Why is a lien considered a powerful collection tool?

A lien is considered a powerful collection tool primarily because it gives the lienholder a legal claim against a property, which can be enforced if the debt is not paid. When a lien is placed on a property, it can lead to a court ordering the sale of that property to satisfy outstanding debts for labor and materials. This means that if a contractor or supplier is owed money for work done or materials provided, they can secure their right to payment by placing a lien on the property. If the owner fails to resolve the debt, the property may be sold at auction, with proceeds used to pay off the owed amounts.

This mechanism creates a significant incentive for property owners to settle their debts, as the lien can jeopardize their ownership and control over the property. Additionally, the lien remains attached to the property even if it is sold, making it a persistent obstacle for property owners who have outstanding obligations. Overall, this legal instrument provides a level of security for those owed money, making it an effective collection strategy in the construction industry and beyond.