Definition
A mechanic's lien is a legal claim recorded by a contractor, subcontractor, or supplier who performed work or provided materials for a property but was never paid for it. It attaches directly to the house itself rather than to the person who hired the contractor, meaning it can follow the property even if you weren't the one who failed to pay. It has to be cleared, whether by payment, release, or bond, before you can convey clear title to a buyer. Strict deadlines for filing and enforcing a mechanic's lien are set by state law, so homeowners dealing with unpaid contractor disputes should move quickly to understand their options.
Example
When Ben's general contractor failed to pay one of his subcontractors, that subcontractor recorded a $7,300 mechanic's lien against Ben's property even though Ben had already paid the general contractor in full for the job. The lien surfaced during the title search when Ben went to sell, catching him completely off guard months after the work was finished. His real estate attorney negotiated the payoff amount with the subcontractor directly, ultimately reaching a settlement lower than the original lien amount filed. Both sides agreed the funds would be held back at closing rather than delaying the sale further. Funds were held back from Ben's proceeds at closing to settle the dispute, and the sale went through once the lien was released. Ben said he now asks every contractor for lien waivers with every payment, no matter how much he trusts them.