What is defined as a 'construction lien'?

A construction lien, also known as a mechanic’s lien or materialman’s lien, serves as a legal claim against a property when contractors, subcontractors, or suppliers have not been paid for work or materials provided on that property. This legal measure ensures that those who contribute to a construction project are compensated for their efforts and materials. If a contractor or supplier files a lien, it can complicate the property’s ability to be sold or refinanced until the debt is settled, effectively protecting the financial interests of those who contributed to the construction.

This definition is essential in the context of construction law and project financing, as it underscores the importance of ensuring that payments are made throughout the project lifecycle. Understanding construction liens helps all parties in the construction process to manage risks associated with non-payment and emphasizes the need for clear payment terms in contractual agreements.