Mechanics Liens

A mechanics lien is primarily used in the construction industry to ensure subcontractors that they will be paid for the work they complete. It operates when a subcontractor places a lien on the owner's property as materials and labor are supplied. The owner receives a lien release at time of payment.  The mechanics lien is a form of security for payment of a debt, and is similar in function to a mortgage or deed of trust. The purpose is to ensure that a contractor or material supplier who has contributed to the value of an owner's property by furnishing work or materials is paid for their work.

Mechanics liens protect providers of goods and services where the providers have no contractual right to look to the owner for payment. They are governed by specific statutory provisions in each of the states, and are often complex and technical.

(Source: Manual of Credit and Commercial Laws, edited by Charles M. Tatelbaum and John K. Pearson)

Visit the C.L.A.I.M.S. website to consult their database of lien laws by state.