Guess what? There is a beautiful new ice arena at a major university in Ohio. We know because we supplied the materials, labor and installation services of the entire ice rink including the sub floor heave protection, the piping systems, the boards and the glass. Guess what else? They refuse to pay us citing everything from “the ice melts too fast” to the “funds aren’t yet available.” Tired of excuses, we want to be paid. What should we do?
Of course, Skates, it’s a public job, and there is nothing obvious to make you believe they won’t pay. We hope you use solid credit practices that start with assuming you won’t be paid ON ALL JOBS!
Then utilize Ohio Revised Code Section 1311, which provides you the right to perfect a lien on the public authority’s funds designated to pay for this public improvement. Make lien perfection the foundation of your credit practice philosophy on public or private jobs. If you do it right, the public authority will place the disputed sums in escrow and away from the principal contractor (this differs from private jobs that places the lien on the improved real estate).
Now pay close attention … YOU HAVE TO STRICTLY FOLLOW ORC 1311 TO PERFECT THE LIEN. There are many loopholes and exceptions, but your lien protection philosophy must start with a requirement of always serving a Notice of Furnishing on the principal contractor as soon as possible after you begin your work. If you fail to do so within 21 days, you will not be able to protect all of your work with a lien. If you do it right and they don’t pay you, you serve a lien affidavit on the public authority within 120 days from your last work and the escrow will be set. Otherwise, Skates, you will slip right into litigation.
Do you dig lawsuits? Be smart, lien up.