Contractor liens, which are often referred to as construction liens or mechanic's liens, occur when a contractor or other type of service provider performs work and is not paid for those services by the property owner. A contractor lien is a claim for payment made by a contractor or a subcontractor who has performed some sort of work on a property or piece of real estate. Essentially, because the contractor's work has become a part of the real estate, or added value to the real estate in some way, the contractor can cause a lien to be placed on the real estate for any unpaid services provided. While this type of lien cannot result in the foreclosure of the property, as with a mortgage lien, it will remain attached to the property until the claim is paid in full or the parties otherwise resolve the issue.
These types of liens most often occur in the construction and/or home improvement context, but may also be filed when services provided by a materials supplier go unpaid. Additionally, in some states, professionals such as architects and surveyors may be able to file contractor liens against property if their services have not been paid for by the property owner. When any of these situations occur, the aggrieved contractor or other service provider is entitled to file a lien, or a claim, against the relevant property for the value of the services provided which has gone unpaid.
There may be a number of reasons to dispute a contractor lien. For instance, a property owner may be unwilling to pay for shoddy or incomplete services provided by the contractor. In other cases, there may be a dispute between the contractor and property owner as to the terms of the original contract for services. Often, it may be necessary to contest the lien and/or the underlying debt in court in order to obtain a court judgment regarding the disposition of the debt and/or lien. As litigation over contracts and liens can become rather complex, it is always advisable to contact an experienced real estate attorney to assist you with any such dispute.
Whatever the dispute between the contractor and property owner may be, the contractor lien that has been placed on the real estate can not be released or resolved until the underlying debt is resolved between the parties. Such a resolution might occur simply from the property owner and contractor reaching a settlement or agreement as to a reduced payment by the property owner, or additional services provided by the contractor. Often, attorneys for the parties are able to mediate such a settlement. Absent such a settlement, however, the property owner's only recourse may be to resolve the matter through court action, and allow a judge to decide whether the lien should be released, and under what circumstances the lien should be released.