People will only work if they are paid. That is the basis of the economy because earning is the right of every person and this provides him or her with a livelihood. However, unwanted situations can happen when you are not paid for the work you have done.
Such situations are possible in all types of business. The law has worked to ensure that contractors are both technically and legally protected from frauds. Suppose you are a builder or contractor in Wisconsin, and you have just completed a project for which you haven’t been paid. If that happened, you have the right to fill out a Wisconsin mechanic’s lien and claim your money legally.
This legal tool is a very effective way to get what you deserve with your work. Legal experts suggest thinking of the mechanic’s lien at the beginning of the project to ensure non-payment by the client. In order to acquire this power at all, you, as a contractor of any kind, need to follow specific rules. Even the slightest mistake or delay in submitting the required documents can cancel your right to a mechanic’s lien.
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Ensure the Right to Lien
The state of Wisconsin has rules when it comes to filing a mechanic’s lien. This legal tool gives you significant rights, and in most cases, your earnings will be reimbursed. But precisely because it is a powerful tool, the rules to use it are quite strict.
The first requirement that you must fulfill to secure your payment through lien is to make project official. Wisconsin law requires you to send a Preliminary Notice to a client. The deadline for this procedure is two months from the start of the project. If the payment schedule takes place regularly during the works (and if you have agreed with the client), there will be no need for a mechanic’s lien, but better safe than sorry.
Upon completion of the project, your client probably has a certain deadline to settle all their debts (if any). Ensure that this period is not longer than three months so that you have time to prepare for filing a lien. To ensure payment on time, you can send the client a friendly reminder just before the deadline. If this date passed, and you didn’t get paid, the next step is to send a ‘past due’ reminder.
Deadlines for Filing a Lien
Make sure that you send all reminders within five months after the completion of the works. No later than a month before the expiration of 6 months (this is for how long your right to filing a lien is valid), you should send a Notice of Intent to Lien to the non-payer. That should do in most cases because lien can be a significant burden for property owners. Find out more at this link.
Yet, if all warnings are in vain, it is necessary to initiate proceedings. You don’t need a legal representative for this action, since you can find necessary forms on the Internet and fill them in yourself.
After completing a mechanic’s lien, you have a legal period of one month to notify the property owner (a client who didn’t pay you). It is necessary to send them a copy of this document, with all the necessary information about the amount, deadline, and payment method.
How It’s Enforced
Mechanic’s lien gives big headaches to those who haven’t paid for the services of builders or any other contractors. Although the billing process can take time, it is generally resolved in favor of the person who filled in the lien, and non-payers pose additional problems. Their biggest problem for them will be the inability to sell or take out a mortgage on properties.
The State of Wisconsin has set a deadline of 2 years for a mechanic’s lien to be executed. In the meantime, you can call the property owners and find out about their intentions to pay off the debts. If they can pay you within a reasonable time, which happens in most cases, there will be no need for further action.
Forced Foreclosure
If your former client decides not to pay you despite all other warnings, go for a lawsuit. Before official action, all parties involved must be notified of what you’re up to. That means that you should send them the Notice to Foreclosure. Set a reasonable but not too long deadline for settling all debts to you. That’s a final warning shot.
Deafening to this warning gives you the power to enforce your rights by taking it to court. The filing of a lawsuit must take place within two years of filing a lien. Otherwise, the whole process becomes obsolete, and you lose your money. You probably didn’t want to come to the court either, because the process can take a long time.
From this step, you will need a lawyer. Be sure to discuss their fees. Besides paying debts to you, Wisconsin’s law won’t charge a non-paying client for attorneys’ fees, lost profits, or any other costs you had during this process. Keep this in mind when calculating whether it pays to initiate a lawsuit at all.
Most non-paying clients try to avoid lawsuits after a lien is placed on their property. It’s your right to go as far as you want to get what you earned. However, if you have received the payment at any time before the lawsuit, under Wisconsin law, you must cancel the charge.
