What Is a Construction Lien? (A Homeowner's Guide)

A construction lien, also called a mechanic's lien or materialman's lien, is a legal claim filed against a property by a contractor, subcontractor, or supplier who performed work or provided materials for that property and has not been paid. A lien attaches to the title of your home, which means the lien holder has a legal interest in the property until the debt is resolved.

In plain terms: if your general contractor does not pay the plumber, the plumber can put a lien on your house, even if you paid the general contractor in full. This is one of the most surprising and stressful legal realities homeowners encounter in remodeling.

Because your legal obligation is to the general contractor, but the general contractor's obligation extends to every subcontractor and supplier they hired. If the general contractor takes your money and fails to pay downstream parties, whether due to financial problems, mismanagement, or fraud, those parties can file liens against your property to recover what they are owed.

A lien on your title prevents you from selling or refinancing your home until the lien is resolved. Resolving it often means paying the unpaid amount yourself, then pursuing the general contractor separately. It is a nightmare scenario that happens more often than most homeowners realize.

A lien waiver is a document signed by a contractor, subcontractor, or supplier that releases their right to file a lien against the property in exchange for payment. There are two types:

• Conditional lien waiver: Releases lien rights upon receipt of a specific payment. It is conditional on the payment actually clearing. This is the standard waiver to request before issuing a payment.

• Unconditional lien waiver: Releases lien rights permanently, regardless of whether payment clears. Do not sign or accept unconditional waivers until you have confirmed the payment has actually been received.

Not necessarily. Filing a lien is a legal remedy available to any party who has not been paid for legitimate work. The lien itself is not a sign of wrongdoing, it is a legal mechanism. The problem arises when a homeowner paid in good faith but the contractor failed to pass the payment down to subs and suppliers.

No. A lien on your title is a legal encumbrance regardless of the dispute between you and your contractor. You will need to either get the lien released voluntarily, bond over the lien, or resolve it through legal proceedings. Ignoring it does not make it go away and will block any sale or refinancing.

• Can you provide a conditional lien waiver for this payment milestone?

• Have all subcontractors and suppliers been paid for work completed to date?

• Are you willing to provide lien waivers from major subs as work progresses?

• Is your contract language clear about your obligation to pay subs from funds received?

See also: Subcontractor, Scope of Work, Change Order, Fixed-Price Contract, Planning and Design Agreement