Construction Lien

AAA

DEFINITION of 'Construction Lien'

A claim made against a property by a contractor or other professional who has supplied labor or materials for work on that property. Construction liens are designed to protect professionals from the risk of not being paid for services rendered. Remedies vary from state to state, and can differ depending on whether the property in question is real property or personal property.

INVESTOPEDIA EXPLAINS 'Construction Lien'

If the property owner is not satisfied with the work done by the contractor or professional, simply not paying the bill will not resolve the issue. Instead, the property owner should approach the contractor about the quality of service and what can be done to rectify the issue. If the contractor has used subcontractors and has not paid them, the homeowner could still be on the hook for the payment, and the lien could be used to ensure payment is made.

RELATED TERMS
  1. Contractor Fraud

    Illegal business practices committed by firms hired to reform, ...
  2. Lien Sale

    The sale of the claim or "hold" placed on an asset to satisfy ...
  3. Property Lien

    A property lien is a legal claim on a tract of real estate granting ...
  4. Mechanic's Lien

    A guarantee of payment to builders, contracters and construction ...
  5. Real Property

    Any property that is attached directly to land, as well as the ...
  6. Lien

    The legal right of a creditor to sell the collateral property ...
RELATED FAQS
  1. If a telecommunication company wants to build a tower on my land how much should ...

    It is impossible to answer, with anything close to a specific dollar amount, the question of how much to charge a telecommunications ... Read Full Answer >>
  2. How do I find a good personal bankruptcy lawyer?

    While it is not necessary to hire an attorney to file bankruptcy, the rules that govern bankruptcy can be extremely complex, ... Read Full Answer >>
  3. What are some of the challenges in real estate development?

    The act of manipulating, building on, and/or designing and constructing new uses for real estate is known as developing. ... Read Full Answer >>
  4. What are unregistered securities or stocks?

    Before securities, like stocks, bonds and notes, can be offered for sale to the public, they first must be registered with ... Read Full Answer >>
  5. How does FINRA differ from the SEC?

    With all the financial organizations out there, knowing what they all do can be as complicated as knowing where to invest. ... Read Full Answer >>
  6. What's the difference between housing starts and building permits?

    Housing starts and building permits are economic indicators used to determine the health of the housing sector. In the United ... Read Full Answer >>
Related Articles
  1. Retirement

    Holding Titles On Real Property

    Find out how best to claim and convey ownership on your assets.
  2. Home & Auto

    Attention Home Buyers! Why You Need A Lawyer

    Property transactions are complex and subject to specific state/local rules. A professional can simplify the process.
  3. Personal Finance

    Building Green For Your House And Wallet

    The earth-smart money is on these environmentally friendly housing projects.
  4. Mutual Funds & ETFs

    Non-Traded REITs: Risks and Rewards

    An overview of the risks and rewards of non-traded REITs and how they compare to exchange-traded REITs.
  5. Mutual Funds & ETFs

    How To Start a Hedge Fund In the United States

    A general overview of how to start a hedge fund firm in the United States, including complying with state and federal regulations.
  6. Mutual Funds & ETFs

    How To Start A Hedge Fund In The UK

    Starting a new hedge fund in the United Kingdom is more complex than in the United States. We discuss UK laws and regulations for starting a new hedge fund.
  7. Mutual Funds & ETFs

    Investing in REITs: What You Need to Know

    Thinking of investing in REITs? Here's what you need to know first.
  8. Mutual Funds & ETFs

    How To Start A Hedge Fund In Canada

    Would-be hedge fund managers in Canada need to understand the laws and regulations that must be followed in order to start a fund in the country.
  9. Mutual Funds & ETFs

    Want Emerging Market REIT Exposure? Eye These ETFs

    It's possible (and easy) to invest in emerging market real estate from the United States — just look at these REIT ETFs.
  10. Taxes

    Is It Smart To Get Dual Citizenship?

    Does it ever make sense to be a citizen of the U.S. and somewhere else? Yes, so you can work minus a visa – not so much, if you get drafted into the army.

You May Also Like

Hot Definitions
  1. Venture-Capital-Backed IPO

    The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative ...
  2. Merger Arbitrage

    A hedge fund strategy in which the stocks of two merging companies are simultaneously bought and sold to create a riskless ...
  3. Market Failure

    An economic term that encompasses a situation where, in any given market, the quantity of a product demanded by consumers ...
  4. Unsystematic Risk

    Company or industry specific risk that is inherent in each investment. The amount of unsystematic risk can be reduced through ...
  5. Security Market Line - SML

    A line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky ...
  6. Tangible Net Worth

    A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, ...
Trading Center