THE LAWS OF CREDIT AND COLLECTIONS

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                               MECHANICS LIENS

If you drop-ship goods to a site or provide engineering services or other labor at the site, you are entitled to file a Mechanics Lien against the real estate (the land and the buildings) if you are not paid by your customer.

The lien can be filed whether the customer owns the real estate or if it is the contractor or if it is a supplier/distributor.

If the owner of the real estate is a city, state, or the federal government, you can file a claim against a payment bond (if one was obtained by the contractor), but you cannot file a lien against the real estate.

TIMING is crucial.  Each state has different rules governing the time limits for filing a lien.

For example:  New Jersey requires that the lien be filed before you provide any goods or services.  New York gives you 8 months to file the lien after the goods and/or services are provided by you to the site.  The other states are between these two extremes.

In some states, you can get paid even if the contractor was paid.  In other states, the amount that you can collect is limited by what remains owing to the contractor and to your customer.

Mechanics' Liens (against real estate) are different than Repairmens' Liens (against equipment).