When you remodel or make major improvements to your home, you generally hire a contractor to handle the project. That person, in turn, may hire subcontractors and will work with suppliers to get the work done.
You pay the contractor. He or she is responsible for paying any subcontractors and suppliers who help with the project. What happens if the contractor doesn’t pay? A mechanic’s lien could be placed on your home.
Despite its name, a mechanic’s lien is not put on your home by the people who work on your car. Rather, unpaid subcontractors and suppliers can come after you (and your home) to be paid. Does it seem unfair? Perhaps, but laws favor the worker being paid rather than worrying about the homeowner paying for the same work twice.
Like other types of liens, a mechanic’s lien causes your title to be unclear, and you would be unable to refinance or sell your home until the debt is paid. That’s why it is important to research and check references on any contractor you’re bringing in to do work on your home.