CC Contract Law and Lien Rights

Question 1

What is a mechanics lien?

Accepted Answer

A legal claim against a property for unpaid construction work or materials

Answer

A mechanics lien is a security interest placed on a property to ensure contractors, subcontractors, and suppliers can be paid for their services.

Question 2

Which of the following is typically required before a contractor can file a mechanics lien?

Accepted Answer

Serving a preliminary notice to the property owner

Answer

Most states require a preliminary notice (also called a pre-lien notice) to be sent to the property owner within a set timeframe as a prerequisite to lien rights.

Question 3

What does 'prompt payment' legislation require of general contractors regarding subcontractors?

Accepted Answer

Subcontractors must be paid within a set number of days after the GC receives payment

Answer

Prompt payment laws establish mandatory timelines for passing funds down the payment chain from owner to GC to subcontractor.

Question 4

A 'lien waiver' is signed by a contractor to:

Accepted Answer

Release their right to file a mechanics lien upon receipt of payment

Answer

A lien waiver is a document acknowledging receipt of payment and relinquishing the right to place a lien on the property for that amount.

Question 5

What is the 'statute of limitations' for filing a mechanics lien?

Accepted Answer

A state-specific deadline by which a lien must be filed after project completion or last work date

Answer

Each state sets a deadline (typically 60–120 days) from the last date of work within which a mechanics lien must be filed or the right is forfeited.

CC - Contractor Certificate Practice Test

CC - Contractor Certificate Practice Test

CC Contract Law and Lien Rights