Mechanics liens, for homeowners

In most states, a subcontractor or supplier who isn't paid can put a lien on your house, even if you paid your general contractor in full. The usual protection is to collect lien waivers from everyone who worked on or supplied the job as you pay.

A first-time homeowner wrote that nobody had told them about lien waivers until a tile subcontractor called about money they had already paid the general contractor. A homeowner in Texas paid for a roof in full, with receipts, and then a metal supplier filed a lien because the roofer hadn't paid for the materials. And a homeowner in Oregon, about to release a $125,000 final payment, had received dozens of notices of the right to lien and wanted to know how to pay without paying twice.

How it happens

You pay the general contractor. The general contractor is supposed to pay the plumber, the tile setter and the supply house. If they don't, those people never had a contract with you, but state law gives them a claim against the property they improved. So the lien lands on your house.

Preliminary notices are a warning, not a threat

In many states, subs and suppliers must send the owner a preliminary notice (sometimes called a notice to owner) early in the job to keep their lien rights. Getting one doesn't mean anything is wrong. California's licensing board puts it simply in its homeowner's guide to preventing liens: if you receive one, don't panic. It tells you who could claim a lien, which is the list of people whose waivers you'll want.

Lien waivers

A lien waiver is a signed statement that someone has been paid and gives up lien rights for that amount. There are four common kinds:

• A conditional waiver on a progress payment takes effect only once that payment actually clears.
• An unconditional waiver on a progress payment takes effect when it's signed, so it should only be signed after the money is received.
• Conditional and unconditional waivers on final payment work the same way for the whole job.

A common practice is to ask for a conditional waiver from your contractor and each sub or supplier with each payment, and the unconditional one after the payment clears. Some states require their own waiver forms; check yours.

If a lien is filed

Liens have strict deadlines and rules, and a lien that misses them may be invalid. Get a copy from the county recorder, check the dates, and talk to a real estate or construction attorney in your state quickly. Your contractor is usually the one who has to make it right, since they were paid for the work.

Lien law is set by each state and changes. Treat this as a starting point for a conversation with an attorney.

This is general information, not legal advice. States differ on what a home improvement contract and its changes must contain. Check with your state’s contractor licensing board or an attorney.