What is a lien in a contract?

A contractual lien is one that both parties have agreed to, rather than one sought by a creditor when that debtor owes the creditor money. In this instance, the person already has fallen behind on his or her payments. A contractual lien is built into the contract, such as a mortgage or auto loan.

What happens if a contractor puts a lien on Your House?

If a contractor puts a lien on your house, you’ll have to fight to keep your house out of foreclosure. Here’s how to defend yourself. Here’s a scary scenario: You’ve just completed a home improvement project and paid the contractor in full for the work. But the contractor skips out without paying one of his subcontractors.

What to do if you have a materialman’s lien on Your House?

“A materialman’s lien comes from a contractor who has worked on the home or someone who has provided materials for the home within the last 90 days and they’ve not been paid.” In most cases, to resolve a materialman’s lien quickly, you can simply pay the debt and move forward with the home sale.

Can a builder file a mechanics lien against a contractor?

Although the idea behind them is straightforward; a contractor or a builder needs protection against the wrongful refusal to pay for work done; how, exactly, that is legally achieved varies state by state. Each state has its own mechanics’ lien system on the law books. The details can vary significantly.

What’s the priority of a lien on a construction project?

The priority of liens on a construction project does not depend upon the time of completion of the particular job, but rather everything relates back to the first visible commencement of the work. This stipulation means the final work (such as painting) is equal in priority to the initial work of laying a cement foundation.

Can a lien be attached to a property title?

In simple terms, a property lien is something a creditor can attach to a property title that says you owe them money. Until you pay that debt, your title won’t be considered clear, which means you can’t refinance or sell your property. There are two types of liens:

What to do if you have a property lien on Your House?

If you pay the subcontractors or laborers directly, make sure to get a release of lien. Even if your state doesn’t require a written agreement, ask for one. Also keep in mind that contract requirements vary by state.

Can a court place an equitable lien on property?

In some cases, a court may use its equitable powers to place an equitable lien on property to achieve fairness, particularly when someone has possession of property which he/she holds for another.