Construction liens are a common legal concern associated with real property. Outside parties can potentially ask to treat real property as collateral for unpaid invoices. They can record their liens, preventing the owner from selling or transferring the property without paying the debt.
Also known as mechanics liens in other states, construction liens against real property often compel owners to pay what they owe to others. Construction liens can theoretically lead to foreclosure, which can deprive people of their properties.
Who has the right to ask for a construction lien under state statutes?
The law protects many parties
Construction liens exist to protect contractors and others who help erect, repair and modify edifices. They also protect suppliers, ranging from utility companies providing electricity to those delivering raw materials for a project. Anyone who has done active work on a construction project or provided materials for it may be able to pursue a construction lien.
Those parties do not necessarily need to have a direct arrangement with the property owner. If they have an agreement with the construction firm or professional hired by the owner, they may still be in a position to pursue a lien. A dispute between a construction company and an independent contractor might lead to a lien request if the company refuses to fully pay for the services rendered.
Liens can cause headaches for homeowners and can potentially damage the reputations of businesses that fail to pay suppliers and contractors in a timely fashion. As such, understanding the rules that govern construction liens and real estate litigation can be beneficial both for construction professionals and for those hiring others to do work on their properties.
