Making Sense of Lien Law
The economy is changing, and with it, the construction industry. Belts are being drawn tighter as profit margins slip, meaning historical paths to payment are no longer so tried-and-true. Mechanic's liens are posed to become an even more valuable tool at the credit manager's disposal as the construction sector stumbles. But the laws governing these rights are far from being easily traversed.
"Your industry is struggling and your customers have no assets. So how do we get to 'Yes'?" said Greg Powelson, president, Mechanic's Lien and Bond Services (MLBS) at the annual NACM seminar "Making Sense of Lien Law: A Practical Introduction". "There is no one good guy or bad guy. The problem can occur anywhere on the ladder of supply."
Knowledge about mechanic's liens is proving to be pivotal in today's economic environment and can help credit professionals reel in their DSO. For more than 200 years mechanic's liens have provided one of the most unique areas of the credit industry, which Powelson discusses in his typical engaging and enthusiastic manner that doesn't fail in keeping attendees engaged.
With his presentation built upon nearly two decades of personal experiences in the commercial credit field and in dealing with mechanic's liens, Powelson lays down the groundwork for ensuring that credit managers feel comfortable exploring, and utilizing mechanic's liens from preliminary notices to foreclosure. At the same time he instructs attendees on how liens, and simple notices of intent to lien, can be used by credit professionals to reduce risk and increase profits.
"Credit and specifically collections have changed over the past 20 years," said Powelson. "It's no longer about who makes the toughest collection call; it's about creating a reason on why you should get paid over another credit professional".
Even though the concept of a mechanic's lien is universal, there are a variety of statutory schemes that differ from state-to-state. Powelson approaches liens from a macroscopic level, as well as covering the varied regulatory practices that are unique to each state, giving attendees a well-rounded view.
"The recognition that you're competing with the debtor's other creditors, not the debtor, for payment IS the new reality," explained Powelson. "In my experience the smarter credit manager always takes the money from the less smart credit manager, every time. Credit education is no longer a luxury. To be successful you must keep learning; you must keep up. That's what we're going to do today."
MLBS offers the Lien Navigator and prepares, serves and files notices, liens and bond claims for all 50 states. For information on discussing a workshop for your company, contact MLBS at 216-212-6020. Information on MLBS, as well as other resources for construction credit professionals, click on the MLBS tab at www.nacm.org.