What is a "contractor's lien"?

A "contractor's lien," often referred to as a mechanics lien or construction lien, is a legal claim that a contractor, subcontractor, or laborer can place against a property when they have not been compensated for work or materials provided on that property. This lien gives the contractor a legal right to seek payment by asserting their interest in the property.

In practical terms, when a contractor files a lien, it affects the owner's ability to sell or refinance the property until the debt is settled. Essentially, it serves to ensure that those who contribute labor or materials to improve a property are protected in their right to be paid, thereby enforcing fair business practices within the construction industry. This legal mechanism creates a strong incentive for property owners to honor their payment obligations.