Mechanic's Liens

In real estate and personal property law, a mechanic's lien is used as interest of security for any person who has worked on or provided materials for work on a property. Sometimes called a construction lien, a mechanic's liens have existed in the real estate history of the United States since the 1700s when Thomas Jefferson was looking for ways to encourage building efforts in the nation's new capitol city of Washington. The general assembly of Washington established mechanic's liens in an attempt to protect contractors and suppliers from default of payment by the property owner.

Without a mechanic's lien, contractors have only a few remedies at their disposable to collect debts owed to them and often there are several other creditors who are owed money as well. Because of this, there are statutory regulations about strict compliance with the formal lien process so that the owner and all claimants can be satisfied with the resulting action. California and Texas are the only states within the United States that have adopted mechanic's liens as part of their Constitution, granting builders in Texas and all contractors in California the guaranteed right to place a lien on a property in the event of non-payment.

Mechanic's liens in relation to real property are somewhat different in nature to mechanic's liens on personal property. In order to place a mechanic's lien on real estate or real property, the work on the property must have been attached to the property as to be deemed a fixture to the property. A fixture is legally defined as physical property that has been permanently affixed to real property. For example, a stack of lumber in the backyard of a homeowner is chattel property that has yet to be converted into a fixture. Once that lumber has been used to build a deck or a fence, the lumber becomes a fixture of the property.

Every state within the U.S. has created individual legislation about the enforcement of mechanic's liens, but there are several similarities between them all. For instance, private parties cannot place mechanic's liens upon state or city properties. They also cannot be used for projects of federal construction. To protect contractors working on government construction jobs, contractors are typically required to put up a payment bond, which is essentially a contract that states payment is guaranteed as long as the work is done according to contract terms. The standard type of contribution that all states seem to recognize are contractors, supply houses, architects and engineers, but each case can be different and may deem other types of contribution valid.