A construction lien, also called a mechanic’s lien, is a legal claim filed against a property by a contractor, subcontractor, or supplier who hasn’t been paid for work or materials provided.
Unpaid subcontractors use liens as leverage to secure payment.
What Does a Construction Lien Affect?
- The property’s title
- The ability to sell or refinance
- The homeowner’s legal exposure, even after paying the GC
- Resolution timelines for closing a sale
Why Are Construction Liens Important?
A subcontractor who completes electrical work but isn’t paid by a general contractor can file a lien directly against the homeowner’s property, even if the homeowner already paid the GC in full. The claim can cloud a property’s title, complicating a sale or refinance until it’s resolved.
Construction Lien vs. Lien Waiver
A construction lien is the legal claim itself, filed when payment isn’t received. A lien waiver is the document a contractor or supplier signs giving up that right, typically provided once payment is confirmed.