What is a “mechanic’s lien” in the context of construction?

A mechanic's lien is a legal claim that allows contractors, subcontractors, and suppliers to seek payment for work performed or materials supplied to improve a property. When a contractor is not paid for their services, they can file a mechanic's lien against the property, which effectively places a hold on the title of the property. This means that the homeowner or property owner cannot sell or refinance the property until the lien is resolved, typically by paying the owed amount. This legal tool is vital for ensuring that those involved in construction and improvement projects are compensated for their contributions, as it provides protection for their financial interests in the work completed. The legality surrounding mechanic's liens can vary by state, but they serve a fundamental role in the construction industry by securing payments for services rendered.

The other options do not accurately describe the nature of a mechanic's lien; for example, a type of building material, an informal agreement, or a cost-estimating tool do not capture the legal and financial implications of the mechanic's lien process in construction.