Legally Speaking - Debunking the Top 10 Payment Myths
by Donald Gregory, Esq.
Payment is the lifeblood of any subcontractor or supplier. Yet many myths adversely affect the ability to timely secure payment. Here is my personal top 10.
“Don’t worry about it, we can always lien.” ~ While lien rights are important, they are not a substitute for good credit practices. Lien rights attach only to the equity in the property, which can often be a problem on a troubled project. In addition, legal fees must be paid to foreclose or otherwise turn the lien into cash, and frequently are not recoverable. Read more>
American Subcontractors Association, Inc.
Frequently Asked Questions - Project Financing
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What is pay-if-paid?
Contingent payment or a “pay-if-paid” clause is a contractual term that shifts the burden of financial risk for a payment delay or payment default from one party to another. For example, where legal, a pay-if-paid clause could prevent a subcontractor from collecting payment if the owner fails to pay the general contractor for the subcontractor’s work. A typical pay-if-paid clause between a general contractor and a subcontractor clause might read: Read more>
What is the ability to stop work?
The ability to stop work is about gaining control in a situation where owners, general contractors, construction managers or other customers fail to pay on time. Your customers control the flow of payments. A subcontractor with the ability to stop work for unjustified failure to pay has leverage to get the money it is owed. Read more> |
