In this rough economic climate, roofing distributors need to rely on everything in their tool kit to make sure contractors are responsible with their budgets and payments. That can include harnessing a pre-lien or notice.

But as “Credit Overlord” Thea Dudley, CEO of Pocket Protectors, explains in this video, roofing distributors need to exercise some discretion when using this process to speed up payments.

“As a distributor, if I have a customer that’s not paying me, and I’ve secured my lien rights, I can get paid for the materials, but that might have damaged the relationship,” said Dudley.

Even so, roofing distributors shouldn’t discount the pre-lien process, says Dudley, adding that it’s a great way to secure the money you’re owed with little effort and very little cost. In this video, Dudley talks about the pre-lien process from both a distributor and contractor point of view.

Pre-liens are statutory notices that let those involved on a project know you’ll seek payments if they don’t come through. Most people consider a pre-lien notice to be any notice or letter that a construction party (contractor, supplier, design professional) must give before filing a mechanics lien. In other words, a pre-lien notice is a preliminary notice.

“If you’re the distributor, you’re going to serve it on your customer,” she said. “If something happens and you’re not getting paid, you’re able to go ‘Okay, listen, I don’t want to have to put a lien on this property but I will.’”

Watch the full video here, or download the audio version on our podcast page and listen on the go.