The “construction lien” goes by many names in the United States: Claim of Lien, Statement of Claim or Privilege, Mechanics Lien, and more. And while the name and technicalities are different from state-to-state, construction liens generally operate similarly across the nation.
So what exactly is a mechanic’s lien?
When you run a Google search for “Mechanic’s Lien” an entry from Wikipedia is the first result. According to the collective Wikipedia editors, a mechanic’s lien is “a security interest in the title to property for the benefit of those who have supplied labor or materials that improve the property.” Read the full Wikipedia entry here.
The entry goes on to state that liens exist to “protect the contractors.”
Here are some general theories to keep in mind when trying to understand construction or mechanics liens:
- In general, those who perform labor or supply materials on a construction project will have the right to lien the project;
- The method of filing a construction lien varies state-by-state;
- Your lien must be filed within a defined timeframe;
- If your lien does not produce payment, you will need to “perfect” or “foreclose” on your lien within a defined time period.
To learn more about your state’s requirements, click on your state’s name in our blog’s navigation. Or check out your state’s requirements at the following charts: