A Contractors, Subcontractor’s & Supplier’s Step-By-Step Guide to Getting Paid - Nebraska - Webinar

In this webinar, you will learn what are the steps that contractors, subcontractors, and suppliers in Nebraska should follow to ensure that they get paid correctly and on time.

ARIELA WAGNER

by

Ariela Wagner

Last updated:

Apr 6, 2023

Published:

April 06, 2023

WORKER SMILING

Attorney Reviewed

6 Mins

read

Every business involves some form of payment disputes and risks, and the construction business is no different. Many contractors, subcontractors, and suppliers often find themselves involved in payment disputes where the money owed to them is not paid due to various reasons. The construction laws of each state provide various laws that enable these construction professionals to secure their payment rights; however, this is possible only if they have followed all the rules and regulations that are in place with regards to ensuring that they get paid without having to take the ultimate step of filing a lawsuit.

In this blog, presented by SunRay Construction Solutions and construction lien law experts J. Daniel Weidner, Shareholder, Casandra M. Langstaff, Senior Associate, and Taylor M. Hayes, Associate, Koley Jessen, we will provide you a step-by-step guide that contractors, subcontractors, and suppliers in Nebraska can follow to secure their payment rights and ultimately get paid as soon as possible.  

Read on as we explain about the various steps in detail.

Step 1: Have Clearly Defined Payment Terms in the Contract

So, our step number one is to have a clear written agreement. Although construction agreements can be verbal, the best practice is to have a written contract with the contracting party to avoid any ambiguity later. Having a written agreement makes it easier to enforce payment if you do find yourself in a payment dispute. Some key pointers to follow include:

a. Your written agreement should include specific payment terms.

b. These payment terms should be directly tied to your invoicing processes.

c. Other to include in the agreement:

i. Include payment timing requirements. Typically, payment periods are mentioned as within 30 days of invoicing.

ii. Mention your right to recover interest if there is late payment. Sometime this can also be used as a leverage to get paid faster where in you can negotiate and say that you will waive off the interest if the amount due is paid within a week’s time.

iii. Specify your preferred mode of payment.

iv. Do not forget to mention your right to suspend work in the event of nonpayment or delays.

Having these items clearly listed in your written agreement is a great way of setting yourself up for success if you are involved in a payment dispute.

Step 2: Timely and Consistent Invoicing Practices

So, once the project progresses or you complete the work, the next step to follow is to create a system which will ensure timely and consistent invoicing. Here are some key pointers to remember:

a. Make sure that your invoice is as detailed as possible. From including what work was performed to what is the amount due to what is the interest amount (if any), you need to include everything in it. Your invoices should also be consistent with what was agreed in your written agreement.

b. Your invoices should be sent out routinely and in a timely manner. The best practice is to get your accounts receivable team involved and with their help, set up a system that will ensure that the invoices are out on time.  

c. Apart from sending out the invoices in a timely manner, you also need to keep track of your collection efforts. Your tracking information should contain details about when the invoices were sent, whom they were sent to, how the invoices were sent, relevant proof, etc.

d. All the details related to your invoices should be documented internally so that you can refer to them and use the information for collection in the future.

construction lien

Step 3: Timely Follow Up on Delinquent Payments

As mentioned in the previous step, it is important that you document your collection efforts so that you are aware of when it is appropriate to follow up with the other party. So, it is important for you to be aware of when the invoice was issued, when was it received, and then define a protocol for following up on delinquent payments. Key pointers to remember including:

a. Track your invoice payment period so that you are following up appropriately and in a timely manner.

b. There are different ways to follow-up, such as email, a standard written letter, telephone call, etc. It is recommended that if you are dealing with your regular clients, then a phone call or a text message would suffice. But, if you are dealing with someone new, then the best option is to follow-up via email or send out a standard letter which will help in establishing the severity of the situation.

c. Another way to elevate the level of seriousness is to the extent appropriate, you can mention that your legal team will be involved if the payment dispute is not resolved as quickly as possible. But ensure that you do not use this as a threat every time because if you do so, then they may not take the threat seriously.

Step 4: Monitor the Deadline to File a Construction Lien and File Lien as Needed

As you move ahead in your process of determining how to get paid, and when you are entitled for the payment, the next step that you need to take is to monitor the deadline to file a construction lien and find out how to file the lien. This is crucial because a lien acts as an insurance policy which gives you the best chance to get paid. Here are the key pointers related to this step.

a. First step is to make yourself familiar with your state’s lien laws and timelines. In the state of Nebraska, you have 120 days from the date you last provided materials or services to the project to record your lien with the Register of Deeds in the county where the project is located. Remember that this 120-day deadline is a hard and fast rule. If you miss out the last day of the deadline, then you cannot record your lien.

b. One way to improve your ability to get paid as you move towards this deadline is having the permissive ability to issue a Notice of Intent to Lien. Although most of the projects in Nebraska do not require you to issue a Notice of Intent to Lien, it is a recommended step which will increase the seriousness of your payment dispute.

c. It is important that you file your lien but ensure that all the facts are correct so that you have a strong lien in your favor.

d. When dealing with liens, you must be aware of what type of project you are working on. This will determine whether it is beneficial to file the line well in advance of the deadline or not. Filing a lien has a huge impact on the project. For example, commercial projects often have a construction loan in place. When you file a lien, it puts a stoppage on issuance of further loan payments. This means that unless the owner or the general contractor clears your lien, they may not get additional funds.  

Similarly, when these projects are nearing completion, the owner may change the construction loan to a permanent financing. If you file your lien between this switch, then there is a higher chance of you getting paid promptly. This is because they will be stuck on their construction loan until your lien is resolved.  

e. Finally, you also need to be aware what are the other legal options that you can exercise to resolve your payment issues. For example, in public projects, you can make a payment bond claim which involves a surety who could help you in getting paid.

SunRays deadline calculator

Step 5: Commence Formal Collection Process

The last step is commencing the formal collection process which means turning over your case to a legal counsel because you have not received any response from the party who owes money to you. Now, you are at a stage where there is no option other than involving legal counsel to ensure that you receive your payment. Key pointers to remember when you are at this step.

a. There are various steps that your legal counsel may take, one of which is sending a demand letter. The details for this demand letter is taken from your written agreement, and may include information about the work performed, invoices issued, amounts owed, etc. All of this is put in the demand letter and sent to the party who owes you money. The letter also informs that if they fail to make the payment as per the timelines provided, you will go ahead with filing a lawsuit. A typical timeline would be anywhere between 7-10 days.  

b. Sometimes if there is no response for the demand letter, the legal counsel may follow-up with them via calls, emails, etc. In order to get the party moving, legal counsels often add some kind of incentive in the demand letter. For example, if your contract has a clause for recovering interest on late payment, then the legal counsel may calculate the total amount owed and clearly explain it. They may then also mention that the interest amount will be waived off in full if the original amount due is received within 7-10 days. This often gets the ball rolling as the owner or the general contractor will not want to pay an extra thousand or two thousand dollars, so they will try to pay you off as quickly as possible.

c. Finally, if the demand letter and follow-ups don’t work, then you need to weigh in the cost and benefits of filing a lawsuit. The best option is to have a detailed discussion with your legal counsel to understand what will be the cost of litigation, whether there is any potential to recover attorney fees, etc. In majority of the cases the potential to recover attorney fees is quite low.  

Apart from the cost perspective, you also need to analyze if there are any allegations of defective work or work not performed in the way it should have been. This is because if you do file a lawsuit, and there are allegations, then it is guaranteed that you will receive a counter-claim in your lawsuit. Depending upon the amount of controversy, the counter-claim may cost you more than your attorney fees or the amount that you are trying to collect. So, you must ensure that you first discuss the cost and benefits with the legal counsel and only then decide on whether or not to file a lawsuit.

Of course, everybody wishes to get paid for their work, but in the long run, you also need to analyze if it is worth pursuing the payment dispute and whether or not it will backfire on you. But following these steps is a great way for contractors, subcontractors, and suppliers in Nebraska to increase their chances of successful collection of amounts owed.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

About Author

ARIELA WAGNER

Ariela Wagner

Ariela is the president and founder of SunRay Construction Solutions. She has over 17 years of construction industry experience. Read More>

WORKER SMILING

Stop waiting to Get Paid! Send a Notice to Owner today!

Get Paid

Every business involves some form of payment disputes and risks, and the construction business is no different. Many contractors, subcontractors, and suppliers often find themselves involved in payment disputes where the money owed to them is not paid due to various reasons. The construction laws of each state provide various laws that enable these construction professionals to secure their payment rights; however, this is possible only if they have followed all the rules and regulations that are in place with regards to ensuring that they get paid without having to take the ultimate step of filing a lawsuit.

In this blog, presented by SunRay Construction Solutions and construction lien law experts J. Daniel Weidner, Shareholder, Casandra M. Langstaff, Senior Associate, and Taylor M. Hayes, Associate, Koley Jessen, we will provide you a step-by-step guide that contractors, subcontractors, and suppliers in Nebraska can follow to secure their payment rights and ultimately get paid as soon as possible.  

Read on as we explain about the various steps in detail.

Step 1: Have Clearly Defined Payment Terms in the Contract

So, our step number one is to have a clear written agreement. Although construction agreements can be verbal, the best practice is to have a written contract with the contracting party to avoid any ambiguity later. Having a written agreement makes it easier to enforce payment if you do find yourself in a payment dispute. Some key pointers to follow include:

a. Your written agreement should include specific payment terms.

b. These payment terms should be directly tied to your invoicing processes.

c. Other to include in the agreement:

i. Include payment timing requirements. Typically, payment periods are mentioned as within 30 days of invoicing.

ii. Mention your right to recover interest if there is late payment. Sometime this can also be used as a leverage to get paid faster where in you can negotiate and say that you will waive off the interest if the amount due is paid within a week’s time.

iii. Specify your preferred mode of payment.

iv. Do not forget to mention your right to suspend work in the event of nonpayment or delays.

Having these items clearly listed in your written agreement is a great way of setting yourself up for success if you are involved in a payment dispute.

Step 2: Timely and Consistent Invoicing Practices

So, once the project progresses or you complete the work, the next step to follow is to create a system which will ensure timely and consistent invoicing. Here are some key pointers to remember:

a. Make sure that your invoice is as detailed as possible. From including what work was performed to what is the amount due to what is the interest amount (if any), you need to include everything in it. Your invoices should also be consistent with what was agreed in your written agreement.

b. Your invoices should be sent out routinely and in a timely manner. The best practice is to get your accounts receivable team involved and with their help, set up a system that will ensure that the invoices are out on time.  

c. Apart from sending out the invoices in a timely manner, you also need to keep track of your collection efforts. Your tracking information should contain details about when the invoices were sent, whom they were sent to, how the invoices were sent, relevant proof, etc.

d. All the details related to your invoices should be documented internally so that you can refer to them and use the information for collection in the future.

construction lien

Step 3: Timely Follow Up on Delinquent Payments

As mentioned in the previous step, it is important that you document your collection efforts so that you are aware of when it is appropriate to follow up with the other party. So, it is important for you to be aware of when the invoice was issued, when was it received, and then define a protocol for following up on delinquent payments. Key pointers to remember including:

a. Track your invoice payment period so that you are following up appropriately and in a timely manner.

b. There are different ways to follow-up, such as email, a standard written letter, telephone call, etc. It is recommended that if you are dealing with your regular clients, then a phone call or a text message would suffice. But, if you are dealing with someone new, then the best option is to follow-up via email or send out a standard letter which will help in establishing the severity of the situation.

c. Another way to elevate the level of seriousness is to the extent appropriate, you can mention that your legal team will be involved if the payment dispute is not resolved as quickly as possible. But ensure that you do not use this as a threat every time because if you do so, then they may not take the threat seriously.

Step 4: Monitor the Deadline to File a Construction Lien and File Lien as Needed

As you move ahead in your process of determining how to get paid, and when you are entitled for the payment, the next step that you need to take is to monitor the deadline to file a construction lien and find out how to file the lien. This is crucial because a lien acts as an insurance policy which gives you the best chance to get paid. Here are the key pointers related to this step.

a. First step is to make yourself familiar with your state’s lien laws and timelines. In the state of Nebraska, you have 120 days from the date you last provided materials or services to the project to record your lien with the Register of Deeds in the county where the project is located. Remember that this 120-day deadline is a hard and fast rule. If you miss out the last day of the deadline, then you cannot record your lien.

b. One way to improve your ability to get paid as you move towards this deadline is having the permissive ability to issue a Notice of Intent to Lien. Although most of the projects in Nebraska do not require you to issue a Notice of Intent to Lien, it is a recommended step which will increase the seriousness of your payment dispute.

c. It is important that you file your lien but ensure that all the facts are correct so that you have a strong lien in your favor.

d. When dealing with liens, you must be aware of what type of project you are working on. This will determine whether it is beneficial to file the line well in advance of the deadline or not. Filing a lien has a huge impact on the project. For example, commercial projects often have a construction loan in place. When you file a lien, it puts a stoppage on issuance of further loan payments. This means that unless the owner or the general contractor clears your lien, they may not get additional funds.  

Similarly, when these projects are nearing completion, the owner may change the construction loan to a permanent financing. If you file your lien between this switch, then there is a higher chance of you getting paid promptly. This is because they will be stuck on their construction loan until your lien is resolved.  

e. Finally, you also need to be aware what are the other legal options that you can exercise to resolve your payment issues. For example, in public projects, you can make a payment bond claim which involves a surety who could help you in getting paid.

SunRays deadline calculator

Step 5: Commence Formal Collection Process

The last step is commencing the formal collection process which means turning over your case to a legal counsel because you have not received any response from the party who owes money to you. Now, you are at a stage where there is no option other than involving legal counsel to ensure that you receive your payment. Key pointers to remember when you are at this step.

a. There are various steps that your legal counsel may take, one of which is sending a demand letter. The details for this demand letter is taken from your written agreement, and may include information about the work performed, invoices issued, amounts owed, etc. All of this is put in the demand letter and sent to the party who owes you money. The letter also informs that if they fail to make the payment as per the timelines provided, you will go ahead with filing a lawsuit. A typical timeline would be anywhere between 7-10 days.  

b. Sometimes if there is no response for the demand letter, the legal counsel may follow-up with them via calls, emails, etc. In order to get the party moving, legal counsels often add some kind of incentive in the demand letter. For example, if your contract has a clause for recovering interest on late payment, then the legal counsel may calculate the total amount owed and clearly explain it. They may then also mention that the interest amount will be waived off in full if the original amount due is received within 7-10 days. This often gets the ball rolling as the owner or the general contractor will not want to pay an extra thousand or two thousand dollars, so they will try to pay you off as quickly as possible.

c. Finally, if the demand letter and follow-ups don’t work, then you need to weigh in the cost and benefits of filing a lawsuit. The best option is to have a detailed discussion with your legal counsel to understand what will be the cost of litigation, whether there is any potential to recover attorney fees, etc. In majority of the cases the potential to recover attorney fees is quite low.  

Apart from the cost perspective, you also need to analyze if there are any allegations of defective work or work not performed in the way it should have been. This is because if you do file a lawsuit, and there are allegations, then it is guaranteed that you will receive a counter-claim in your lawsuit. Depending upon the amount of controversy, the counter-claim may cost you more than your attorney fees or the amount that you are trying to collect. So, you must ensure that you first discuss the cost and benefits with the legal counsel and only then decide on whether or not to file a lawsuit.

Of course, everybody wishes to get paid for their work, but in the long run, you also need to analyze if it is worth pursuing the payment dispute and whether or not it will backfire on you. But following these steps is a great way for contractors, subcontractors, and suppliers in Nebraska to increase their chances of successful collection of amounts owed.

Disclaimer
THE INFORMATION ON THIS WEBPAGE IS NOT THE SAME AS LEGAL ADVICE. SUNRAY CONSTRUCTION SOLUTIONS, LLC IS NOT AN ATTORNEY OR A LAW FIRM. WE RECOMMEND THAT YOU CONSULT WITH AN ATTORNEY.
Ariela Wagner
Ariela Wagner
Preliminary Notice| SunRay Notice
Sign up for Exclusive Lien Law InformationAll our latest blogs delivered hot to your inbox!
Oops! Something went wrong. Please check!
Subscribe to Newsletter