Page 330 - TCDB combined Book

Chapter 6 MANAGEMENT 309

Terms of Payment:

In many jurisdictions and on most non-government projects the provision for registering a
Lien to protect your rights for payment should be part of your basic Prime Contract terms. The
correct legal description for the property involved along with the owner's proper name and
correct address should be readily available for any Lien action contemplated. The rules and laws
regulating this legal process are subject to the jurisdiction of the project location. The critical
factor requires that action be taken before a given number of days have elapsed since you’re last
day worked on the project site. Statutory Holdbacks are retained from your payments to protect
the owner from the Lien actions that can result from non-payment of your subcontractor or their
suppliers. When non-payment by the client on the Prime Contract becomes a serious problem,
placement of a Lien will interrupt the flow of any arranged mortgage funds. Until this Lien is
settled and discharged be prepared for a delay in completion of the project. Before taking any
Lien action obtain legal advice. Your rights and remedies should be reviewed and a Lien action
pursued as a last resort. Early action and informed decisions are the key points for any Lien
registration.

On Projects with no mortgage lender or a separate financial interest the Lien amount can
be paid into Court until settled or discharged, avoiding project delays.

The Lien information provided herein is included as general information and does not
intend to cover specific Lien Legislation for any given project location. The importance of
understanding your particular Lien rights and the proper process to follow should be handled by
knowledgeable individuals and with the assistance of a lawyer. The potential problems and
financial liability that can be incurred by not understanding your Lien rights could produce some
devastating results for your company.

Your second and subsequent progress billings will require a "Statutory Declaration"
stating that all Subcontractors have been paid from the first progress payment. It is important that
any unpaid or disputed subcontract amount from this first billing be clearly stated on this
declaration. On major Subcontracts you should be requesting a "Statutory Declaration" to
support your prime claim that there are no unpaid amounts for the specified period, other than any
amounts under dispute. In some jurisdictions a Clearance Certificate from the Worker's
Compensation Board will be required at the beginning of a project and when requesting your
Holdback release. It is important to obtain Subcontractors Clearance Certificates to ensure
protection for the client and your company against future claims from injured Workers.