What is a Mechanics’ Lien?

A mechanics’ lien is a legal tool that contractors, subcontractors, and suppliers can use to create a notice that there is a claim against a property related to construction of the improvements to the property. Mechanics’ liens help to secure payment of an outstanding debt. The lien acts as a cloud on the title and can interfere with the owner’s ability to sell, finance, or refinance the property. Typically, the expectation is that the filing of a lien will motivate the owner to settle the debt, if the debtor is the owner, or exert pressure on the contractor to settle the debt if the debtor is a contractor who was hired by the owner. The effectiveness of the lien varies greatly depending on the relationship of the parties and the owner’s objectives.