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4 FAQ about mechanic’s liens

On Behalf of | Oct 9, 2023 | Construction Law

When you are in the construction business, ensuring you get paid for your hard work and materials is important for maintaining a sustainable operation.

Whether a contractor, subcontractor or supplier, knowing the ins and outs of a mechanic’s lien can be a valuable asset in your business endeavors.

1. What is a mechanic’s lien?

A mechanic’s lien is a legal claim that construction professionals, such as contractors and subcontractors, can place on a property to secure payment for their work or materials. It provides them with a legal interest in the property until they receive the compensation owed.

2. When can you file a mechanic’s lien?

You can file a mechanic’s lien after providing labor, services or materials for a construction project, and you did not receive full payment for your work. During the COVID-19 pandemic, which greatly impacted the industry, contractors seeking a mechanic’s lien rose 40%.

3. What happens after filing a mechanic’s lien?

After filing a mechanic’s lien, the property owner or other involved parties have a limited time to respond or challenge the lien. If they do not take action to resolve the matter, the lien can lead to a foreclosure on the property, which may result in the sale of the property to satisfy the debt owed.

4. Can you remove a mechanic’s lien?

Under certain circumstances, you can release a mechanic’s lien. Typically, this happens after receiving full payment, the lien expires or if there are legal disputes settled in favor of the property owner. Once removed, the lien no longer encumbers the property.

While a mechanic’s lien is a powerful tool for contractors and suppliers to protect their financial interests, navigating the process comes with complexities and nuances.