Hurricane Matthew is bearing down on Florida, and residents are either evacuating or bracing for impact. Considering how often Louisiana finds itself in the crosshairs of natural disasters, we’re hoping for the best for our eastern neighbors. However, it is best to be prepared in the situations, so here are some issues that may arise while recovering from Hurricane Matthew
Contractors, Subs, and Suppliers
For those that are performing the much needed recovery work, protection is needed too. In order to secure payment, contractors, subs, and suppliers should be aware of the lien rights for their state. Some of the trickiest subjects when crossing state lines include licensing requirements, contract requirements, and what constitutes lienable work. To that end, here are some of the considerations in Florida, North Carolina, and South Carolina. For more information on the lien law of those states, or any other state, head over to our Mechanics Lien FAQs and select your state.
When dealing with recovery work, contractors, subs, and suppliers will likely be receiving some, if not all, of their payment from insurance companies. Insurance check delays have caused problems in the past, so these parties should understand that it may still be necessary to preserve their rights to payment. We discussed this at length following Hurricane Sandy, so follow this link for more on the subject. For contractors who wish to avoid attaching a lien at all costs, here are some other creative options that may help secure payment.
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Property Owners
In the wake of massive storms and natural disasters, contractors, subs, and suppliers flock to affected areas in search of work. Normally, this is a mutually beneficial relationship: contractors find work and help those people who need it the most, while property owners quickly repair the damage on their homes and businesses. However, the construction industry, like all other industries, does have some bad actors. Just recently, contractors have abused homeowners in Florida and New Jersey. Because of this alarming trend, we discussed how to avoid these situations in recovering from the recent Louisiana flood.
When recovering from Hurricane Matthew, the best way to avoid being burned by a contractor will be to prioritize communication on your project. By requiring that contractors list each party working on a project, coupled with a description of each party’s role, a property owner can better understand the payment chain for their project. Knowing what subcontractors and suppliers have been contracted by the prime contractor helps avoid surprises, including the all too common situation of a lien coming “out of nowhere.”
Perhaps more importantly, homeowners should couple payments with conditional lien waivers. By doing so, a property owner asks their prime contractor, subs, and suppliers to waive their right to file a mechanics lien. This may seem like a lot to give up, but the magic of using a conditional lien waiver is that the condition is typically that a party has received payment. So for parties worried about giving up their legal rights, these rights are only waived once they have been paid. Here’s what to keep in mind when requesting a lien waiver.
Conclusion
At Levelset, we have plenty of personal experience in dealing with hurricanes, so our hearts go out to those that will soon be recovering from Hurricane Matthew. While the rebuilding process can be an emotional, uphill battle, it is important to protect yourself during the return to normalcy. It is equally important that the interests of contractors, subs, and suppliers are protected during this time. Good work is imperative during a time of recovery, and contractors can only continue to provide their services when they are compensated for their work.
Here are more considerations with Florida, North Carolina, and South Carolina lien law. For more on construction issues during storm anticipation and recovery, check out the Storms cheat sheet.
