Mechanic’s lien
In the United States, a mechanic’s lien is a legal guarantee that ensures payment for labour or materials that have been supplied to improve property. Originally developed in relation to motor vehicles, mechanics were allowed to place a lien on the vehicles title if they were not paid for repair works.
However, the use of liens has subsequently widened and they are now sometimes referred to as construction liens, property liens, materialman's liens, supplier's liens and so on, and they are filed when payment has not been received for work done or goods or services provided.
In relation to property, liens appear in public property records and ‘travel with the land’, meaning that when property is bought and sold the lien is still attached to the land. This can make it difficult for property owners to complete a sale, if money is still owed to a contractor, and banks and lenders may be unwilling to refinance or lend against properties with liens attached. This can give property owners the incentive to have the issue settled and the lien removed.
Subcontractors and suppliers can also use liens as leverage to obtain payment from contractors. This can help, for example, in the event of the contractor going into liquidation.
The rules applying to costs that can be included in a lien vary from state to state, but generally, only costs relating to labour, goods and services that have improved the property are accepted. It is not usually possible for legal fees, punitive or qualitative damages to be included in the lien as these are not classed as having improved the property.
The claimant must file a court action to enforce the lien within an specified period of time, otherwise it becomes invalid. A Release of Lien can be sought from the lien holder if they have not brought an action, since this still has the potential of hindering the passing on of the property to a new owner.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
Art of Building CIOB photographic competition public vote
The last week to vote for a winner until 10 January 2025.
The future of the Grenfell Tower site
Principles, promises, recommendations and a decision expected in February 2025.
20 years of the Chartered Environmentalist
If not now, when?
Journeys in Industrious England
Thomas Baskerville’s expeditions in the 1600s.
Top 25 Building Safety Wiki articles of 2024
Take a look what most people have been reading about.
Life and death at Highgate Cemetery
Balancing burials and tourism.
The 25 most read articles on DB for 2024
Design portion to procurement route and all between.
The act of preservation may sometimes be futile.
Twas the site before Christmas...
A rhyme for the industry and a thankyou to our supporters.
Plumbing and heating systems in schools
New apprentice pay rates coming into effect in the new year
Addressing the impact of recent national minimum wage changes.
EBSSA support for the new industry competence structure
The Engineering and Building Services Skills Authority, in working group 2.
Notes from BSRIA Sustainable Futures briefing
From carbon down to the all important customer: Redefining Retrofit for Net Zero Living.
Principal Designer: A New Opportunity for Architects
ACA launches a Principal Designer Register for architects.