Shook Partner Rick Shearer and Associate Poston Pritchett have authored an article for Law360 explaining how construction contractors can preserve and assert lien rights, which could be particularly useful as contracts go unperformed during the COVID-19 crisis. “What may seem like a mere technicality can be fatal to a subcontractor’s lien and perhaps doom its only opportunity to receive payment from an owner for materials supplied or underlying work performed,” they note. “Failing to secure these rights could waive any right to additional time or costs.”
Pritchett and Shearer explain that the actions taken during a disruption such as a shelter-in-place order can have ramifications years later during an ensuing legal battle. “It is paramount that contractors posture now to protect and secure their respective interests by issuing notices as quickly as possible even though the full impact of a disruption may be unknown,” they advise, and they offer several suggestions for actions that can be required to secure a contractor’s rights to payment, including applicable notice requirements and payment bonds.