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I am a contractor. I own a contracting business. We are pipefitters who do sprinkler systems and underground gas lines.

I MUST put a lien on a property in order to secure a bank loan to buy materials. Not all jobs mind you, say if the job calls for under $40k in materials, we will cover the materials (depending on the client, and if we have done business with them before).

But say for a job requiring $200k + in materials our bankers will NOT loan us the money for the materials unless we file a lien at the start of the job.

It is standard operating practice here in Illinois, I don’t know about other states, but the states around me (WI, IL and Iowa) are pretty much the same.

A lien is your collateral in case the project goes belly up (bankrupt) during contruction and it prevents the owner from selling the property during construction (you cannot change title if you have lien against you).

Also, payment of liens are on a first come first serve basis, so if the project does go belly up, and there is a bankruptcy dispersment, you want your lien at the top of that heap when the judge looks dispersements.

This is non-sense journalism.

I have put liens on highways and municipal buildings (they don’t mean squat in terms of a bankruptcy, like if Illinois goes bankrupt), but they give me recourse to get paid in a timely fashion (well, they used to, not any more and we don’t do state projects anymore).

What the lien does in those instances is allows me to get interest against the assets that I have provided. Say the state is two years late in paying me for materials, I can get a judge to order the state to pay me for that interest and penalties that we incurred (and this has happened.

Garbage reporting meant to make Trump look bad. But we all know that.

But say for a job requiring $200k + in materials our bankers will NOT loan us the money for the materials unless we file a lien at the start of the job.

That lien is the assignable collateral for the bank to lend you that money. . . It gives them assurance they can go after someone with greater assets than you (not that they won't go after you, as well) if you default to recover the principal of the loan.