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What Is A Mechanic's Lien?

A mechanic's lien, also known as a materialman's lien or a construction lien, is a mechanism whereby contractors involved in the process of making improvements to real estate secure payment for their services and materials.

In essence, a mechanic's lien affords a contractor the same type of security as that afforded to a lender with a mortgage lien on real property.

General Requirements for a Mechanic's Lien

A mechanic's lien extends to real property, as well as improvements. It is important to note, however, that a mechanic's lien does not extend to personal property. For example, a mechanic's lien cannot be obtained by a repair shop to secure payment for repairs to a lawnmower.

A contractor may obtain a mechanic's lien on real property only for improvements to the property or for materials provided in connection with improvements to the property. The mechanic's lien must attach to the property that is benefited by the improvements or supplies. In other words, a contractor may not obtain a mechanic's lien on one property for materials provided in connection with improvements or supplies provided to improve another property.

Practical Considerations

The laws governing mechanic's liens vary from state to state. Generally speaking, a contractor must serve the property owner with a notice of mechanic's lien. In addition, the contractor will record the mechanic's lien in the appropriate public office so that other parties will be put on notice of the existence of the mechanic's lien against the title of the real property at issue. In the event the property owner fails to pay the contractor for the services or supplies, the contract may initiate a legal proceeding to foreclose the lien.