Mechanic’s Lien protects contractors who work on a property. It guarantees that they will be compensated for their work, and allows them to go to court if time has passed without receiving payment. The deadline for payment and the degree of compensation they can obtain varies according to the laws of the state.
Though the word mechanic immediately makes one think of a car technician, this legal process actually applies to contractors, subcontractors and suppliers. The lien can be applied to work done on both the building or structure as well as the land. However, the law was first applied to actual mechanics (hence the name) and their right to file a claim at the local magistrate if they were not paid for repairs on a car. While the claim was being processed, or the owner pays off the bill, the car could not be sold to another party. The same principle applies to any land or structure that is under question—whether it be money owed to the construction company, the licensed subcontractors like carpenters or general laborers, or to suppliers of materials like wood or fixtures.
The mechanic’s lien is particularly useful considering that many construction projects should be completed before the builders or suppliers can receive full payment. Many of them will have out of pocket costs or reimbursements. Without the mechanic’s lien, they are at the mercy of the property owner, who can withhold or delay payment. But with this legal guarantee they can at least bring the matter to court—though for many, the threat of a mechanic’s lien is enough to expedite payment.