Definition
A mechanic's lien secures payment for construction work performed by contractors, subcontractors, or suppliers who weren't paid. Mechanic's liens often have priority over the primary mortgage, making them especially powerful collection tools.
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Mechanic's liens give construction professionals powerful collection tools. Unlike other liens, mechanic's liens often have priority over the property owner's primary mortgage, making them especially valuable. They must be filed within specific timeframes (varies by state) and follow strict notice requirements. Property owners must ensure all contractors and suppliers are paid to clear mechanic's liens before sale or financing.
Pro Tip
Ensure all contractors and suppliers are paid before closing to avoid mechanic's liens clouding title.
Example
A contractor performs roof repairs but isn't paid; they file a mechanic's lien to secure payment from the property value.