Mechanic’s Lien
Definition
A mechanic’s lien is a security interest in the title to property for the benefit of those who have supplied labor or materials that improve the property. This lien is a way to secure payment for work performed or materials supplied if the property owner fails to pay. A mechanic’s lien attaches to the real property and stays with it until the debt is paid or the lien is discharged.
Example
An unpaid contractor might file a mechanic’s lien against a homeowner’s property where renovation work was completed. This lien must be resolved, often requiring the homeowner to settle the claim before a clear title can be handed over in the closing of a property sale.
Examples
- Construction Projects: A general contractor may file a mechanic’s lien against a property owner who fails to pay for the construction of a new addition to their home.
- Renovation Work: A kitchen remodeling company files a lien when the homeowner disputes the final payment for completed work.
- Subcontractors: An electrician employed by the primary contractor places a mechanic’s lien since they were not paid after completing their electrical work.
Frequently Asked Questions
Q: Who can file a mechanic’s lien? A: Any contractor, subcontractor, or material supplier who has performed work or supplied materials for property improvement can file a mechanic’s lien.
Q: How long does a mechanic’s lien stay on a property? A: The duration can vary by jurisdiction, but many states allow a mechanic’s lien to remain enforceable for six months to a year from the date of filing. It must often be enforced within a specific period through a court action, or it will expire.
Q: Can a homeowner remove a mechanic’s lien? A: A mechanic’s lien can be removed by paying the debt owed, disputing the lien in court, or through a waiver by the lienholder.
Q: Do mechanic’s liens impact property sales? A: Yes, properties with active mechanic’s liens cannot typically be sold with a clear title until the lien is resolved.
Q: How does a mechanic’s lien affect a contractor? A: Filing a mechanic’s lien gives contractors legal leverage to receive payment for their labor or supplies. It also impacts their relationship with the client and other stakeholders.
Related Terms
- Lien: A legal right or interest that a creditor has in the debtor’s property, granted to ensure the payment of a debt.
- Clear Title: Ownership of property that is free of liens, judgments, or other legal claims.
- Subcontractor: An individual or business that signs a contract to perform part or all of the obligations of another’s contract.
- Materialman’s Lien: Another term for a mechanic’s lien, specifically emphasizes the claim for supplied materials.
- Construction Law: The body of law that deals with matters relating to building construction.
Online Resources
- National Association of Home Builders (NAHB): NAHB Website
- American Subcontractors Association, Inc. (ASA): ASA Website
- Construction Financial Management Association (CFMA): CFMA Website
References
- “Nolo’s Construction Law E-Book”, Noteed by Nolo.
- “Construction Law” by Julian Bailey.
Suggested Books
- “Construction Law Handbook” by William Allensworth, Ross Altman, and Doug Toohey.
- “A Practitioner’s Guide to Construction Law” by John Marshall Review.
- “Smith, Currie & Hancock’s Common Sense Construction Law: A Practical Guide for the Construction Professional” by Thomas J. Kelleher Jr., Matthew J. Ninneman, et al.
