The filing of a claim creates a legal interest in a property. This claim arises when a contractor, subcontractor, supplier, or laborer contributes to the improvement of real property and is not fully compensated for their work or materials. For instance, if a homeowner hires a construction company to renovate their kitchen, and the company fails to pay the supplier for the cabinets installed, the supplier may pursue this legal action against the property.
This legal process serves to protect those who enhance property value by providing a security interest in the property itself. Historically, these protections arose to ensure fairness in construction projects, providing a remedy when payment obligations are not met. This security can be crucial for small businesses and individual laborers, providing leverage for recovering owed compensation and preventing exploitation in the construction industry.
