Priority of Mechanic's Liens: State Comparison Chart

by Practical Law Real Estate

A Reference Chart that provides a state-by-state overview of the laws governing the relative priority of mechanic's liens on improved commercial real property. This Reference Chart addresses the critical issue of lien priority, which determines the order of payment when property is sold in foreclosure or bankruptcy and can dictate whether a lienholder receives full payment. It compares legislation across all 50 states and the District of Columbia on key topics including the date a mechanic's lien attaches, the application of the "first spade rule," and the priority of the lien relative to a lender's security instrument. This Reference Chart also examines state-specific approaches to the "enhanced value rule" and the requirements for stop payment notices. By outlining the significant variations in state law, this Reference Chart serves as an essential starting point for contractors, subcontractors, lenders, and counsel navigating competing priority interests in commercial real property projects. We update this Chart semi-annually.