Mechanic’s Liens: What Contractors and Property Owners Need to Know

A mechanic’s lien — also called a construction lien, materialman’s lien, or contractor’s lien depending on the jurisdiction — is a legal claim against real property filed by a contractor, subcontractor, laborer, or material supplier who has contributed to the improvement of that property and has not been paid. Mechanic’s liens are among the most powerful remedies available to construction industry participants because they attach directly to the real property and can prevent the property from being sold or refinanced until the lien is resolved. For property owners, they are a serious risk if proper payment procedures are not followed. For contractors and subcontractors, they are an essential protection that must be exercised within strict timeframes.

Who Can File a Mechanic’s Lien

Mechanic’s lien rights are established by state statute, and every state has its own version of the law. In most states, the right to file a mechanic’s lien extends to general contractors who have a direct contract with the property owner, subcontractors who contract with the general contractor, sub-subcontractors who contract with subcontractors, material suppliers who supply materials that are incorporated into the improvement, equipment lessors in some states, design professionals (architects and engineers) in many states, and laborers. The common thread is that the lien claimant must have contributed labor, materials, equipment, or services to the improvement of the specific property subject to the lien.

Preliminary Notice Requirements

Many states require that lien claimants who are not in direct contractual relationship with the property owner — typically subcontractors, sub-subcontractors, and material suppliers — serve a preliminary notice on the property owner (and sometimes the lender) within a specified number of days after first providing labor or materials to the project. This preliminary notice serves two purposes: it informs the property owner that the sender has provided work or materials on the property and may have lien rights, and it is a jurisdictional prerequisite to filing a lien. A subcontractor who fails to serve the required preliminary notice on time will lose their lien rights regardless of how much they are owed.

The timing and form of preliminary notices vary significantly by state. California requires a preliminary 20-day notice served within 20 days of first providing work or materials. Arizona requires a preliminary 20-day notice served within 20 days as well. Washington requires a notice to owner served prior to or within 10 days of first furnishing labor, materials, or services. The consequences of missing these deadlines are severe: no preliminary notice, no lien right. Every contractor, subcontractor, and material supplier who works on private construction projects should have a preliminary notice system that ensures notices are served on every project, as a matter of routine.

Filing the Lien

After a payment dispute arises, the lien claimant must file a claim of mechanic’s lien with the county recorder’s office (or equivalent) in the county where the property is located within a specified period after the last day the claimant provided labor or materials to the project. This deadline also varies significantly by state: California allows 90 days from completion of the work of improvement, or 60 days after the recording of a notice of completion. Arizona allows 120 days from substantial completion. Washington allows 90 days from the last day of work.

The lien must identify the property, describe the work or materials provided, state the amount owed, and be verified by the lien claimant. It must be recorded in the appropriate county recorder’s office before the deadline. A late-filed lien is void and unenforceable. The lien must also typically be served on the property owner within a specified period after recording.

Enforcing the Lien

Filing a mechanic’s lien preserves the right to enforce it, but does not by itself result in payment. To enforce a mechanic’s lien, the lien claimant must file a lawsuit to foreclose the lien within a specified period after recording it — typically six months to two years, depending on the state. If the foreclosure lawsuit is not filed within the enforcement deadline, the lien expires and is unenforceable. Lien foreclosure can result in a court order requiring the property to be sold to satisfy the lien, though in most cases the lien is resolved through settlement before reaching that point.

Property Owner Protections

Property owners can take several steps to protect themselves from mechanic’s liens. Before making payment to the general contractor, requiring conditional lien releases from all subcontractors and suppliers who provided work or materials through that payment period reduces the risk that those parties will later file liens for the same work. A conditional lien release is effective upon receipt of payment and is the most common form used during the project. At project completion, obtaining unconditional lien releases from all lien-eligible parties is the final protection against post-completion liens.

Some states allow property owners to record a notice of completion (or notice of cessation) at project conclusion, which shortens the deadline for filing liens and provides certainty about when the lien period ends. Title insurance and payment and performance bonds from contractors provide additional protections in larger projects.

The Bottom Line

Mechanic’s liens are a critical collection and payment security tool for construction industry participants — but they are governed by some of the most strict and unforgiving deadlines in all of commercial law. Contractors, subcontractors, and material suppliers who fail to serve required preliminary notices or to file liens within the applicable deadlines lose their lien rights permanently. Property owners who fail to require lien releases before making progress payments may find themselves paying twice for the same work. Both sides of the construction payment relationship need to understand the applicable state lien law and implement procedures that ensure compliance with its deadlines.