Definition
This lien is filed by contractors or suppliers who haven't been paid for work or materials. Mechanic's liens can prevent property transfer until debts are paid.
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Mechanic's liens (also called construction liens) protect contractors and workers by allowing them to claim a lien on the property if not paid for their work. These liens can be filed during or after construction and take priority over the mortgage lien in some states. A mechanic's lien can prevent property transfer until the debt is satisfied. To avoid mechanic's liens, property owners should ensure all contractors and suppliers are paid and should require lien waivers before final payment.
Pro Tip
Require lien waivers from all contractors before final payment.
Example
The contractor filed a mechanic's lien when the homeowner failed to pay for renovations.