What is a Mechanic’s or Materialmen’s Lien and How Can it Affect Me as a Property Owner?
What is a Mechanic’s or Materialmen’s Lien?
In its most basic sense, a lien is a conditional interest in property which provides security for a lender by allowing the lender to collect amounts owing from the property if the borrower fails to satisfy their obligations under a contract. The most common example is the lien acquired by a bank in financing a home purchase. If the homeowner fails to make payments as required in the mortgage agreement, the bank has the right to foreclose their lien and take the property.
Washington provides protections for professionals, including contractors, plumbers, electricians, architects and others through use of liens. The law states, “any person furnishing labor, professional services, materials, or equipment for the improvement of real property shall have a lien upon the improvement for the contract price of labor.” RCW 60.04.021. From a practical standpoint, the terms mechanic’s, materialmen’s, construction and contractor’s lien are used virtually interchangeably throughout the legal and financial fields.
In Washington, a “mechanic’s lien” arises if repairs are made to real estate. See generally RCW 60.04. Likewise, a “materialmen’s lien” arises if a person performs construction services on the property. Id. The concept behind mechanic’s and materialmen’s liens is identical to that of a mortgage lien referenced above. In performing construction or repairs, the builder or mechanic is effectively becoming a creditor of the property owner by providing labor and materials. In order to guarantee payment for the labor and materials, the creditor acquires a lien which allows the contactor, electrician, plumber, architect, etc. to recover the contract value of the work from the security (the real estate) in the event the payment for services is not made.
Disputing or resolving materialmen’s or mechanic’s liens can be time consuming and expensive. If you have questions regarding mechanic’s or materialmen’s liens and how they can impact your property rights, the attorneys at Wolff, Hislop & Crockett can help. Contact us today for a consultation.