With spring just around the corner, many professionals in the construction industry are preparing for the seasonal increase in work that tends to happen at this time of year. Homeowners generally undertake a greater number of renovation or new construction projects in the spring and summer which can be great for business so long as they pay their bills.
When a customer fails to pay a contractor invoice per the contract as agreed upon, the vendor must decide how to proceed. One option available to contractors is called a mechanics lien. As explained by Construction Executive magazine, a mechanics lien in and of itself does not generate payment but creates a situation in which a property owner is strongly requested and even potentially required to pay a bill.
The lien essentially prevents the property owner from selling the property or even refinancing the loan on the property until the debt associated with the lien is paid. Once an account is paid, the contractor may remove the lien and the owner may proceed with whatever action on their property they wish.
A mechanics lien attaches to all structures as well as the actual land on a property. Any professional who provides a service, materials or labor for a construction project on the property may utilize a mechanics lien as a collection method. Every state has unique laws regarding the process for obtaining a mechanics lien, but the process generally includes several key deadlines to which strict adherence is required. Any failure to take the proper action in the identified timeframe may prevent a contractor from benefitting from a mechanics lien.