A mechanic’s lien is a legal process that secures payment for contracted services rendered on a property. It extends to both the structure and the underlying ground, and until the debt is paid, the landowner has no clear title. Originally used by real mechanics, it eventually found its way into the construction world, where it guarantees payment for contractors and suppliers. It is not a quick cure for money problems, but it offers more legal protection than not filing one.
A mechanic’s lien is a legal process that seeks to secure payment for contracted services rendered on an improved piece of property. Depending on the laws of a particular location, contractors, subcontractors and suppliers may file for this lien within a certain period of time after work has been completed and payment has not been received. It extends to both the structure and the underlying ground. Until the debt is paid, the landowner has no clear title.
Originally, a mechanic’s privilege was sought almost exclusively by a real mechanic. If an automobile owner has contracted for repair services and hasn’t paid the bill, the mechanic may place a lien on the car’s title. This meant filing a complaint with a local magistrate’s office. Essentially, this meant that the car owner had to pay off the debt before title could be transferred cleanly to a third party. If the owner decides to pay the bill voluntarily, the privilege is revoked.
This practice eventually found its way into the construction world. For example, a property owner might be looking for a contractor to build an apartment complex. A project like this would require licensed subcontractors such as carpenters, masons, general laborers and landscapers. All these workers would need supplies from external suppliers.
The assumption is that the owner of the property ultimately pays the contractor, who in turn pays all the subcontractors, and so on. However, construction projects are often started and finished without such guarantees, which gives the property owner much greater leverage over the contractor. If the owner is unwilling to pay, it’s not like the workers can simply remove the building and sell it elsewhere.
It is this inequality during the procurement and construction phase that makes this type of collateral so attractive to contractors and suppliers. Instead of completing a project and hoping that the owner is a scrupulous businessman, the very threat of a lien can guarantee payment. In fact, many places require that any contractor or vendor must first give 20 days notice before pursuing an official mechanic’s lien. Some landlords may fear receiving this notice, but the contractor must present it in order to be eligible for the actual lien.
A mechanic’s lien isn’t a quick cure for money problems, but it offers more legal protection than not filing one. Some contractors see this as a last resort, since they usually want to establish a good working relationship with property owners whenever possible.
Protect your devices with Threat Protection by NordVPN
