If you’ve spent any amount of time being involved in construction work, then you’ve most likely heard the term mechanic’s lien. It is also called contractor’s lien or construction lien, depending on where you live. What is it, and how can it affect you? The best way to learn about this sort of stuff is to talk to a business lawyer, but you can have a basic understanding of it here.

Mechanic’s lien

A mechanic’s lien is a sort of protection against customers who refuse to pay their contractors after the work is already done. This includes both the complete payment for the project as a whole or partial payment for one of the tasks within that payment.

Look at it this way. Let’s say a person hires a contractor for a concrete driveway. The contractor fulfills the project in due time and does an as-advertised job. But now, the person who hired the contractor is refusing to pay for no apparent reason.

The contractor in this situation can sue the person for a breach of contract and will most likely get their money. But lawsuits can last a long time, and until the court orders the homeowner to pay, they aren’t getting repercussions for their actions.

This is where the mechanic’s lien comes into play. You can think of it as a public stamp on that property. An unpaid lien is visible to everyone on the public property records. This ensures that no one is willing to buy the house, and no bank is willing to give a loan on the basis of this house.

Things that are included in the mechanic’s lien

There are obviously boundaries set by the law to which type of items/services can and cannot be included in the lien. The exact specifications can vary from state to state, but there is some general overlap. For example, a contractor can include their labor, equipment, and material that was used to improve the property.

Now the definition of what improving a property means is a bit vague, but it should be sufficient enough to bring justice. Each state also has laws regarding many details like the time window in which a contractor can file the lien or the format for the lien. Talking to California Business Attorneys Nakase Wade can give you a clearer picture of the whole situation.