Question

You owe suppliers balances at 90 days + past due for contract work.

-What is the purpose of a Mechanics Lien for vendors demanding payment?

Answer 1

A mechanic’s lien is a legal claim against a home or other property. Mechanic's liens are typically used by subcontractors and suppliers (vendors) when they haven't received payment for improvements they made to a property. They are a way to seek payment for the work done remodeling or improving a home.

You can face a mechanic's lien even if you weren't the one to miss payment. For example, if you remodeled your bathroom and the general contractor did not pay the material supplier who supplied the bathtub, the material supplier can place a lien against your house to recover the money. You, as the homeowner, will be responsible for these payments when sub-contractors, laborers, or suppliers are not paid.

What can be surprising to most homeowners is that it doesn't matter if you already paid the general contractor for the bathtub. If the subcontractor or supplier isn't paid by the general contractor, the law allows the subcontractors to come after you and the real property that was improved (which is often your house). In the end, you may be responsible for paying for the work twice or being forced to sell your house, so it is important to understand how mechanic's liens work and how to avoid them.