deal. Sure, you have worked for your clients for years and never had to worry. What you don’t know is will they have to worry about being paid for their new projects during these shaky times.

Want to do your customer a favor and help your own company at the same time?

Don’t buy them a drink. Don’t bring donuts. Forget the tickets to the ballgame. Instead, offer to pay for their prelim at the same time you order yours. Your customer will thank you and you will get the protection you need.

Think this sounds silly? Think this is over reaction?

Then ask yourself: How many RELEASES have you been asked to sign off during the past 2 years? Have you noticed that almost every project is requesting you to sign some type of mechanics lien release / construction lien release or waiver?

Why? Why did you have to sign those releases? Did you have a Preliminary Notice in place protecting your lien rights? Many who sign these releases never even considered serving a Preliminary Notice as a protection tool. They sign the release because their customer told them that if they did not, they would not get paid.

Sounds like a pretty strong tool to me. No Release – No Pay.

But I thought the handshake was all that I needed. Why do they make me sign a release?

Because the Owner of the project (the person controlling the flow of all the payments) just so happens to understand the Prelim, lien, release, the whole enchilada. And they will continue to insist on releases even if you never had the right to lien their property.

This market is a very strong warning to those who work in and around the construction industry. Do not be fooled by risking your lien rights to a faulty Preliminary Notice or no Preliminary Notice at all.

Give us a call or shout on this blog – we really can help.