Mechanic’s Lien

Conceptually, a mechanic's lien is a security interest granted in a property by the owner of the property to the persons who have supplied labour, materials or services for the improvement or development of the underlying property. Based on the nature of the service supplied, the lien is variously characterised as a construction lien, design professional’s lien or supplier’s lien.

In the jurisdictions where a mechanic's lien is legally recognised, it is a legislative device to protect contractors, subcontractors, architects, civil engineers, labourers, carpenters, electricians, plumbers and any others contributing to the improvement of a property from non-payment for their work as a lien on the title to property is created automatically in their favour by the operation of law.

The statutory creation of a lien clearly offers a more effective remedy for contractors and suppliers than a mere right to sue after the work is completed, especially in the construction industry where the economics of the business could be heavily loaded against them.

A mechanic’s lien also would give the subcontractors and suppliers a direct right to claim against the owner of the property. Typically, the owner of a property contracts only with the prime contractor who, in turn, engages the subcontractors and the suppliers pursuant to various subcontract agreements. In the absence of a statutory lien, the subcontractors and the suppliers would essentially have a contractual right under the relevant subcontract agreement that would be enforceable only against the prime contractor.

Further, a pari passu statutory lien would remove the unequal competition among the contractors and suppliers of materials and services in the event that a construction project fails. As all claimants would have an equal right to payment, the aggrieved parties will not have to race each other to file a payment claim in order to claim priority for their payment.

In countries where a mechanic's lien exists, the procedure might simply be to file a claim in the competent court within a stipulated time from the triggering event. Additionally, the lien holder may have to comply with certain legal prerequisites for maintaining and enforcing the lien such as serving a notice of the lien on the owner.

Considering the recent upsurge in construction activity in Oman, the introduction of appropriate legislation for the statutory creation of a mechanic’s lien would go a long way to avoid unnecessary and often onerous construction litigation.