Building on construction liens

It’s unfortunate, but sometimes contractors have to go through the liens process in order to get compensated for their work.┬áIn fact, construction liens are becoming more common, which is having an impact on the construction industry.

Here’s a brief look at construction liens nationwide:

Construction Liens in the United States

Also referred to as a mechanic’s lien foreclosures, construction liens have swept the country in recent years.

The term originated in the auto repair industry as a result of mechanics not getting paid for their work. Construction liens work much the same way except the financial consequences are usually much greater.

According to the National Lien and Bond Claim System, there are nearly 20,000 mechanic foreclosure liens, or construction liens, in the U.S. each year.

The state of Florida experiences the most lien filings from year to year with California and Illinois also topping the list.

Construction Liens Process

In its most basic form, a construction lien gives contractors, builders, material suppliers, and others in the construction industry a legal recourse to receive compensation for their work. Each state has its own construction liens laws; however the laws differ from one state to the next.

In an expert interview with Mark Cobb on construction liens, Cobb describes the lien process as one of constant change.

As new issues arise in construction law, new lien guidelines are created. As a result, most construction companies consult lawyers who specialize in liens and bonds before entering into a contract.

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