Also sometimes referred to as a Construction Lien

The idea that people who build things need to get paid for the work they do is as old the USA. Back in the day construction workers were called mechanics and around the time when our capital building was being built, they were a little nervous about working for a brand-new government without getting paid upfront. Benjamin Franklin assured the mechanics if the United States government was unable to pay for the work they did, they would have an interest in the property where the work was performed. Taking into consideration if things went completely south, the mechanics would be paid out of the sale of that property.

How Does a Construction Lien Work?

The idea that all construction workers should be paid for the work that they perform is the basis for lien rights. A lien gives the construction worker and/or material supplier a security interest in the property they are improving with their labor and material. This means if the proper steps are followed to create a valid lien, the construction work and/or material supplier becomes a secured creditor, just like a mortgage company. If a construction worker and/or material supplier does not perfect their lien right they are an unsecured creditor, meaning they can go after who hired them for non-payment and sue for breach of contract. Having a lien means you sue the owner to foreclose on that lien with the ultimate remedy of selling the property to pay the amount you are owed.

How to Lien a Construction Project?

The first place to start is understanding the lien laws of your state, what steps you need to take to have a valid lien in order to become a secured creditor. I have studied the lien laws in all 50 states; they are all different. I will be writing blogs on how to prefect your lien rights in all 50 states