Construction Lien (Mechanic's Lien)
A legal claim against the improved property that secures payment for unpaid work.
Quick Answer
A construction lien, also called a mechanic's lien, is a legal claim against real property filed by a contractor, subcontractor, or supplier who was not paid for work or materials that improved it. It clouds the owner's title and can ultimately force a sale. Lien rights are created by state statute and require strict notice and filing deadlines.
The Full Picture
Construction liens exist because the people who improve a property are often not in contract with its owner. A sub-tier supplier may have no way to sue the owner directly, so state laws give unpaid parties a security interest in the property itself. That gives every tier of the payment chain leverage to get paid.
Mechanically, lien rights are defined state by state. Many states require a preliminary notice early in the job, then a lien filing within a set number of days after the claimant's last work or project completion, followed by a lawsuit to foreclose the lien within another deadline. Miss a step and the lien right is usually lost. Public property generally cannot be liened, so the federal Miller Act and state Little Miller Acts require payment bonds on public work instead.
In practice, liens are managed through lien waivers exchanged with each payment. Conditional waivers release lien rights once a specific payment clears; unconditional waivers release them immediately. Owners and lenders require waivers from the GC and often from subcontractors and major suppliers before releasing funds.
In preconstruction, lien exposure shapes payment terms and subcontractor selection. A GC evaluating a private owner's financing, or a subcontractor with a history of paying its suppliers late, is assessing lien risk. Payment bonds, joint checks, and lien waiver requirements written into the subcontract are the usual controls.
Real Examples
Common Misconceptions
People assume: Anyone who is unpaid can file a lien at any time.
Actually: Lien rights are strictly statutory. Claimants often must send preliminary notices and file within tight deadlines, and missing them usually forfeits the right.
People assume: Paying the GC in full protects the owner from subcontractor liens.
Actually: In many states, unpaid subs and suppliers can still lien the property even if the owner paid the GC, which is why owners collect lien waivers from lower tiers.
Frequently Asked Questions
Who can file a mechanic's lien?
Depending on the state, general contractors, subcontractors, sub-subcontractors, suppliers, equipment lessors, and sometimes design professionals who improved the property and were not paid. Each state defines who qualifies and how far down the chain rights extend.
What is the difference between a lien and a lien waiver?
A lien is a claim against property securing an unpaid amount. A lien waiver is a document in which the claimant gives up lien rights, usually in exchange for a specific payment.
Can you put a lien on a public project?
Generally no. Public property is not subject to mechanic's liens, so federal and state laws require prime contractors to post payment bonds that unpaid subs and suppliers can claim against.
How long do you have to file a construction lien?
It varies by state and by the claimant's role, and deadlines are often counted from last furnishing or project completion. Because missing a deadline usually forfeits the right, claimants track them from the start of work.
How do construction liens affect preconstruction?
They influence payment terms, bonding requirements, joint-check arrangements, and subcontractor selection. A GC assessing an owner's financing or a sub's payment history is managing lien risk before the contract is signed.