Advantage of Liens during this Home Refinance Era
Updated: Jul 13, 2021
In short, a lien is a legal right or claim against a property by a creditor. A contractor who performs work on a residence but does not get paid can be deemed a creditor of sorts. If certain steps are followed, the contractor can file a lien on the nonpaying owner's property such that if the property is sold, the contractor would be paid out of the proceeds. However, there are short-term advantages.
First, no property owner likes a lien on his property, so filing a lien may very well induce payment. Meeting all prerequisites, including filing within the time frame required by law, is key. (Note: There are differences by state based on if the property is residential versus commercial, and if the residential property is owner-occupied versus a flip property).
Second, given low interest rates, many property owners are refinancing their homes. If you have filed a valid claim of lien, your lien will be flagged during that process and may serve as a bar to the refinance. The owner will be incentivized to resolve his dispute with you so the refinance process can resume.
If you are owed for work performed, please fill out our Contact Form. Filing a lien is a great step in seeking payment, particularly in this home refinance era. We will respond within 24 hours to discuss your options.