What is the purpose of a construction lien?

What is the purpose of a construction lien?

• A. To secure payment for construction work performed
• B. To apply for building permits
• C. To provide tax relief
• D. To reduce building costs

Answer: (A)

A construction lien serves the primary purpose of securing payment for work performed on a construction project. When a contractor, subcontractor, or supplier provides labor or materials for a construction project and does not receive payment, they can file a lien against the property. This legal claim ensures that the debt is paid when the property is sold or refinanced, thereby protecting the rights of the laborers and suppliers involved in the project. By filing a lien, the claimant can compel the property owner and other parties to settle their financial obligations. This mechanism is critical in the construction industry, where upfront costs are common, and financial disputes can arise without proper protections in place.

A construction lien serves the primary purpose of securing payment for work performed on a construction project. When a contractor, subcontractor, or supplier provides labor or materials for a construction project and does not receive payment, they can file a lien against the property. This legal claim ensures that the debt is paid when the property is sold or refinanced, thereby protecting the rights of the laborers and suppliers involved in the project. By filing a lien, the claimant can compel the property owner and other parties to settle their financial obligations. This mechanism is critical in the construction industry, where upfront costs are common, and financial disputes can arise without proper protections in place.