What’s the importance of a mechanic’s lien?

| Oct 19, 2019 | business & civil litigation

If you’ve heard the terminology “mechanic’s lien” before, then you may have assumed that it has to do with cars. You shouldn’t let the name fool you though. This type of legal claim is most often applied to homes. Suppliers or subcontractors will often file a mechanic’s lien against a property to make sure that they ultimately get paid for their products or labors that they’ve invested in either improving or remodeling real estate.

Most homeowners who desire to move forward with a remodeling project sign a contract with a general contractor. It’s commonplace for contractors to solicit others that may have specialized skills in plumbing or electric work to perform certain aspects of the job themselves. They may also purchase building materials from others. In both cases, they may promise to pay them once the project is complete.

If a general contractor fails to pay anyone that they’ve had perform services or supply materials to them, then both parties may be eligible to come after the homeowner for what they’re due. A homeowner who has already paid a contractor for these services may easily end up paying double for them to ultimately have the lien removed.

A mechanic’s lien will generally remain on a property as long as it’s not paid off. If a homeowner attempts to sell a home that has a lien attached to it, then they’ll have to use any proceeds from the sale to satisfy it at closing. If there aren’t any profits, then the homeowner would need to come out-of-pocket to pay it themselves. It may be possible to convey the deed of the home with the lien attached to it as well.

If you are a contractor here in Statesville then you must be aware of how mechanic’s liens work. This is an important item in your business operation toolbox that can help you make sure that you get paid what you’re due when you’re slighted by a general contractor.

An attorney can advise you of when you should place a mechanic’s lien on a property and when alternatives may be most appropriate in your situation here in North Carolina.