ABOUT :  CONSTRUCTION LIENS

The term "lien" comes from the French root "liaison" (via William the Conqueror)

A construction lien is a hold on real property for the benefit of someone whose work or services improves the property. It is called by various names, including mechanic's lien, materialman's lien, supplier's lien, laborer's lien and others. Through "perfecting" a lien, an owner's title to a property suffers an interference that will have to be addressed before that owner can restore a clear title. Generally, a lien will arise if there is a construction-related payment dispute. Since real property ownership is mostly a function of state law, establishing a construction lien is mostly a process governed by state law, in particular a lien statute. The process for perfecting a lien varies significantly from state to state. Some states (e.g. Oregon and Washington) require pre-lien notices to be sent at the beginning of a project to the owner and other entities involved in the construction project. Perfecting a construction lien also necessitates drafting and filing documents with the government office that records deeds and titles to land.

The type of contribution that counts as a valid basis for a construction lien is also variable. The core purpose is to protect the benefit that a worker provides, such as time and labor. However, other types of contributions are less direct - the contribution of a supply company that delivers materials, or a company that rents equipment. Determining whether a party has a legitimate lien right may depend on examining other lien cases that have been upheld or rejected.

While a construction lien benefits the construction worker, there are also protections in place for the property owner. A strictly constrained process must be followed and failure to do that may invalidate lien rights.  These processes are intended to prevent disputes from occurring by providing the owner an opportunity to ensure a project's finances are being properly managed.

Property owned by the US federal government is ordinarily not subject to the claims of private parties. To protect contractors and suppliers working on US federal government construction projects where the contract price exceeds $100,000.00, the Miller Act (40 U.S. Code 3131) requires general contractors to give a surety bond which guarantees payment for work done in accordance with the terms of the contract.