A mechanic's lien — a lien
permitted by statute which secures
payment for work done or materials
furnished in connection with a
construction job — can be a very
important tool for a contractor,
subcontractor, or materials supplier
attempting to collect payment. It
will get the immediate attention of
not only the property owner, but
the owner's mortgage lender. But it
must be executed and filed
correctly to be effective.
Here's an example of how a
mechanic's lien works: Harry
Homebuilder is developing a
residential subdivision. Frank's
Foundations poured the foundation
for the first home built. Harry has
contracted to sell the home to Bob
and Barbara Buyer. But Harry is
having some cash flow problems,
and has not paid any of