Mechanics lien

A mechanics lien is a hold on real property for the benefit of someone whose work or property improves the property. It is called by various names, including materialman's lien, supplier's lien, laborer's lien and others. Through "perfecting " a lien, the technical term for establishing a mechanics lien, the owner's title to the property suffers an interference that will have to be addressed before the owner can restore clear title. Generally, a lien would only arise if there is a payment dispute, although some states (e.g. California) require pre-lien notices at the beginning of a project. Since real property ownership is mostly a function of state law, establishing a mechanics lien is mostly a process governed by state law, in particular a mechanics lien statute. The process for perfecting a mechanics lien varies significantly from state to state. However, common parts of the process of perfecting a mechanics lien include notice to the owner and to other persons or entities involved in the construction project, and also the drafting and filing of a document with the government office that records deeds or titles to land.

Mechanics liens are also sometimes known as contractors liens and construction liens. Historically, the term "mechanic" once referred to any person who peformed skilled labor, not limited to current usage that assumes a machine to be the subject of that work. Thus, at the time the phrase "mechanics lien" was invented, the understanding was that such a person might be a carpenter, plumber, or the like. Because of the change in the meaning of the word "mechanic," some states have changed the statutes to have a "mechanics lien" for people who work on cars and the like, and a separate "construction lien" statute to deal with construction-related payment disputes. The term "lien" comes from the French root (via William the Conqueror), with a meaning similar to link; it is related to "liaison."

What type of contribution counts as a valid basis for a mechanics lien is also variable. The core purpose is protecting the benefit that a worker provides, such as the time and effort a carpenter puts into nailing the boards together on the job site, and thus is included in the scope of most liens. However, other types of contributions are less direct - the contribution of an architect, or the supply company that delivers materials, or a company that rents the backhoe to the contractor, or the company that rents the port-a-pots to the contractor, or the truck that brings food to the workers at lunchtime. There is no simple dividing line that is useful in every state, or even in every case. Often, determining whether a party has a legitimate lien right depends on examining other cases that have either upheld or rejected lien claims in the same state.

Mechanics liens are a reaction to the imbalance of power between a worker at a construction site, and an owner of that land. The worker makes the time and effort investment on the assumption that the owner will pay, but until the owner does pay, the owner is in a significantly superior power position. The improvements have already been made, and it will not significantly benefit the worker to demolish the work. Thus, unscrupulous owners could simply lock the tradesman out of the property, retain the benefit, and refuse to pay. Additionally, as a society we benefit by having improvements to buildings, and knocking them down as a resolution to disputes is economically inefficient. Because of the difficulties inherent in contract suits, most clearly time and cost, states decided to provide a simpler procedure for putting pressure on an owner to pay a claim, short of executing a judgment.

While the mechanics lien is overall a benefit to the worker, there are protections in the process for the owner. Generally, the worker must follow a strictly constrained process, and failure to follow that process will invalidate the lien. Some parts of that process are intended to prevent disputes from occurring, such as a structure of mandatory notices and disclosures that provide the owner an opportunity to ensure that the project's finances are being properly managed, in addition to being able to monitor the physical progress of the work.

Property of the government is ordinarily not subject to the claims of private parties, and a purported mechanic's lien against government land is generally void. To protect subcontractors and suppliers of US federal government construction projects where the contract price exceeds $100,000.00, the Miller Act (40 U.S. Code 3131) requires general contractors to give a surety bond which guarantees payment for work done in accordance with the terms of the contract. Many state and municipal governments also require contractors on public works projects to be bonded.

Mechanics, Mechanic's, Mechanics' - From a grammar standpoint, use of the apostrophe is variable in legal proceedings, and the elimination of it matches some states' usage.

See also

• list of construction topics
• list of real estate topics

External link

• Illinois Mechanics Liens
• Mortgage Advice and Tips
• Machanics Lien Help