Mechanic's Liens: What to be Aware of & What You Can Do.
Often, these types of liens are discussed & most relevant during the process of a construction loan. Title companies and lenders work with contractures to ensure that all invoices are paid for work that has been completed. But, there are instances where an invoice can be overlooked. If this happens, there is the potential that the unpaid party can file a mechanic’s lien A mechanic’s lien is a legal claim filed by a contractor, subcontractor, or supplier who wasn’t paid for work or materials used on the home. And yes, it can affect you even if the work happened before you ever set foot on the property.
What Can Occur:
- Title Problems – The lien clouds the title, meaning the property can’t be transferred cleanly until the lien is resolved.
- Closing Delays – Discovery of a mechanic’s lien during the title search can stall or even cancel the transaction.
- Financial Liability – In some cases, a buyer could become responsible for paying off the lien to clear the title, especially if it goes unnoticed until after closing.
- Legal Hassles – Disputes about whether the lien is valid can lead to legal headaches, especially if the previous owner disputes it.
Steps You Can Take:
- Title Search & Insurance – A thorough title search will identify any existing liens. Title insurance protects you if a lien is missed.
- Work with a Reputable Title Company – They’ll ensure any lien is resolved or paid off before closing.
- Request Seller’s Affidavits – These affirm that all work done on the home was paid in full.
- Know the History – Ask if recent work or renovations were completed, and confirm that all contractors were paid.
A mechanic’s lien doesn’t have to ruin your homebuying plans—However, it can if it’s not addressed early. With the right team and due diligence, you can move forward with peace of mind and a clear title.
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