Contract Glossary

Lien

Definition

A legal claim on someone's property as security for a debt. If the debt isn't paid, the lienholder can force a sale of the property to recover what's owed. Common types include mortgage liens, mechanic's liens, and tax liens.

In Practice

If you're a contractor and your client doesn't pay, a mechanic's lien on their property is one of your strongest tools. It prevents them from selling or refinancing until they pay you. Filing deadlines are strict, in many states, you have 60-90 days after completing the work to file. Miss the deadline, and you lose the right.