What do construction lien rights protect for contractors and suppliers?

Construction lien rights are designed to protect contractors and suppliers by allowing them to file claims against the property on which they have worked or supplied materials when they have not been paid for their services. This legal mechanism provides contractors and suppliers a form of security, ensuring that they can seek compensation directly from the property itself. If a contractor or supplier does not receive payment, they can place a lien on the property, which can ultimately lead to a forced sale of the property to satisfy the debt.

This protection is vital in the construction industry because it helps ensure that those who provide labor and materials for a project can recover their costs, maintaining the financial viability of their businesses. Unlike other options, which either address issues of project scope or payment guarantees, the essence of lien rights specifically relates to establishing a legal claim based on work performed and materials supplied.