Construction Lien

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.



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