A Subcontractor Filed a Mechanic's Lien on Your Home After You Paid the Contractor

A lien can cloud your title and block a sale or refinance, even if you paid your contractor in full. Whether the lien is valid depends on your state, the lien's dates and whether the claimant followed notice rules.

Why a lien can appear after you paid

Subcontractors and suppliers who improved your property and went unpaid by the contractor can often claim a lien on the property in many states. Some states shield a homeowner who paid the contractor in full before the lien was filed. Others allow the lien anyway, leaving you to recover from the contractor.

Read the lien carefully

• Who filed it and the amount claimed.
• The dates the work began and ended, and the date the lien was recorded.
• Whether the claimant sent a preliminary notice, where your state requires one.
• Whether the lien was served on you and recorded in the right county within the legal deadline.
• Whether it matches work done on your property.

Steps to take

1. Get a copy of the recorded lien from the county recorder and calendar every date on it.
2. Gather your contract, payment records, change orders, lien waivers and the contractor's final invoice.
3. Contact the contractor in writing and demand that they pay the claimant and get the lien released.
4. Ask the claimant for an itemized statement and a release once paid. Some will accept payment of a lower sum.
5. Check whether your state requires the claimant to file suit within a set period to enforce the lien, often months. A lien that is not enforced in time can expire.
6. Talk to a construction or real estate lawyer, especially if you are selling or refinancing soon.

Ways to clear it

• Pay or settle with the claimant and obtain a recorded release.
• Post a bond that substitutes for the lien so the title is clear while the dispute continues.
• Challenge the lien in court as invalid, late or overstated.
• Use title insurance, if your policy covers it, and notify the title company at once.
• Sue the contractor for the amount you had to pay again.

Prevent it next time

• Ask for lien waivers from the contractor and major subcontractors with each payment.
• Pay by check or traceable method, and make final payment only after a final waiver.
• Ask who the subs and suppliers are, and check that they are paid.
• Check your state's rules on notices to owners, and require the contractor to be licensed and insured.
• See our guide to contractor deposits and unfinished work.

A hypothetical settlement

A homeowner pays a $62,000 remodel in full. A drywall sub claims $7,400 unpaid and records a lien. The homeowner sends the contractor a written demand, then calls the sub, who agrees to accept $6,500 for a recorded release because the owner can pay at once. The homeowner pays, gets the release recorded, and files a claim against the contractor for $6,500. Paying a negotiated figure for a prompt release can be cheaper than months of dispute.

Checking the title

Order a title search or a copy of recorded documents for your property after any big job, and check for liens at the county recorder. If you plan to sell or refinance, give the lender or buyer's title company the lien details early, since many will require a release or a bond before closing.

Frequently asked questions