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What is a mechanic's lien?

By David Pilley on April 20, 2011

mechanic-(1).jpgIf you have hired an outside party to do work on your home or on your property, a payment plan might be the last thing you think about. However, getting work done from an artisan can end up seeming like taking out another line of credit. If you can’t pay the outside party for his/her work, not only are you in debt, but the person can legally take hold of your property.

A mechanic’s lien goes by many other names. It can also be called a construction lien, supplier’s lien, laborer’s lien, or artisan’s lien, but the multiple names all mean the same thing. It is a security interest on the title of your home someone who has provided labor to improve your home can take if he/she has not been paid for the labor. The mechanic’s lien is not a new idea. In fact, the idea was first used in the late 1700s by Thomas Jefferson, for the construction of Washington, DC.

The mechanic’s lien is a source of protection for the worker. Anybody who has done work on your home can get a lien on your property. Carpenters, electricians, plumbers, and civil engineers are just a few of the names. If they have done work on your home or property and you have not paid them for their services, they have a right to take out a lien. (Mechanic’s liens are even a constitutional right in the state of California.)

However, getting a mechanic’s lien isn’t as simple as just saying “I did work on your home, and I haven’t been paid, so now I own your home.” Most states require a 20-day notice before a lien can be pursued. The worker must have also completed a notice of commencement, a legal document showing that he/she did work on your home and/or property. The enforcement of a mechanic’s lien is through the judicial system, and this could mean months of documents and court appearances. During these few months, you might be able to gather up the amount of money to adequately repay the laborer, therefore avoiding a seizure of your home.

Most often, a mechanic’s lien is pursued against your vehicle. If a mechanic has repaired your car and you haven’t paid him/her for it, the mechanic can take action to sell your car and get recompensed for his/her work. More often than not, work on your home will not even be close in costing as much as the value of your entire property. With a mechanic’s lien on your home, it is more likely that goods within your home, such as electronics or furniture, can be taken and sold for compensation.

Whenever you hire someone to do work on your home, make sure you both can agree on a payment plan for services, and make sure you can handle it. If this doesn’t happen, you could be very sorry.
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