The choices you make to protect your open construction job-related accounts receivable are yours and yours alone.
Naturally, you could choose to rely on standard “Risk” policies. ie: (to extend or not extend credit). This usually ends in one of two ways:
- Your client is “ROCK SOLID” and pays like clockwork, each and every time. If this is your experience and you sell to the same client day in and day out. Why add another layer of security?
- You are growing your business and constantly bringing on new clients. The laws of averages dictate that sooner or later you will get burned. Not deliberately, but simply as a result of Murphy’s Law. So adding a layer of accounts receivable protection with the level of security anchored by a series of legal documents which will allow you to actually collect your open balances, makes for some solid business sense.
Now to the subject at hand: “Is using a construction lien service worth it?”
Naturally, we would like you to conclude that this is a no brainer: Of course, it is! However, it does take some serious consideration. Concerns like:
- Would it be less expensive to do it myself?
- Do I want to trust someone I don’t know with access to my client’s information?
- Is this service just slapping some basic information on a form and mailing it?
- What qualities and characteristics do I look for when choosing a service?
These are only the tip of the decision-making process. However, this is a reasonable starting point and should help you to reach a final decision or at least narrow it down. Here are some answers to this due diligence:
#1 Would it be less expensive to do it myself?
Unless you are serious about serving notices for all your projects and are willing to commit the time needed to do it right – don’t attempt this in-house. Researching and preparing these documents takes knowledge and dedication to complete the research that results in a “Bullet Proof” notice. Too many try to do this on a whim and end up with all types of errors. From listing the wrong owner to using outdated forms. Trust me, we’ve seen it all. Once again, they never intended for it to be wrong or invalid. And in most cases, those who did the preparation believed it was solid and ready to stand firm against any Court or Lawyer’s Review. Sad thing is that many who are served an invalid notice don’t recognize the errors and just treat it as just another client who will now be required to issue releases for a right to lien which they may have never actually secured. So if you do consider an in-house process, you would be well served to make it someone’s primary responsibility and not just an add-on to a clerical function.
#2 Do I want to trust someone I don’t know with access to my client’s information?
Only if they
- have published “Privacy Policies”.
- Present no conflict of interest with other services they may provide.
- Have been in Notice Preparation and Service business long enough where other clients can testify as to their integrity.
- And they are not hiding behind a website which is elusive and makes it very difficult to physically find the service. Be careful about PO Boxes, generic non-descriptive email addresses, or those who may be peddling marketing list loaded with all of your customer’s information. Choose someone who will never be in a position of compromise.
#3 Is this service just slapping some basic information on a form and mailing it?
A sure way to investigate this behavior is “Advertised Pricing”. If it looks like a duck, sounds like a duck, you know the rest… It’s a Duck and that is exactly what you should do. As a matter of fact, don’t just duck – run in the other direction. These “Low Ballers” could care less about the quality or integrity of your notice. They are all about the fast buck and the next trick. Watch out for the “One large fee for a volume of notices” – paid upfront. Ask yourself- do they want my business? or my money? Anyone offering to properly prepare and serve a notice must have qualified processors, who are willing to stay with the research until all critical information has been verified and the notice is properly served. You should be able to call, email, and visit, the service you are trusting with your proprietary business information.
#4 What qualities and characteristics do I look for when choosing a Construction Lien Service?
How long have they been in the business? How long have they been servicing the same clients? Are they Insured? Licensed? What do their clients say about their service? Are they comparable with your business structure? IE: Do you need a service that can handle all of the states where you conduct business? How do they accommodate your accounts payable processes? What hoops must you jump through to submit your request? Are they available when you need them? Do they know and understand the laws which govern the notice process? This list can go on and on. The key is that you are choosing a service that is not a “Fly by Night”. A service that takes this business seriously, and people who you can respect.
Want to learn more about how CRM Lien Services is a worthy investment? Feel free to reach out to us or review our services to learn more.
