It’s understandable if you are having trouble grasping the different concepts regarding mechanics liens. You can get a basic understanding of this confusing topic by first reading the glossary of terms listed below.
A mechanic’s lien provides a claimant—one who has rendered service, labor, material, or equipment for a work of improvement—with a rightful security interest in the improved property. The lien may be foreclosed if the claim is not paid.
The claimant is the one who performs the labor, skills, or services for a work of improvement. He or she may also be the one who provides the materials or equipment used during the project. The claimant is the person, the contractor, subcontractor, builder, design professional or laborer who files the mechanic's lien.
In the context of mechanic’s liens and related construction remedies, an owner has a legal interest in the real estate property whether it be a home, commercial building, farm, leaseholder or other developmental real property.
When the owner contracts directly with a specialty contractor for just a portion of work, the specialty contractor is considered an original contractor.
General or prime contractor are other names often used for the original contractor. However, not every original contractor is the “general” or “prime” contractor. The term is usually reserved for the contractor hired by the owner for the entire project.
The subcontractor is a contractor who has no direct contractual relationship with the owner. He or she is hired by the general or prime contractor to do a specific work on a project. The subcontractor can be a claimant. Think of carpenters, electricians, cement masons for example.
Design professionals are typically those whose services have traditionally been considered “professional.” They are:
Lenders, surety, and title companies are typically the other possible principal parties in a mechanic’s lien.
A stop notice freezes undisbursed funds held by the construction lender or owner so that the claimant may be paid.
The payment bond guarantees payment for labor and materials if the principal (owner, contractor, or subcontractor) defaults.
The claim of lien is a statement of the claimant’s demand after deducting all just credits and offsets.
The contract is an agreement between an owner and any original contractor providing for the work of improvement or any part thereof.
Unless otherwise provided in this title, the term work of improvement relates to the entire structure or scheme of improvement as a whole. It includes the construction, alteration, addition to, or repair in whole or in part of any:
Work of improvement may also include the seeding, sodding, or planting of any lot or tract of land for landscaping purposes. Other examples are: