How To Bury Your Competition Using A Lien Waiver Strategy

This is an effective strategy to use if you're in the trades or you use any type of contract labor in your customer's home to service or install a product or service.

You need to check your local, state, provincial or national laws to see if this strategy applies to where you conduct business. This is a strategy we created for a contractor in the United States that allowed them to completely separate their business from their competition and made them the obvious choice for their prospects to buy from them and them alone.

In the U.S., many builders, contractors and remodelers use contract labor. Often referred to as "subs," these are typically independent contractors that the principal builder ort contractor uses for certain jobs they or their crew typically don't handle themselves.

Some examples of this include electricians, plumbers, sheetrock installers, brick layers and stone masons, roofers and so on. In the U.S., if the builder has a dispute with any of these contractors and refuses to pay them in full (or perhaps not at all), the contractor can file a lien against the home.

Here's what that really means. If the homeowner attempts to refinance or to sell the home, they will be forced to pay off the total amount due to the contractor before they can complete the transaction. Obviously, this would not please the homeowner at all, especially since they paid the builder in full for the completed work.

The only recourse the homeowner has when this happens is to file a lawsuit against the builder. When this happens, if the builder is unethical, they can simply file bankruptcy and reopen their business the next week under a different name and never miss a beat.

This leaves the homeowner paying double for the work they had honestly and ethically contracted for and paid off in full. However, with our client, we had an attorney create a lien waiver release form stating unequivocally that any and all pay disputes would be settled and abided by a third party intermediary and the homeowner would be free and cleat of any legal dispositions not involving them directly.

Now… here's why this strategy works so well. I have NEVER met any homeowner that was even remotely aware of this potential legal landmine. And when they find out this possibility exists, they literally freak out. By creating this lien waiver letter and requiring all of the builders subs to either sign it or lose out on the opportunity to bid on the job, we were able to use this effectively in all of the builders marketing and advertising and help them separate their business from their competition.

Believe it or not, this type of event happens frequently in the home building and remodeling business. By offering a lien waiver signed by ALL of the sub-contractors as part of the contractor's service, the contractor can provide a powerful and compelling market dominating position that could skyrocket their business.