For construction suppliers, contractors, and everyone else concerned with a project, you need to “follow the money!”
As a supplier, you have relatively few leverage points in protecting against a default in payment. This summary of mechanic’s liens in California hits the high points, and should give you an insight into one of your best mechanisms for recovering what is owed to you. You can follow the money in other ways, including filing a lawsuit or demand for arbitration under your basic contract with the subcontractor, general contractor or owner that ordered the materials or equipment in the first place. Likewise, an experienced lawyer can advise you of various precautions to take, such as a letter of credit, to avoid or lessen the credit risk. However, few remedies surpass the humble, but still effective mechanic’s lien. It has an out-dated name, but it can be your best friend, in a pinch.
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