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Construction lien priorities

The Idaho construction industry is both lucrative and risky. Companies can make millions of dollars when projects are completed. But they often have to perform work and be reimbursed later. The construction lien is an important way for companies to reduce the risk associated with this payment structure. Companies need to be familiar with liens and lien priorities to make the most of this helpful tool.

What is a construction lien?

A construction lien is a tool in commercial construction law designed to protect the mechanics and other individuals working on a construction job. The lien replaces the need for construction employees to go to court and file costly lawsuits in order to get back the money they are owed. Instead, lien laws ensure that mechanics are paid available funds if a project falls through. They are an essential part of keeping plumbers, electricians, and members of other buildings trades in business on jobs large and small.

Lien priority

One of the most important legal concepts behind a mechanics lien is priority. Liens are usually paid out in the order that they are filed. There are exceptions to this rule, most notably in the case of a tax lien or mortgage. Past those outliers, the most important step to increasing the chances of a lien being paid is to get the lien filed as quickly as possible.

Once the lien is enacted, the earliest filers get to make their full claim on the money owed to them. Many of these early filers will be large companies with years of experience in the field and know exactly when and how to claim to maximize their return. Smaller, less experienced companies may wait to file a claim and be left out.