How Our System Works
Oak Covenant’s Construction Payment System was created to reduce the mistrust and confusion that often occurs on residential projects when contractors and lienors attempt to protect themselves through the use of lien procedures.
A homeowner is generally unfamiliar with the lien law. Statutory notices warning of foreclosure of an owner’s property are, by design, alarming and concerning. An owner attempting to inform themselves on lien law will find themselves in a labyrinth of tracking subcontracts and Notice to Owners, attempting to determine subcontractor costs, reviewing payment applications and releases and finally processing and disbursing payments. The complexity results in many owners becoming apprehensive about payments and distrustful of their contractor’s intentions.
As with most relationships, trust is a key component of a successful construction project. Oak Covenant’s Construction Payment System is intended to protect and foster that trust.
Oak Covenant’s Payment System is not a replacement for lien law compliance. Stated differently, notifying Oak Covenant that you are on a project is not a substitute for the proper service of statutorily required notice. However, the use of Oak Covenant’s Payment System provides transparency and common sense to the payment process with the intention of eliminating the need to resort to the lien process. In the unlikely event the lien process is ultimately required, the payment process is well documented with the aim of dramatically reducing the legal costs associated with the lien process.
Oak Covenant’s Payment System was not created to favor any party over another.
- It benefits Owners by bringing clarity to payment requests and assurances that lienors are being paid.
- It benefits contractors by reducing payment conflicts with both owners and lienors.
- It benefits lienors by informing owners if the lienor is not being paid.
- Most of all, it benefits everyone by reducing the chance the project will end up in lien litigation in which only the construction attorneys win.
Oak Covenant serves as a central hub for payment. Oak Covenant is not a law firm and does not offer legal advice. To utilize oak Covenant on your project, please complete the Oak Covenant Construction Addendum and email the fully executed form along with the oak Covenant Notice of Commencement form to Projects@OakCovenant.com.