Having a solid understanding of mechanics liens is crucial for contractors in the construction industry.

In this episode, Karalynn explains that mechanics liens provide a powerful security interest in property, ensuring contractors have leverage to get paid for their work. Filing a lien can prevent an owner from selling or refinancing until payment is made. But it's essential to follow the proper steps, or you could face costly consequences.

Key Takeaways

1. Karalynn explains that mechanics liens (also called contractors' or materialmen's liens) serve as a way for construction professionals to secure payment for their labor and materials by creating a security interest in property. This is a crucial legal tool in construction law to help contractors and suppliers ensure they get paid for their work.

2. A central concept highlighted is the distinction between unsecured debt (like a credit card balance, where the creditor can only pursue general assets) and secured debt (such as mechanics liens or mortgages, where specific property can be claimed if payment isn't made). Filing a proper mechanics lien turns what would otherwise be an unsecured debt into a secured one.

3. Karalynn emphasizes that the process for filing a lien is highly state-specific and requires strict adherence to legal requirements, such as timely notices and proper documentation. Failing to meet these requirements can invalidate a lien and even result in costly legal consequences.

4. Send notices as soon as a payment issue is suspected, as there is no penalty for being early, but missing deadlines can forfeit lien rights. Proactive communication and timely action increase the chances of getting paid without protracted disputes.

5. While liens provide powerful leverage—preventing owners from selling, refinancing, or completing permanent financing until the lien is resolved—they come with serious risks if improperly filed. The process offers strong protection for payment, but errors or dishonest practices can lead to lawsuits, attorney's fees, or additional liabilities.

Grab Karalynn's new book Trust Your Gut here.

Follow Karalynn Cromeens on Facebook here.

Follow Karalynn Cromeens on Instagram here.

Follow Karalynn Cromeens on LinkedIn here.

Watch the show on YouTube here.

Learn more about The Cromeens Law Firm here.

In this reading of chapter five of Karalynn's book Trust Your Gut, she lays out the importance of change orders in residential construction contracts, revealing how they protect both the project's progress and your financial interests. Without clear documentation and upfront payment, contractors risk financial loss and disputes. Ted's cautionary tale shows that failing to use proper change orders can jeopardize everything.

Key Takeaways

1. Change orders are essential for any residential construction project. They formalize any modifications to the original contract and protect both parties from misunderstandings or disagreements about scope, cost, and timelines.

2. Proactively explaining the change order process to homeowners builds trust, sets clear expectations, and ensures smoother project management. This conversation should happen before work begins to prevent confusion or surprises later.

3. Every change—big or small—should be documented in writing and signed by both contractor and homeowner. Verbal agreements aren't enough. Proper paperwork is crucial for getting paid and for resolving disputes if they arise.

4. Contracts should clearly state who is authorized to approve changes and extra work. Homeowners must direct requests to the project manager, not subcontractors, and subs should never act on homeowner requests without approval. This keeps the contractor in control and prevents unexpected costs or conflict.

5. The story of Ted highlights the risks of neglecting change order documentation. Not having signed change orders nearly cost him his assets and led to a legal nightmare. Contractors protect themselves, their finances, and their reputation by thoroughly documenting all changes.

Grab Karalynn's new book Trust Your Gut here.

Follow Karalynn Cromeens on Facebook here.

Follow Karalynn Cromeens on Instagram here.

Follow Karalynn Cromeens on LinkedIn here.

Watch the show on YouTube here.

Learn more about The Cromeens Law Firm here.

Many contractors mistakenly believe a scope of work alone is enough to protect their interests. In this episode, Karalynn reads from chapter four of her latest book Trust Your Gut, and explains that unclear or incomplete scopes lead to costly disputes and unpaid work. Clarity and detail are the keys to setting the right expectations. A comprehensive contract is your real safeguard in the construction business.

Key Takeaways

1. A scope of work is not the same as a contract. While the scope sets out what will be done, a full contract should include additional provisions that protect all parties. Relying solely on a scope of work can lead to misunderstandings and disputes.

2. The more detailed and explicit the scope of work, the less room there is for confusion. Clearly itemizing each component helps ensure both contractor and client share an understanding, fostering trust and reducing the likelihood of conflict.

3. Without a well-documented scope of work, disputes often hinge on credibility rather than facts, and contractors are at a disadvantage in court. A clear scope acts as protection by eliminating ambiguity about what was agreed upon.

4. Contractors are not entitled to payment for work performed outside the agreed scope unless it's formally documented through a change order. Doing extra work without it means you may not get paid.

5. For projects requiring permits, having a separate design contract helps clarify the real scope (after permits are approved) and ensures compensation for preliminary work. This two-step process protects contractors from surprises and unreimbursed effort.

Grab Karalynn's new book Trust Your Gut here.

Follow Karalynn Cromeens on Facebook here.

Follow Karalynn Cromeens on Instagram here.

Follow Karalynn Cromeens on LinkedIn here.

Watch the show on YouTube here.

Learn more about The Cromeens Law Firm here.