A mechanic’s lien is a powerful legal tool that allows contractors, subcontractors, and material suppliers to secure payment for work performed on a property. While mechanic’s liens protect the rights of those who improve real estate, they can also create serious problems for property owners, buyers, and lenders. A lien can delay closings, block financing, and even lead to foreclosure if left unresolved.
For anyone involved in commercial or residential real estate, understanding how mechanic’s liens work is essential. Whether you are a contractor trying to get paid, a property owner dealing with an unexpected lien, or a buyer concerned about hidden liabilities, knowing the legal process can help you avoid costly mistakes.
What Is a Mechanic’s Lien?
A mechanic’s lien is a legal claim against a property that secures unpaid debts for construction work, repairs, or materials. Unlike other types of debts, a mechanic’s lien attaches directly to the property, meaning that even if the owner has already paid the general contractor, unpaid subcontractors or suppliers can still file a lien.
Mechanic’s liens serve as a form of collateral for unpaid construction work. If the debt is not resolved, the lienholder can take legal action to enforce the lien, which may result in a court-ordered sale of the property.
How Mechanic’s Liens Affect Property Owners, Buyers, and Lenders
Property Owners
For property owners, a mechanic’s lien can create serious legal and financial challenges. Even if the property owner has paid the general contractor in full, subcontractors and suppliers who were not paid may still have the right to file a lien. If a lien is placed on a property, the owner may be unable to sell, refinance, or transfer the property until the lien is resolved.
Buyers
Buyers who purchase a property with an undisclosed mechanic’s lien may inherit the financial burden. If a lien is discovered during the closing process, the sale may be delayed or even canceled. This is why conducting a title search before purchasing a property is crucial.
Lenders
Lenders generally require a clear title before approving financing. If a mechanic’s lien is recorded against a property, lenders may refuse to issue a mortgage or refinance loan until the lien is cleared. Since mechanic’s liens often take priority over other debts, they pose a significant risk to lenders.
The Mechanic’s Lien Process in Massachusetts
Massachusetts has strict laws governing the filing and enforcement of mechanic’s liens. If a contractor, subcontractor, or supplier is not paid, they must follow specific legal steps to perfect their lien.
- Notice of Contract – The lien claimant must file a Notice of Contract at the Registry of Deeds within 60 to 90 days after completing work. This document officially places the lien on record.
- Statement of Account – The claimant must then file a Statement of Account detailing the amount owed within 90 to 120 days of completing work.
- Enforcement Through the Courts – If the debt is not settled, the claimant must file a lawsuit to enforce the lien within 90 days of recording the Statement of Account. If no action is taken, the lien expires.
How to Prevent and Resolve Mechanic’s Liens
Property Owners
To avoid mechanic’s lien issues, property owners should:
- Ensure all subcontractors and suppliers are paid before making final payments to the general contractor.
- Require lien waivers from contractors to confirm they have paid their subcontractors.
- Conduct a title search before selling or refinancing to check for unexpected liens.
Buyers
To protect against mechanic’s liens, buyers should:
- Request a title search before closing to uncover any outstanding liens.
- Consider title insurance, which may provide coverage for undisclosed liens.
- Ensure sellers provide proof of payment for recent construction work.
Lenders
Lenders can reduce the risk of mechanic’s liens by:
- Requiring a title report and lien search before approving financing.
- Holding escrow funds until all construction-related debts are settled.
- Mandating lien waivers from contractors before releasing final payments.
What Happens If a Mechanic’s Lien Is Filed?
If a mechanic’s lien is recorded against a property, there are several ways to resolve it:
- Negotiate Payment – Property owners may work out a settlement with the lienholder to satisfy the debt.
- File a Lien Bond – Massachusetts allows property owners to bond off the lien, replacing the claim with a surety bond to clear the title.
- Challenge the Lien in Court – If the lien is invalid or improperly filed, the property owner can petition the court to have it removed.
Failing to resolve a mechanic’s lien can result in legal action, which may lead to foreclosure proceedings.
Final Thoughts
Mechanic’s liens are a double-edged sword—they protect contractors from nonpayment, but they also create risks for property owners, buyers, and lenders. Understanding how mechanic’s liens work can help prevent legal disputes, financing delays, and lost real estate deals.
Whether you are a contractor looking to secure payment, a property owner facing a lien, or a real estate professional trying to protect your clients, knowing the law is essential. If you need assistance with a mechanic’s lien issue in Massachusetts, consulting with an experienced real estate attorney can help you navigate the legal process and protect your interests.
