During the escrow process a title search is preformed; the search is looking for title defects.  A mechanics lien is one such defect.  In order to deliver “clear” title to the new owner, any title defects must be cleared prior to closing. 

A mechanic's lien is a “cloud” on title which if unpaid, could ultimately result in foreclosure.  An unpaid contractor, sub (subcontractor) or supplier can record a mechanics lien.  Even if the homeowner has already paid their contractor in full, a mechanics lien can occur if the primary contractor has not paid the subcontractors or suppliers.

Prior to paying a contractor in full, the homeowner should request proof that all suppliers and subs have been paid.