Nate Budde

Nate is an attorney licensed in Louisiana and Texas, and is the Chief Legal Officer at levelset.com, a construction software platform that helps contractors and suppliers get payment under control, facilitate smooth payments and work for successful projects. Levelset empowers people in the construction industry to always get what they earn, and work for successful outcomes. Nate helps construction participants understand how to optimize financial and credit risk management through promoting visibility and collaboration.

Articles by Nate Budde

• Joint checks: Make sure you follow these guidelines to get paid

  Tuesday, August 27, 2019

  Simply put, a joint check is a check made payable to two or more parties, such that both parties must endorse the check prior to deposit. A joint check agreement, therefore, is a contract through which one party agrees to (or gives permission to) make payment in the form of joint checks. While joint check agreements are just contracts, and can exist in any industry or between any group of parties, they are most common in construction, and used to manage payment on construction projects far more than anywhere else.

• Filing a mechanics lien is great protection — but only if it’s available

  Wednesday, December 06, 2017

  ​The ability to file a mechanics lien is a powerful tool for construction industry participants to guard against nonpayment. Possessing a valid, enforceable mechanics lien can virtually guarantee that a construction company will get paid for the work performed or materials furnished.

• Are electronic signatures valid for lien waivers?

  Thursday, July 06, 2017

  ​For being such a document-intensive industry, the construction industry is notoriously slow to adopt new technology. Even when technology could significantly streamline and improve tedious business processes, it is oftentimes viewed with suspicion and distrust.

• Lien laws can change drastically — Make sure your procedures change with them

  Thursday, April 13, 2017

  Mechanics lien rules and requirements are complex and demand strict compliance. With the high stakes associated with providing proper notice and protecting lien rights, it would be nice to be able to assume the laws remain relatively constant. Unfortunately, however, lien laws are not static. While most changes are relatively minor — in that the change only modifies a single requirement (or a small handful) — there is the real possibility that a state's entire lien law scheme can be altered. When this type of wholesale change occurs, anybody left unaware can be left scrambling to catch up, or just left unprotected.

• The difference between fair and fraudulent mechanics liens

  Tuesday, March 07, 2017

  Mechanics liens are extremely powerful tools for protection against nonpayment in the construction industry. Just like any powerful tool, however, mechanics liens can be abused. Unscrupulous parties who want to get more than their proper share, who just want to cause problems for a particular project, or are just looking to make a fraudulent grab for cash sometimes file liens for these underhanded purposes. Filing an incorrect and improper mechanics lien for a knowingly fraudulent purpose is problematic in several ways.

• Defending a bond claim: What to look out for

  Thursday, February 02, 2017

  In order to discuss the appropriate ways in which to defend against a bond claim in any meaningful way, some background should be provided regarding what payment bonds are, and how they work. While there are multiple types of bond in the realm of construction — bid bonds, performance bonds and payment bonds to name three — the focus of this article will stick to payment bonds.

• What happens when state laws conflict with a bond’s terms?

  Wednesday, December 07, 2016

  Payment bonds always have specific terms that purportedly must be followed to make a successful claim on the bond for payment. In a significant number of cases, however, the requirements for making a bond claim are also simultaneously regulated by state statute.

• Pay special attention to these construction documents

  Wednesday, November 02, 2016

  ​People and companies in the construction industry are routinely put in positions where they are forced to navigate complicated legal documents as part of the everyday project and payment process, often without the oversight and support of a construction lawyer.

• Take a page from workplace safety to improve construction payment

  Thursday, September 08, 2016

  ​While safety on construction sites has dramatically improved over the last several decades, no such strides have been made in construction payment. The payment chain features a cover-your-(butt) mentality that has given rise to liability-shifting payment devices such as pay-if-paid and pay-when-paid contracts.

• Priority is king with liens, so what happens when everyone wants the same money?

  Thursday, August 18, 2016

  Mechanics liens are a great way to secure payment on a construction project. Rather than relying on contractual remedies, a mechanics lien allows a party to encumber a property until the debt has been paid. Lien law can be a load to handle by itself, but lienholders have even more to worry about when multiple secured creditors are involved. In these situations, priority can make or break a claim.

• How a Miller Act claim can get you paid on a federal project

  Thursday, July 07, 2016

  To understand the Miller Act, it's important to note why the act was even necessary. A subcontractor's favored recourse for nonpayment is often a mechanics lien. Mechanics liens allow for a labor or material provider to encumber the property where work was done until they are paid. If not paid, they can then foreclose on the lien and force the sale of the property, and the payment due is taken from the sale price.

• For liens, timing is everything — even if you’re right

  Wednesday, June 15, 2016

  As far too many unpaid construction industry participants have come to learn, filing a lien requires more than just being owed money — it also requires strict adherence to the administrative guidelines set forth by the laws of the particular state. And this is true for both liens filed against private property or bond claims for public projects.

• Watch out for lien subordination

  Thursday, May 19, 2016

  Lien waivers are important in construction payment. The parties in control of the money want the project to proceed free of lien claims, for several reasons. While not an exhaustive list by any means, mechanics liens can potentially force double payment, cloud the property title, and negatively impact bonding capacity and cash-flow. Any of these problems can lead to the job falling behind schedule, running over budget or not being completed.

• How lien waivers can benefit entire projects

  Thursday, April 07, 2016

  What makes a successful waiver policy? Waivers must be sent with the proper payments. Also, the waiver must written correctly and fairly (some states provide statutorily required forms) and the proper type of waiver should be used (there are four types depending on the stage of the project and the type of payment being made).

• How to get paid by waiving your lien rights

  Tuesday, March 08, 2016

  Mechanics liens are powerful tools, for many reasons. Ironically, one of the most effective "uses" of your mechanics lien rights is not using them. Waiving your right to file a lien may be the fastest way to get paid. To understand why, it helps to consider the potential consequences of a validly filed mechanics lien: stopped projects, compromised funding, lawsuits, foreclosed property and more. Due to the severity of these potential consequences, parties at the top of the contracting chain want to avoid mechanics liens being filed against their property and on their projects.

• How to develop and implement a preliminary notice policy

  Thursday, February 04, 2016

  ​The construction industry runs on credit. As such, most credit departments (and some smaller financial teams) have credit policies that guide when to extend, and how to collect, credit. A preliminary notice policy sits within your credit policy, describing how to incorporate and protect mechanics lien rights. Specifically, this type of policy details when and how to secure debts using preliminary notices (sometimes called notices to owner or pre-liens), and it expresses your team's philosophy toward lien rights.

• Bonding off liens: Projects keep moving and claimants get paid

  Tuesday, December 08, 2015

  Mechanics liens are powerful tools. Through the consistent use of these security instruments, construction industry participants can nearly assure payment on every project. However, because liens are such powerful tools, they can have consequences that reach beyond getting the claimant paid.

• Increase cash flow through mechanics liens and bond claims

  Thursday, November 05, 2015

  Construction industry payment challenges can limit a company's available cash and result in too much past-due A/R. Because of this, construction companies fail at a higher rate than nearly any other industry. However, even when the problems are mere annoyances and frustrations and don't rise to a level critical for the solvency of the business, the associated headaches and the time consumed just trying to get paid can be severely burdensome.

• Common lien waiver problems and solutions

  Thursday, October 08, 2015

  Lien waivers are commonly exchanged on construction projects, and they are crucial to the payment process. However, the ubiquity of lien waivers doesn't mean they are always well understood, or that problems don't arise from their exchange.

• Reduce your risk through better visibility

  Wednesday, September 02, 2015

  Construction payment is complex and full of challenges. The credit-heavy nature of construction projects and the lack of visibility throughout a project can give rise to critical payment problems that can reverberate up and down the payment chain.

• Construction contracts: It’s better to be friendly, fair

  Thursday, August 06, 2015

  Construction contracts can be long and complicated documents, and form the basis of the relationships between the signing parties. Generally speaking, parties at the top of the contracting chain have more leverage, and can use their contracts to shift financial risk down the contracting chain. Despite the ability to shift this financial risk, and the real and worthwhile desire of all companies to protect themselves, it makes more sense over the long run, and in terms of building repeatable and lucrative relationships, to contract fairly.

• Being fair can improve your construction business

  Thursday, July 23, 2015

  Honesty, respect, integrity, ethics. These values are the backbone of any successful business. In the construction industry, every party on a project is so interconnected that these four values are not just important to a single party or one contract, but are fundamental to the entire project.

• Watch out: These construction documents are not standardized

  Thursday, June 18, 2015

  Construction industry participants are routinely required to navigate complicated legal documents as part of the project and payment process. Legally significant documents are exchanged every day, and often without significant review. The nature of construction payment requires documents that can have a significant impact on a party's legal rights to be exchanged all of the time. While some construction documents have moved toward standardization, others inhabit the Wild West of legal contracts — where almost anything goes.

• It pays to scan your contracts for lien subordination clauses

  Thursday, April 16, 2015

  Lien waivers have an important place in the construction payment process. The parties in charge, or "at the top," of a project (the property owner, lender, construction manager or general contractor) are highly motivated to make sure the project proceeds free of any lien claims. In fact, since mechanics liens cloud the property title and negatively impact bonding capacity, they may actually prohibit the job from getting completed successfully.

• Combating slow payment (and nonpayment) in the construction industry

  Thursday, April 02, 2015

  Most of the time, invoices get paid. In the vast majority of cases, invoices are paid well before they age enough to cause a significant worry. Despite this, however, there is an entire industry of credit and financial managers who are dedicated to helping companies manage, and ultimately collect, those problem invoices.

• Strengthen relationships through technology

  Thursday, March 19, 2015

  ​The construction industry is based on relationships. While the same can be said for many industries, the unique nature of construction projects puts these relationships into stark focus. The construction payment structure is complex, and the extensive network of parties on every construction project means there are inevitable payment delays. Building stronger relationships, and playing fair, can result in less payment trouble and more clarity.

• How construction companies can maximize the benefit of the growing economy

  Thursday, March 05, 2015

  It goes without saying that a strong economy is generally better than a weak economy. For construction companies, however, a growing economy can be fraught with peril. In fact, subcontractor failure rate is three times higher in a recovering economy than it is when the economy is stagnant.

• Technology can make the cash flow for material suppliers

  Thursday, February 19, 2015

  Material suppliers are in a difficult place in the construction payment landscape. Compliance with lien and bond claim requirements in order to gain the protection of security is difficult and full of challenges, and the financial risk is high. Because material suppliers are at the bottom of the payment chain in the vast majority of construction projects, there are many potential places for money to get stuck.

• What to look out for in construction contracts

  Thursday, February 05, 2015

  Construction contracts are often lengthy and complicated documents. Despite the fact that these agreements form the foundation for the relationship between the signing parties, the fact that they are so voluminous means that they are rarely thoroughly examined. Since attorneys are expensive, and not every construction industry participant has in-house counsel, construction participants can help themselves by knowing some of the key things that they may wish to look out for.

• How a good lien strategy gets you paid

  Wednesday, January 21, 2015

  A thorough lien policy is one of the best ways to ensure payment. However, it's important to note that filing a lien is only one step in a lien policy, and it's a step that a successful lien policy will rarely use. In fact, in the larger scheme of lien strategy — as it relates to credit management and receivables policy — if the rest of a company's credit policy is working, most projects won't ever require a lien to be filed.

• Construction payment structure and risk simplified

  Wednesday, January 07, 2015

  Construction projects have an interesting and unique payment structure. The credit-heavy nature and the routine, but unfortunate, lack of visibility throughout a project make payment issues of paramount importance for parties at both the top and the bottom of the payment chain.

• Lien waivers: How technology can solve problems you didn’t know you had

  Tuesday, December 16, 2014

  Lien waivers are an integral part of construction projects in general, and good credit management in particular. Nearly every party furnishing labor or materials has the right to file a mechanics lien in the event of nonpayment, and the top-of-the-chain parties like the property owner and the GC are generally eager to obtain waivers to ensure the property does not become encumbered.

• Mechanics liens, bankruptcy and secured debt

  Friday, November 21, 2014

  Once a party files for bankruptcy protection, all of the creditors have the same question: Will I get paid? In order to determine the likelihood of a creditor receiving payment from a bankrupt debtor, one of the essential factors to consider is whether the debt is secured or unsecured.

• Construction companies should watch out for these 3 things

  Tuesday, November 18, 2014

  The construction industry is volatile, faces high failure rates and works on slim-to-virtually-nonexistent margins. While an increase in construction projects is generally good for companies in the industry, even that good news can hide dangers.

• Managing risk in the construction industry

  Thursday, October 30, 2014

  The construction industry is full of risks, from personal safety risks on construction sites, to financial risks and risks of business failure. Construction projects have several tiers, and every tier faces its own unique challenges and specific risks.

• Construction technology: The cloud and beyond

  Monday, October 13, 2014

  We use technology to improve or simplify our lives and jobs every day — no matter what job you have or what industry you are in. The only thing that changes is the exact technology you use. Despite the fact that everybody uses technology in some way, some industries lag far behind the curve in the adoption of certain technologies.

• Why don’t construction companies use security as a matter of policy?

  Wednesday, July 23, 2014

  Companies in the construction industry are lucky. They have the ability to secure extensions of labor and/or material on credit built directly into the law and without the need to get approval from any other party. If a party to a construction project wants to be completely secured on all extensions of credit, they must simply heed the rules set out by the laws of the project state.

• Construction laws slow to adjust to ‘green’ building

  Friday, May 02, 2014

  A rapidly-expanding segment of the construction industry is centered on "green" building projects, including the construction of green-energy installations such as solar arrays or wind farms. But mechanics lien and bond claim law has not necessarily kept pace.

• Pay-if-paid clauses: An attempt to shift the risk of nonpayment

  Tuesday, March 18, 2014

  Pay-when-paid and pay-if-paid clauses are pretty common in the construction industry. So what do they actually do, how effective are they, and how did they come about? This article will attempt to provide some answers to those questions.

• Protecting your receivables by sending preliminary notice

  Thursday, February 13, 2014

  ​Credit management professionals know that finding some way to secure an extension of credit goes a long way to ensuring payment. A company that routinely secures its receivables is better able to make credit decisions and is able to feel more secure in its extensions of credit.

• The construction professional’s checklist to begin 2014

  Tuesday, January 07, 2014

  The new year has arrived, and that means it's time for companies to make resolutions to get paid more often and write off less bad debt in 2014. To accomplish this goal, a company should take stock of its receivables, reevaluate (or create) its credit policy, analyze its average DSO and grade its collection efforts.

• Drafting a written collections policy is good for business

  Tuesday, December 10, 2013

  ​While sometimes overlooked — or just noticed but ignored — a strong collection policy is an important piece of a complete and thorough credit policy. A well-conceived collection policy, coupled with a detailed lien policy, will save a business much of the time and expense taken up by the litigation that sometimes seems necessary to get paid.

• Notice policy is key to protecting lien rights

  Thursday, November 07, 2013

  Making sure your company complies with all of the various notice requirements is a difficult, time-consuming, frustrating and a seemingly impossible task. This is especially true when projects are located throughout many different states with many different rules.

• Credit application can be the first step in getting you paid

  Wednesday, October 23, 2013

  ​A thorough credit application is an integral part of any company's credit management policy, including companies in the construction industry. Credit applications aren't sexy to look at, but when specifically tailored to fit within the framework of your credit policy as a whole, they can greatly improve your payment funnel and increase profits.

• Mechanics liens provide protection against contractor bankruptcy

  Tuesday, October 08, 2013

  Unfortunately, the failure rate of businesses in the construction industry is high. This means that the bankruptcy or pending bankruptcy of a general contractor is a more common reason for payment problems than people may realize. Fortunately, for a financially troubled general contractor, mechanics liens may provide some protection.