Significance

• Mechanic's liens are available to almost anyone who contributes labor, services, or materials to a real estate improvement project.
  
  

Considerations

• As a homeowner, you should only hire licensed contractors. You also should set up a payment schedule that specifies when the work will start and end and the price.
  
  

Effects

• A mechanic's lien can result in foreclosure if the homeowner doesn't it pay off. It also can make affect the homeowner's ability to refinance or sell the property.
  
  

Laws

• The laws regarding mechanic's liens can vary from state to state and county to county. The liens are recorded with the County Recorder's office. A preliminary 20 day notice is required from the subcontractor or supplier if there is a chance that they may need to file a lien.
  
  

Warning

• Liens can occur when the prime contractor has not paid subcontractors or suppliers. The homeowner is ultimately legally responsible for payment, even if the prime contractor has been paid.