Can A Contractor File A Lien Against Your House?

  • 2 min read

What is a Mechanics Lien?
In the building and contracting industry, there is a process called a mechanics lien or a builder’s lien that most states have in their statutes. It allows contractors or builders to place a lien on a property if they haven’t been paid for their work.

How Mechanical Liens Work
Contractors are automatically entitled to a lien against a property until they receive payment. This applies even if the property is sold after the work is completed. Material suppliers and equipment providers may also be covered under mechanics liens.

Protecting yourself as a client
To protect yourself as a client, ensure you obtain lien waivers from all subcontractors. Without these waivers, subcontractors could file liens against your property, even if you’ve paid the general contractor in full.

Understanding Disclosures and Rights
Most states require licensed general contractors to provide disclosures to clients at the start of a project. These disclosures inform clients about their rights and potential risks, including the possibility of mechanics liens.

Additional Protections and Considerations
Clients can take additional steps to safeguard their interests, such as ensuring the contractor is licensed and has appropriate insurance coverage. Surety bonds can provide added protection against non-payment or incomplete work.

The Importance of a Notice of Commencement
In states like Florida, contractors are required to file a Notice of Commencement before beginning work on a property. This document serves as a public notice of ongoing construction and provides additional protections for both contractors and property owners.

The Role of Surety Bonds
Surety bonds can serve as backup protection against non-payment or incomplete work. While it may not directly benefit the contractor, it offers peace of mind for property owners and ensures financial recourse in case of disputes.

Understanding mechanics liens, contractor protections, and the role of surety bonds is essential for both clients and contractors in the construction industry. By being aware of these processes and taking necessary precautions, individuals can mitigate risks and ensure successful outcomes for their building projects.

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