How To Protect Against Mechanic's Liens

Last week we wrote about how if your contractor doesn’t pay his sub-contractors, you can find them coming after the value of your house, a process called a mechanic’s lien.

Bankrate says you can protect yourself by including in the contract a, “release-of-lien addendum or by placing your payments in escrow until the work is finished.”

Several commenters also advised holding back 10% for 30-90 days each time the contractor asks to get paid, until you have confirmation that the subcontractors were paid for that phase. And of course, always use a licensed contractor with good referrals and BBB record. — BEN POPKEN

Don’t let bad contractors nail your budget [Bankrate]

PREVIOUSLY: If Your Contractor Doesn’t Pay The Sub-Contractors, You Can Find Them Coming After You