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Construction lien priorities

On Behalf of | Nov 19, 2023 | Business & Commercial Litigation, Construction Litigation

A mechanic’s lien allows Massachusetts contractors to secure payment by putting a lien on an item that they have worked on. For example, you might put such a lien on a home after putting on a new roof or replacing the siding. However, if multiple parties have a claim on the same property, there is no guarantee that you’ll get paid.

Lien priority

Whether you get paid or not depends on how much money is available as well as your priority as a lienholder. For instance, if a lender or mortgage servicer already has a lien on a home, that party is more likely to get paid first. Then, if there is any money remaining, you would get some or all of what you’re owed. However, if you were first to file a lien on an unencumbered asset, you would likely get paid first.

You might not have to file

In some cases, a lien goes into effect the moment a project begins. In such a scenario, you would have an effective lien against a home the moment you started putting on that new roof or made repairs to the foundation. The lien would remain until you were paid in full whether payment was made voluntarily or as the result of construction litigation.

A mechanic’s lien can be a powerful tool to ensure that you are paid for work performed in a timely and adequate manner. In addition to potentially giving you the right to foreclose on a property, it may give you leverage to negotiate new payment terms without going to court. This may help you save time and money as well as potentially preserve a relationship with a client that you would like to keep in the future.