United States
Hong KongMechanics liens explained
A mechanics lien is a claim against the improved property securing payment for labor and materials. Deadlines for preliminary notice, filing and enforcement are set by each state and are strictly applied.
The most powerful collection tool a contractor has, and the easiest to lose through a missed date.
What it is
A claim against the property itself, not just against the person who owes you money. It attaches to the improved real estate and can force a sale.
The justification is that your labor and materials increased the property's value, so the property should stand behind the debt.
The deadlines
Set by each state, and there are typically three: a preliminary notice near the start of work, a filing deadline after completion or last work, and an enforcement deadline after filing.
Miss the preliminary notice in a state that requires one and you may have no lien rights at all, however much you are owed and however clearly. This is why the exam treats lien deadlines as a knowledge item worth having.
Who has lien rights
Generally anyone furnishing labor or materials that improve the property: general contractors, subcontractors, suppliers and often design professionals.
A supplier to a supplier is usually too remote. Each state draws the line differently.
Public property
Generally cannot be liened. That is why payment bonds are required on public work - the bond replaces the lien as the subcontractor's protection.
A question describing an unpaid subcontractor on a public job is asking about the payment bond, not the lien.
Waivers
Lien rights are commonly waived progressively as payment is made. Conditional waivers take effect on payment clearing; unconditional ones take effect immediately.
Check your state
Every deadline in this area is state law. The exam tests the concepts; your state board and your attorney govern the dates.
Common questions
What is a mechanics lien?
A claim against the improved property securing payment for labor and materials furnished to it.
What are the deadlines?
Set by each state, typically a preliminary notice, a filing deadline and an enforcement deadline. They are strictly applied.
Can you lien public property?
Generally no, which is why payment bonds are required on public work.
Who has lien rights?
Generally those furnishing labor or materials improving the property, though states draw the line at different degrees of remoteness.
What happens if I miss the preliminary notice?
In states that require one, you may lose lien rights entirely regardless of how much you are owed.