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A lien is legal charge against a project. A mechanic’s lien is one made by a contractor and a materials lien is made by someone who supplies materials for the job. Liens tell everyone “I have done some of the work or supplied some of the material for this job and I won’t release my rights to get paid until I actually do get paid.” Lenders who make payments to contractors and suppliers will require that they simultaneously sign off on the lien saying that it has been satisfied and that they have no additional rights to the property. If you are self-financing the basement remodel, make sure you get the lien released when you pay a contractor or supplier. Most contractors, suppliers, and stationery stores have the forms. If you’d like to know more about mortgages, lenders, liens, and other financial aspects of homes, get my book, The Complete Idiot’s Guide to Building Your Own Home, available at www.DontKnowBooks.com.
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