There are three main ways contractors can effectively deal with construction cost increases: financing building material purchases, adding a margin to their estimates, or including an escalation clause in the contract.

1. Protect your Lien Rights

Protecting your lien rights is one of the most critical steps in protecting your right to payment for what has been delivered to a job site.

Most states base the amount allowed on a lien on the true and fair value of the material and labor delivered to the job site, so even if your contracts list pre-tariff pricing, there may be recourse.

Make sure to check our state-by-state guide Here, and make sure to understand if you are in a state that requires an amended preliminary notice if costs increase substantially.

2. Increase your margins

Contractors can raise their prices to their customers in order to offset potential cost increases. How much to raise prices depends on the length of the project and the materials you are using. 

One problem with raising margins: There’s no guarantee that prices won’t increase more during the duration of the project. You may be limited in your ability to recapture that lost income. 

And with intense competition for projects, contractors who attempt to cover potential cost increases in their price may find themselves losing bids. Other contractors may not be keeping pace with pricing changes.

That’s not necessarily a bad thing. Competing on price is almost always a lose-lose proposition. Taking a low- or no-margin job may be an effective way to get your foot in the door with a GC or developer — but it’s not an effective long-term strategy. Instead, focus on the value that your company brings to the job.

3. Include an escalation clause

An escalation clause in the contract allows contractors to recoup costs caused by price increases. The clause usually stipulates a percentage increase that costs must exceed before the clause kicks in. 

For example, an escalation clause may say that, if material or labor costs increase more than 3% during the project, the contractor has the right to request additional funds from the owner for the increase. 

These clauses protect contractors and owners alike. Without an escalation clause, contractors will raise their bids to cover potential price increases. With an escalation clause, contractors can provide a more competitive estimate without additional margin for risk.

Watch the webinar: How to use contract clauses to defend against material price swings

The rise in construction costs is expected to continue

All contractors operate on credit, effectively financing their customer’s projects with their own money. An increase in construction costs means higher credit risk. Don’t forget that problems with payment add costs to the job as well. 

Even if you double your margins, a missed payment can erase any potential gains you might have earned. Make sure you are also taking steps to protect your payment and get paid faster on every project.

Concerned about how you can protect your bottom line and speed up slow payments as a result of sharply rising costs? Request a call Here from one of our payment experts today.

The post 3 Ways to Reduce Payment Risk With The New Tariffs And Rising Construction Costs appeared first on Levelset.

In recent years, we’ve seen a significant shift in the industry landscape. More women are entering construction-related fields, bringing fresh ideas and approaches to longstanding challenges. This is particularly evident in the realms of construction technology and credit, where women are leveraging their expertise to streamline processes, improve efficiency, and drive profitability. From developing cutting-edge software solutions to implementing sophisticated financial strategies, women are proving that diversity in thought and experience leads to better outcomes for everyone in the industry.

However, challenges persist. Women in construction often face unique obstacles, from unconscious bias to a lack of mentorship opportunities. Despite these hurdles, many are thriving and paving the way for future generations. By sharing their stories and insights, these trailblazers are not only inspiring others but also actively shaping a more inclusive and innovative future for the construction industry. As we look ahead, it’s clear that embracing diversity and supporting women in construction technology and credit isn’t just the right thing to do – it’s a strategic imperative for any company looking to stay competitive in an evolving marketplace.

The post Empowering Women in Construction: Insights from the Intersection of Technology and Credit appeared first on Levelset.

At this dynamic event, attendees will experience the National Craft Championships, the Construction Management Competition, the National Excellence in Construction® Awards, and the Construction Workforce Awards. Plus, industry experts will take the stage to share insights on the latest trends, technology, and strategies shaping the future of construction.

Levelset + Procore: Helping Construction Businesses Scale Confidently

Levelset is excited to attend this event alongside Procore at Booth #1307! We’re looking forward to connecting with industry leaders, contractors, and suppliers to discuss how we help teams get paid faster, reduce financial risk, and scale their businesses with confidence.

As part of the Procore family, Levelset empowers construction teams by streamlining lien rights management, automating compliance, and providing visibility into payment processes. By ensuring predictable cash flow and reducing administrative burdens, we help businesses focus on what they do best – building great projects.

Meet Us at Booth #1307!

If you’re attending ABC’s Annual Convention, don’t miss the chance to visit Booth #1307 and connect with us! Whether you’re looking to improve financial stability, automate processes, or simply learn more about how Procore and Levelset can help your business grow, we’d love to chat.

Join us in celebrating 75 years of ABC’s impact on the industry—see you in Las Vegas!

The post Join Levelset and Procore at ABC’s 75th Annual Convention in Las Vegas! appeared first on Levelset.

Illinois Enacts HB 4660 to Streamline Notice Process

On August 9, 2024, Illinois Governor JB Pritzker signed HB 4660 into law, simplifying how subcontractors can secure their mechanics lien rights. Let’s look at these changes, when they go into effect, and how they help subcontractors get paid what they’ve earned.

Bill Overview

• Title: House Bill 4660: Mechanics Lien – Notice
• Sponsor(s): Rep. Bob Morgan & Sen. Elgie Sims
• Effective Date: January 1, 2025

The Current Process

Under 770 ILCS 60/24, subcontractors in Illinois must provide a Notice of Intent to Lien within 90 days of the last date they furnished labor and/or materials to the project. This requirement is reasonably straightforward. However, the delivery method makes it difficult for subcontractors. The notice must be either personally served or mailed by registered or certified mail, with a return receipt requested. Delivery must be limited to the addressee only.

This method of mailing is particularly burdensome and presents a litany of challenges. The addressee may not be available at the time of delivery. Service can’t be completed if the individual is out of the office or on vacation. Even worse, the addressee may refuse to sign for it, and a signed green card is crucial when it comes to enforcement. This can add undue delays that could call into question whether the individual received notice. Anyone who regularly uses USPS can attest that it is not always the most reliable; mailing can be delayed or not even served due to internal system issues.

What’s Changing in 2025?

The new law introduces several updates, most notably by expanding the delivery options for notices. Starting in 2025, subcontractors will have the following methods of delivery available to serve this notice:

• Certified or registered mail with return receipt requested (still an option, but delivery restricted to the addressee is not required);
• A nationally recognized delivery company with tracking service (such as FedEx, UPS, or DHL); or
• Personal service (handing the notice to the owner or agent).

First and foremost, eliminating “delivery restricted to the addressee” is a critical update to Illinois’ lien laws. However, adding major delivery carriers like UPS and FedEx helps ensure that subcontractors can track the delivery of their notices, increasing reliability and reducing the risk of missed or delayed deliveries.

Why This Matters for Subcontractors

Lien notices are critical for subcontractors to secure payment for their work. Under the current system, delays or missed deliveries due to issues with USPS or the addressee’s availability can result in an unenforceable lien. Using services like FedEx or UPS provides more flexibility, giving subcontractors the tools to ensure notices are timely and tracked correctly. This vast improvement increases the chances of a subcontractor’s lien being upheld.

Additionally, the new law clarifies when the notice is considered served. It is deemed served as soon as it is placed with the delivery service or in the mail. This eliminates ambiguity and helps subcontractors comply with the 90-day timeline for filing liens.

In short, HB 4660 is a win for subcontractors. The new law streamlines the notice process, making it easier to protect lien rights and get paid for work. By offering more reliable delivery options, clearer service timelines, and reduced dependence on outdated postal services, subcontractors can ensure that their notices reach the right people on time and are backed by proper tracking.

The post Changes to Illinois’ Mechanics Lien Laws Simplifies Notices in 2025 appeared first on Levelset.

Trusted by the Nation’s Largest Suppliers Since 2008

Since 2008, Levelset has been trusted by some of the nation’s largest construction suppliers to secure lien rights and help merchants better manage payments. Our solutions are designed to simplify and streamline the lien management process, providing unparalleled support and efficiency.

Send Accurate Prelims at Scale

Companies that partner with Levelset confidently manage preliminary notices by leveraging our research team. We verify information against our extensive database and investigate your job using hands-on resources, ensuring your prelims are more accurate and timely.

Save Time with Automated Lien Waivers

Simplify your paperwork by automating lien waivers for thousands of jobs based on Accounts Receivable or paid invoices. Our automated system ensures that lien waivers are sent promptly, reducing the administrative burden and freeing up your time.

Better Manage Deadlines to Secure Lien Rights

Stay on top of critical lien document deadlines with our notification system, which alerts you when a deadline is approaching. This allows you to confidently secure lien rights on projects for your customers and helps ensure you don’t miss a crucial step in the process.

Levelset supports the construction industry with innovative solutions that drive efficiency and success. We are excited to bring these powerful tools to even more professionals, helping them achieve their business goals and thrive in a competitive market.

The post Levelset and American Express Team Up to Empower the Construction Industry appeared first on Levelset.

Colorado Verified Statement of Claims on Public Projects

A Colorado Verified Statement of Claim (VSOC) ensures subcontractors and suppliers get paid for labor and/or materials provided to a public construction project. In CO, if a contractor or sub hasn’t been paid, they can file a VSOC with the public entity in charge of the project. The VSOC essentially operates as a lien on project funds, meaning the public entity must hold onto the claimed amount until the payment dispute is resolved. The claim must be signed under oath and only include amounts due for work or materials provided. However, as highlighted in the recent Wadsworth case, understanding the proper scope of what can be included in a VSOC is crucial, as filing an excessive or disputed claim can lead to severe legal and financial consequences.

Wadsworth Case Background

The case in question is Ralph L. Wadsworth Constr. Co. v. Reg’l Rail Partners

Project Snapshot

• Public Entity/Owner: Regional Transportation District (RTD)
• General Contractor: Regional Rail Partners (Regional Rail)
• Subcontractor: Ralph L. Wadsworth Construction Company, LLC (Wadsworth)

In this case, Wadsworth was hired as a subcontractor on the North Metro Rail Line project, with a contract value of nearly $60 million with Regional Rail. However, the project faced a slew of delays and disputes. As the project neared completion, Wadsworth filed a VSOC claiming almost $13 million from RTD, the public entity overseeing the project. RTD bonded off the claim, and several months later, Wadsworth sought to enforce it. RTD contested the claim, arguing that it was excessive. At trial, the court ruled in favor of Wadsworth, awarding about $5.7 million. RTD appealed the decision.

The appeals court focused on two main issues:

1. Whether unliquidated breach of contract claims for delay damages could be included in a VSOC.
2. The consequences of filing an excessive claim.

Permissible Scope of a CO Verified Statement of Claim

Under Colorado’s Public Works Act §38-26-27, subcontractors can file a VSOC for “the amount due and unpaid” for “furnished labor, materials, sustenance, or other supplies used or consumed by a contractor or… subcontractor in or about the performance of the work contracted to be done” or for “laborers, rental machinery, tools, or equipment to the extent used in the prosecution of the work.”

The court found that delay damages – such as lost profits, overhead costs, and unapproved change orders – did not fit within the scope of what can be claimed under the statute. These damages are considered “unliquidated,” meaning they are not fixed or agreed upon at the time of filing. The court emphasized that a verified statement of claim should only include amounts that are clearly due, such as labor or materials already provided, rather than future or disputed claims.

As the court noted, “Due is defined as ‘[i]mmediately enforceable’ or ‘[o]wing or payable; constituting a debt.’ In other words, an amount is not ‘due’ if it will only be owed upon some contingency or after the satisfaction of a condition precedent.” The ruling makes it clear that subcontractors cannot include unapproved or disputed amounts in their claims.

Impact of Filing an Excessive Claim

The court also addressed the consequences of filing a claim for an amount greater than what is actually due. According to Colorado law, if a subcontractor files an inflated claim, especially when they know it is excessive, they forfeit the entire claim.

The appeals court ruled that Wadsworth’s $12.7 million claim was excessive due to the inclusion of unapproved change orders and disputed delay damages. As a result, despite the trial court’s earlier award of $5.7 million, the appeals court ruled that Wadsworth forfeited the entire claim. This underscores the serious consequences of overestimating the amount due and highlights the importance of ensuring that claims are reasonable and supported by clear evidence. Importantly, the court found that Wadsworth “knew” the claim was excessive because it included amounts not agreed upon by the parties, such as unapproved change orders and delay damages. This underscores that subcontractors must be mindful of their knowledge when submitting claims to avoid risking forfeiture.

Key Takeaways

The Wadsworth case serves as a strong reminder for subcontractors to ensure claims are based on amounts that are clearly due and fully supported by documentation. The court ruled that delay damages, unapproved change orders, and impact costs are not automatically lienable, as they are often unliquidated and contingent on future events. This reinforces the need to include only amounts for work that has already been performed, such as labor and materials. Additionally, submitting an excessive claim can have severe consequences, as seen when Wadsworth’s $12.7 million claim was reduced to $5.7 million, and ultimately forfeited due to the inclusion of disputed and unsubstantiated amounts.

The decision also underscores the importance of accurate and thorough documentation. Wadsworth’s failure to finalize or execute change orders contributed to the court’s decision to invalidate part of its claim. For construction professionals, this case highlights the need to file only for undisputed, liquidated amounts and to keep disputed items separate. Moreover, the court’s focus on Wadsworth’s “knowledge” of the claim’s excessiveness serves as a crucial reminder that subcontractors must carefully consider whether they are filing claims for amounts that are genuinely owed and agreed upon by all parties involved.

While this case dealt with claims under the Colorado Public Works Act, the result may have ripple effects on private mechanics liens as well, making it crucial for contractors to be cautious when filing claims for damages beyond labor and materials. The Wadsworth case sets a precedent that may influence both public and private construction disputes moving forward, urging subcontractors to avoid claims that are overly broad or uncertain.

The post The Consequences of Overstating Claims Under Colorado’s Public Works Act appeared first on Levelset.

Building a Strong Foundation Together

Kodiak’s partnership with Levelset isn’t just transactional; it’s strategic. From day one, Kodiak saw the value Levelset brings to the table, especially in terms of providing tools and resources to support their credit professionals. Kodiak’s goal has always been to ensure their team has what they need to succeed, and Levelset’s lien and bond management tools, job radar, and risk management systems have allowed Kodiak to strengthen their payment processes. These tools offer a clear, reliable way to monitor construction payments and reduce risk, giving Kodiak peace of mind and control over their receivables.

Kodiak appreciates Levelset’s attention to detail that comes with every interaction. Whether it’s the precision of the tools or the responsive support team, Kodiak has felt that they’re in great hands. This attention to detail isn’t just about problem-solving; it’s about proactively helping Kodiak avoid issues before they arise, ensuring that every project is covered, and all the necessary steps are taken to protect their payment.

A Real Partnership

The trust between Levelset and Kodiak has been built on collaboration. As a locally led company, Kodiak values partners that align with their values and mission. The relationship goes beyond software—Levelset is a true ally, supporting Kodiak’s credit professionals with the tools they need to streamline workflows and eliminate manual processes. This partnership gives Kodiak the bandwidth to focus on what matters most: growing their business and serving their customers.

Transforming Payment Processes for Growth

With the support of Levelset’s lien rights management tools, Kodiak has been able to secure faster payments, reduce risk, and enhance day-to-day operations. As a result, Kodiak’s credit team now has the time and resources to focus on other critical tasks, which is key to their continued growth. The baseline of success that comes with using Levelset’s tools has allowed Kodiak to monitor payments more effectively and ensure the longevity of their business.

A Bright Future Ahead

Kodiak has grown tremendously over the years, and with Levelset by their side, they’re confident that growth will continue.

“I would highly recommend Levelset. I think the sky’s the limit for both Levelset and Kodiak.” – Darius McCurty, Senior VP & Controller 

The collaboration between Kodiak and Levelset is a testament to the power of a true partnership. By providing the tools and resources Kodiak needs to succeed, Levelset has helped transform their payment processes, improve efficiencies, and support their impressive growth. As Kodiak continues to expand, there’s no doubt that Levelset will remain an integral part of their journey forward.

The post Kodiak’s Full Story: How Levelset Helps Their Growth and Streamlines Payments appeared first on Levelset.

Case Overview: Green Field Construction Group, LLC v. Marjam Supply Company

The case in question: Green Field Construction Group, LLC v. Marjam Supply Company

Project Snapshot:

• General Contractor: Green Field Construction Group, LLC (“Green Field”)
• Subcontractor: Hevy Contractors, LLC (“Hevy”)
• Supplier: Marjam Supply Company (“Marjam”)

Green Field was a construction manager/GC for a residential condo project (“The Lofts at Pier Village”) in Long Branch, NJ. The project occupied an entire city block; however, there were some space limitations for storing materials and equipment. To address these storage limitations, Green Field leased a vacant lot across the street from the project.

Green Field hired Hevy as a subcontractor and enlisted Marjam to supply materials for the project. According to the contract, Marjam delivered materials and equipment to the vacant lot, which were subsequently used in project construction across the street. Ultimately, Marjam claimed they were unpaid for the equipment and materials provided, so they filed a construction lien on the vacant lot for $136,180,02.

Marjam followed all the statutory requirements to file a construction lien. However, they followed the procedure for perfecting a construction lien on a commercial project, not a residential one. The Lofts clearly fall under the statutory definition of residential construction, “construction of or improvement to a dwelling, or any portion thereof, and any residential unit, or any portion thereof.”

Marjam argued that they delivered the materials and equipment to the vacant lot, which was in commercial use, and no residential construction project was underway on the vacant lot, but the court disagreed. The statutory requirements to file a Notice of Unpaid Balance and an Arbitration Demand apply to cases arising from a “residential contract” and went on to state:

It is the object of the contract that triggers the statutory prerequisite, not the nature of the parcel at which materials and equipment are delivered. Marjam’s reliance on the commercial use of the vacant lot to follow to the statutory procedures for filing a construction lien claim relating to a commercial development was misplaced.

Marjam appealed the decision, but the appeals court upheld the lower court’s decision; invalidating Marjam’s lien claim. stating that the lien was invalid. Marjam thought it could treat the lot as commercial property, but since the materials were meant for a residential project, it failed to meet the specific requirements under New Jersey’s Construction Lien Law (CLL). This misstep cost Marjam its right to enforce the lien.

The Green Field case serves as a wake-up call for anyone in the construction industry. By staying informed and doing your homework, you can better protect your interests and ensure you get paid. In a field where financial security is key, knowledge is your best ally. So, stay sharp, communicate well, and always make sure you’re following the legal requirements to safeguard your lien rights!

Trying to find job information?

Learn more about job research at Levelset. We track down the property owner, GC, legal property description, and other hard-to-find information you need to file a lien or other documents.

Why Accurate Project Information Matters

Know your project type

Understanding whether a project is residential or commercial is crucial. This distinction sets the rules for notices, lien filings, and any additional paperwork you’ll need. In New Jersey, the process for filing a lien for residential projects involves specific steps. This includes sending in a Notice of Unpaid Balance & Right to Lien and an arbitration demand. (For more on this see: NJ Residential Liens: A Convoluted Process) Misclassifying a project can lead to significant financial headaches, as Marjam found out when its lien was dismissed, costing them the chance to get paid.

Do your research

Before filing a lien, make sure you do your homework. Identify all the stakeholders involved in the project, such as the owner, general contractor, lender, and anyone else with an interest. It’s also important to know the exact location of the property being improved and to describe it accurately in your filing—whether that means providing a street address or a full legal property description. Additionally, get a solid understanding of how your materials will be used on the project and familiarize yourself with the legal requirements for different types of projects in your area. A little research can save you from costly mistakes and help you stay compliant with the law.

Keep communication open

Good communication with your subcontractors and general contractors is key. Regular check-ins about the project’s scope, timelines, and material usage can help everyone stay on the same page. This way, you reduce the risk of misunderstandings and ensure everyone knows what they need to do, making the whole process smoother.

The post Project Research Matters: Lessons From a Recent New Jersey Lien Case appeared first on Levelset.

Why a Career in Construction is More Than Just a Job
A fulfilling career in construction goes beyond earning a paycheck. Here are just a few reasons why more people should consider this path:

• High Demand for Skilled Workers: The growing shortage of skilled professionals creates a wealth of opportunities for career growth and stability.
• Tangible Impact: Construction workers leave a lasting legacy, shaping the communities we live in and creating spaces that foster connection, commerce, and creativity.
• Innovation and Technology: From automation to project management software, the construction industry is embracing cutting-edge technology, opening up new opportunities for career development.
• Rewarding Pay: Many roles in construction offer competitive salaries and benefits, especially for those with specialized skills.

As we celebrate this month, it’s essential to showcase the exciting and rewarding aspects of a career in construction to inspire the next generation of builders. If you or someone you know is considering a future in the industry, now is the perfect time to take the leap.

P.S. Check out our recent webinar with our partners at SRS Distribution to learn about their strategy in making credit more attractive to the younger generation of construction professionals. Chris Arrington, SVP / Chief Credit Officer and Charles Edwards, VP of Credit Operations cover the following topics:

• How to attract the next generation of construction credit managers
• How to make credit exciting as a profession
• Retention strategies to keep talent engaged

The post Careers in Construction – Building a Future, One Skilled Professional at a Time appeared first on Levelset.

Expert Support in Complex Areas

From the outset, Levelset recognized the complexity of Kodiak’s operations, spanning multiple states with different lien requirements. It’s nearly impossible for a single company to be an expert in the legal nuances across so many regions. That’s where Levelset steps in, providing expert lien rights management that alleviates these challenges. With their support, Kodiak can continue to focus on growth without the legal headaches, knowing their compliance is in trusted hands.

Tailored Solutions for Unique Needs

What truly sets this partnership apart is Levelset’s keen understanding of Kodiak’s goals. This isn’t a one-size-fits-all approach; Levelset has tailored its services to support Kodiak’s business model, catering to their unique needs in ways that allow Kodiak to operate efficiently and at scale. Levelset has become more than just a service provider—they’ve become a partner, integrated into Kodiak’s workflow and committed to moving the ball forward alongside them.

Driving Growth with Innovation

Kodiak’s mission has always been to move with high speed and velocity, and Levelset matches that pace. As an innovative company, Levelset shares this growth-oriented mindset, continuously evolving their offerings to support Kodiak’s long-term goals. They understand not only where Kodiak is today, but also where they’re going. As Kodiak continues to expand and lead in their industry, Levelset is right there with them, providing the tools and expertise to drive that success forward.

A Partnership Built for the Future

In a world where true partnership is hard to come by, Levelset and Kodiak have proven that it’s not just about providing a service—it’s about understanding, collaboration, and shared ambition. Together, they’re pushing the boundaries of what’s possible, driving innovation, and ensuring that both companies continue to grow and thrive.

The post Beyond Partnership: How Levelset and Kodiak Collaborate for Success appeared first on Levelset.