Category Archives: contract law

Business 101…Altisource and the Forced Lien Waiver

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Organics Admin

COO at Aladay LLC
Organic Farmer, Property Preservation Specialist and Custom Glass & Wood Worker. Blogger extraordinaire...
Organics Admin
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Forced Lien Waivers…Legal or Illegal???

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Contact us today for your consultation.

Yesterday I posted an article placing All Safe Home Watch Services on the Property Preservation Industry Watch List. This was done on the premise that in my humble opinion this FIELD VENDOR AGREEMENT Exhibit 2 – Subcontractor Acknowledgment Form Contractors/Labor is being forced to sign…or what is called a Forced Lien Waiver form. Now in some places this is illegal, as is here in Nevada, a contractor cannot be forced to waive lien rights prior to starting a job. In addition to the dozen or so phone calls asking if a Forced Lien Waiver was legal,several people also sent me a copy of this “agreement” asking if was actually legal. On the surface this Forced Lien Waiver appears harmless, Is IT????

So what about other states?  The representative from All Safe Home Watch Services  stated, “We only provide work orders in Florida on Altisource Properties.” A look at the map below and beings Altisource is located in Florida one would think that at least one of the companies in Florida would know their laws, as you cannot be forced to waive lien rights in Florida either. This is definitely a subject you’ll want research Forced Lien Waivers in you area. Yesterday I caught up with Scott Wolfe Jr. . Scott is an entrepreneur from New Orleans, LA. Founder of Zlien.com, a company that provides software and services to help building material supply and construction companies reduce their credit risk and default receivables through the management of mechanics lien and bond claim compliance.

Oh by the way…they also assist with the filing liens should they be necessary in collecting monies owed to you. Scott told me that on the surface there is no rule against indemnity agreements in general. Further, it is common for companies to require other companies to sign indemnity agreements.

I asked Scott if this FIELD VENDOR AGREEMENT Exhibit 2 – Subcontractor Acknowledgment or IMHO a Forced Lien Waiver Form that All Safe Home Watch Services was forcing Contractors to sign was legal…this is what he had to say…

When it comes to agreements like this in connection with any construction services (i.e. Subcontractors or suppliers providing labor or materials to a a construction improvement project), the indemnity agreements can get a bit sticky. This is not because indemnity agreements are not allowed, but instead, it’s because they cannot be used to circumvent ordinary lien rights.

I’ve written an article about “no lien clauses” that may be applicable, here:
http://www.zlien.com/articles/who-lets-you-waive-your-lien-rights-before-payment-state-by-state-chart-and-analysis/

Now make no mistake, IMHO “circumvent ordinary lien rights”, is exactly what is going on here. I’ve said it before and I’ll say it again. Anyone asking me to waive the only business avenue I have to collect the money you owe me SCREAMS I’m going to beat you one day. As to the legality of the issue, Scott went on to say;

It is usually not possible or legal for any party to require any other party to “waive” their lien rights within a contract prior to performing work. Despite this, many attempt to craft all sorts of legal protections within contracts to reach the same effect. That does not always make the legal protections completely meaningless (it can sometimes), but it does make them meaningless to the extent they seek to eliminate a party’s lien right.

When you cut through all the noise, it is almost always the case that a party who provides labor or materials to a construction improvement, if unpaid, can pursue payment against the property through a mechanics lien filing.

So now do you still think or not an employee? Better check yourself at the door. While you’re at it check your local Forced Lien Waivers Laws. Should you need assistance with a lien get a hold of Scott and tell him we say hello the folks over there will get you squared away. However, back to the subject matter at hand. Here is a quick look at a map on lien waivers.

Are Forced Lien Waivers Legal in your state?

no-lien-clause-map
TEASER…map from Zlien article on Lien Waivers and what states allow them.

The truth is, Altisource is the biggest Offender Member as they have been behind some of the biggest cases of defrauding Labor in the Property Preservation Industry, and every time they have been informed that one of the “distributers” of their work orders is not paying Labor, do they stop sending work orders to the criminal Offender Member to be processed??? NOOOOOOOOOOOO!!!!!!! Altisource continues to supply work orders instead of freezing the account in question making them an accomplice to the fraud perpetuated upon Labor. Now they want LABOR to sign a Forced Lien Waiver.

IMHO they are just as guilty as Eric Miller for not saying a word while collecting his ONE HUNDRED TWENTY THOUSAND DOLLAR salary from the monies that are put forth by the thieves called Offender Members. The fact that no one stops the continuous crime spree by Offender Members of the National Association of Mortgage Filed Services, or is it the National Association of Management For Stealing. Or should I be climbing all over Labor because they continue to facilitate Forced Lien Waivers by accepting work orders from NAMFS Members??? We stopped; our world didn’t come to an end. And believe me Twenty Thousand Dollars last a lot longer when you’re not spending $105.00 to get $100.

The problem I have with companies like All Safe Home Watch Services claiming National Coverage and only subbing locally is the fact they should be actually completing the services. So one has to ask are these people are they just plain LAZY? Obviously they do not understand the fine nuances of business in Florida or they would not be demanding Contractors sign this Forced Lien Waiver.

For the most part many of the “Subbers” (as I have termed them), that I have spoken to them they actually seem lackadaisical and indifferent to physical Labor, yes they seem too lazy to work. It’s much easier milking a broken system. A system that the Offender Members started to set up starting in 2009. It was around 2011 that many of the subbers started placing Forced Lien Waivers on work orders and in fact demanding that members of Labor sign and agree to their Forced Lien waivers.

2009, that is how long I have been saying there is something wrong in Gotham.  Foreclosurepedia has been saying the same and providing some deep information to back the statements up. For the most part all anyone really wanted was for Labor to be recognized. It should be noted here that many of the efforts of Foreclosurepedia lead to Altisource no wanting verification that the lazy subbers have actually paid Labor. In that respect you tip you hat to them. However, Offering thirty cents on the dollar while not forcing the thieves to pay their bills in unconscionable. Now they are asking their vendors to have Labor sign a Forced Lien Waiver. Something illegal in the very state they conduct business in.

When they, NAMFS, made a pseudo attempt to bring labor to the table, well again IMHO, it was a feeble attempt to buy time. There is a lesson for Labor here. NAMFS almost bankrupt one of their own members that spent upwards of $100.000.00 in sponsorship fees and membership dues. How was the company thanked for asking that Labor be acknowledged? Not one National or Mortgage House that was a member would work directly with the company. No Nationals would send the work orders from their offices on the east Coast all the way across the country and in turn they were then sent back to the East Coast. Lot of fricken’ money for a token nomination and no work.

Yes this is where the conspiracy comes in. You see Forced Lien Waivers have to be discussed, all of the activities going on between the membership of NAMFS under the watchful eye of Eric Miller have to be discussed, they have to be agreed upon. Altisource doesn’t just wake up and say Let’s send work from our office to this gal over here and we’ll have her send it back to our location…No this is talked about…discussed in great detail…conspired by the fire if you will…yes all these criminal violations and blatant flaunting of Federal RICO laws have to be  orchestrated…By an Executive Director…wonder if he’s gonna make a token 11th hour appearance at the next FAST event????

admin-7About Scott Wolfe Jr

Scott Wolfe Jr. is the CEO of zlien, a company that provides software and services to help building material supply and construction companies reduce their credit risk and default receivables through the management of mechanics lien and bond claim compliance. He is also the founding author of the Construction Finance Journal, a leading online publication about liens, security instruments and getting paid on every account. Scott is a licensed attorney in six states with extensive experience in corporate credit management and collections law, with a specific emphasis on utilizing mechanic liens, UCC filings and other security instruments to protect and manage receivables. You can connect with him via Twitter, LinkedIn and Google+.

Until Next Time folks

Happy gardening

Business 101…Credit Policies….Part Four

Organics Admin
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Organics Admin

COO at Aladay LLC
Organic Farmer, Property Preservation Specialist and Custom Glass & Wood Worker. Blogger extraordinaire...
Organics Admin
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Latest posts by Organics Admin (see all)

Today Lesson 6

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Contact us today for your consultation.

Concept 4:  Collection Policies

We’ve gone through the 4 key credit management concepts and addressed a lot of proactive measures you can take to reduce your credit risk and secure your debts. This final concept – the collection policy –addresses a reactive measure.  Unlike the other concepts, this becomes important only after an account goes into unpaid status.

Although the collections policy is reactive by nature, it is important to have a defined policy and procedure. In other words, you must be proactive about how your company will handle these reactive measures.

This lesson will give you an overview of collection policies, and help you decide on what type of collection policy best fits your organization’s needs.

As a reminder, the 4 Key Areas Are:

  1. Credit Policies
  2. Credit Applications
  3. Lien Policies
  4. Collection Policies

Collection Policy: An Overview

A collection policy is an important piece of a complete credit policy. In fact, a good collection policy, coupled with a thorough lien policy, may save a business the time and expense of litigation. While some collectors and collection agencies have rightfully gained a less-than-stellar reputation, a good in-house or outsourced collection program can benefit a business’ bottom line.

What Is A Collection Policy?

A collection policy is the set of procedures a company uses to ensure payment of accounts receivables. Similar to the credit policy as a whole, the collection policy should be written and strictly followed. Also similar to the credit policy is that the written collection policy serves as a sort of window into the company zeitgeist as far as how credit and debt are treated.

Further, strict compliance with the collection policy as its written allows the business to be more streamlined, with no time wasted on deciding when or how to respond to a certain debtor situation.

Generally, a collection policy systemizes the steps taken to recover amounts due prior to litigation.

This includes when customers should be contacted, how they should be contacted, how disputes are resolved, when internal or external “collectors” are used to step-up collection efforts as well as when and whether to turn the account over to litigation or write-off the debt.

Deciding On A Collection Policy

Once the decision has been made to formalize a collection policy it must be decided whether the policy will be formulated from scratch or whether the disparate pieces of the current collection structure can be melded into a cohesive outline.

Just like a comprehensive credit policy, a collection policy should not be an off-the-shelf or one-size-fits-all product. Each individual business will likely want to treat the collection policy in a different way – some are much quicker to send a sternly worded letter or firm phone call upon late payment, whereas some will let the account simmer for a short period of time.

As with many things in life and business, a moderate approach that balances the reality of the market with the need to get paid according to the terms of the credit extended is likely the best solution.

Strict adherence to the collection policy is generally best in order to streamline the process and exercise oversight of the decision making processes. That doesn’t mean that all clients must be treated the same under the collections policy. Clients with an established relationship, for example, may be extended the courtesy of an extra phone call or a couple letters before the account gets placed with an outside collection firm.

Business relationships can easily sour over something like sending a delinquent account to an outside collections firm, so that knowledge is important in the crafting of a proper policy.

In-House or Outsource Collection?

The first part of any collection policy is generally in-house. The question is whether or not the collection policy should keep the whole process in-house, or if it should eventually be outsourced, and to determine when that point comes.

Of course things like making a nice phone call before the payment is due in an attempt to ensure prompt payment, and even a stern letter after the debt becomes due can easily handled in-house. However, there are certain things that an outside collection company can do that would strain the time or resources of many businesses.

Outside debt collection agencies can be beneficial for several reasons, including their experience specifically in debt-collection, notifying the debtor that the company has escalated the debt collection process, spending time and resources to continually contacting the debtor with letters or phone calls and responding to and locking down promises to pay, reporting the debtor to credit bureaus, and more.

Clearly this must be balanced with the cost associated to use an outside collection agency compared to attempting to keep the process completely in-house. Some further discussion of the potential costs and benefits of an outside collections agency may be found by reviewing the following two articles:

The collections part of a credit policy can often be overlooked, but it is an essential part of a sound and comprehensive credit policy.

Related & Helpful Articles on the Web

Collection Tips: What’s Available To Get You Paid

You are in the construction industry and you’re waiting on payment. It’s a familiar scenario that can happen for a variety of reasons…but what do you do? What is the best way to collect? This presentation examines the tools available to you to collect on an unpaid account, including personal guarantees, joint check agreements, credit agreement provisions, mechanics liens and more

Why You Need A Collections Policy

In every industry there is a need for collections. Most companies are completely reactive in the collections approach. This tactic is not a smart one to live by. Being proactive with collections is one of the best things your company can do to improve its bottom line, and that means getting a collections policy in order.

admin-7About Scott Wolfe Jr

Scott Wolfe Jr. is the CEO of zlien, a company that provides software and services to help building material supply and construction companies reduce their credit risk and default receivables through the management of mechanics lien and bond claim compliance. He is also the founding author of the Construction Finance Journal, a leading online publication about liens, security instruments and getting paid on every account. Scott is a licensed attorney in six states with extensive experience in corporate credit management and collections law, with a specific emphasis on utilizing mechanic liens, UCC filings and other security instruments to protect and manage receivables. You can connect with him via Twitter, LinkedIn and Google+.

Until Next Time

Happy Gardening