Contractors working close to the financial edge may use the money you paid them for the work they performed on your foreclosure to pay for materials they purchased for a previous job. If the contractor does not pay off the debt, it is not impossible for the homeowner to find that a mechanic’s lien was filed against his or her home.
A mechanic’s lien is a statutory financial claim against property, that is created in favor of contractors, laborers, and/or suppliers who have performed work or furnished materials to erect or repair a building and were not paid.
I have heard horror stories from property owners who discovered liens filed against their homes by building supply companies, even though the property owners had paid the contractors in full for their jobs. You can help protect yourself by asking the contractor, as part of your contract terms, to provide you with a “waiver of mechanic’s lien rights” for any subcontractors or material suppliers who provided labor or materials for your job. Contact your attorney for more information about protecting yourself from this heavy-duty headache.