What happens under construction law if a contractor is not paid?

A mechanic’s lien is an important aspect of construction projects in Baton Rouge. Mechanic’s liens serve as a guaranty that builders, contractors, subcontractors, suppliers and construction firms will be paid for the work they do before any other claims are satisfied, should the property be foreclosed upon or repossessed.

A mechanic’s lien remains effective until the construction project is complete, and all parties have been compensated for the work they did. If the parties to the lien are not paid and the project is foreclosed upon or repossessed, the parties to the mechanic’s lien will have a higher priority when it comes to payment after liquidation than other debts the property owner may have.

Construction law on mechanic’s liens vary by state. Sometimes there is a statute of limitations for filing a mechanic’s lien. Once this time period is up, the parties to the lien can no longer seek compensation. This time period is often based upon the date the work at issue was performed or the date that the construction project was finished.

Ultimately, it is the property owner who would be forced to pay under a mechanic’s lien. This is true even if it is a subcontractor who is filing the lien because the contractor did not pay them. In these situations, the subcontractor may be able to pursue a lawsuit against the delinquent contractor.

This post only glosses over the basics of mechanic’s liens. Ultimately, they are a legal document, so it is important that those wishing to file a mechanic’s lien understand exactly what they are doing before proceeding. A poorly-drafted legal document could lead to an unfavorable result. Fortunately, legal help is available to those who want to learn more about mechanic’s liens.