Finance Classic - Financial News

Construction lien is a security interest in the title to property for the benefit of those people who have supplied their labor or materials that improve the property. Construction lien is called by different names like mechanic’s lien, material man’s lien. It is termed as supplier’s lien when people supplying materials are referred. It is termed as laborer’s lien when people supplying labor are referred. It is also known as design professional’s lien when architects or designers who contribute to a work of improvement are referred.

Construction liens exist in every state with respect to the real property. The reason of its existence is because of a legislative public policy to protect the contractors. According to the state legislatures, contractors and sub contractors need a greater remedy for non payment for their work rather than having the rights to sue on their contracts. Without the construction lien, the contractor would have a limited option to enforce payments of the amount owed.

Construction liens exist to secure the payment for services, labor and material on both personal and real property. The law of construction liens on real property governs the creation and enforcement of these liens on items of personal property that are attached to the real property as fixture.