How They Work

Here, generally, is how mechanic's liens work. First, a contributor (a supplier or subcontractor) who does not contract directly with the homeowner must provide the homeowner with fair notice that describes the goods or services that are being contributed. The notice must typically be delivered within 20-30 days of when the goods and services were first contributed.

If the contributor isn't paid after work is begun or the materials are supplied, then the contributor files a document called a "claim of mechanic's lien" at the county recorder's office for the county where the real estate is located. The contributor then has a period of time -- typically between 60 days and six months -- in which he or she can either work out the payment problem or file an action against the owner to enforce the lien, which may ultimately lead to the property being sold at auction. If the enforcement action isn't filed by the statutory deadline, the lien becomes invalid.

As it turns out, mechanic's lien enforcement lawsuits are seldom filed within the mandatory period, which should mean that the lien has no further effect. Even so, an old lien on a property can negatively impact the owner's ability to sell the property because many title insurance companies will refuse to clear title when the property is sold unless the lien is affirmatively removed, either by a release from the lien claimant or by court order. Fortunately, in most states, getting a court order is simple and straightforward when it is clear that the mechanic's lien claimant blew the enforcement action filing deadline.