Unpaid Contractor Lien When Selling Your Boston Home

A contractor's unpaid bill can become a mechanic's lien recorded at the Registry of Deeds, and the buyer's lender will not close over it. Clear it before closing by paying it, negotiating a release, bonding around it, or challenging it in court, and check the Registry before you list, since a contractor who last worked more than about 120 days ago with nothing recorded is unlikely to file a new lien.

What happens if a contractor files a lien before you sell your Boston home?

A contractor's lien, called a mechanic's lien in Massachusetts, is recorded at the Registry of Deeds and sits on your title as a cloud your buyer's lender will not close over. You generally have to clear it before closing, either by paying it, negotiating a release, recording a bond to dissolve it, or having it discharged in court. The title search at the Registry is where it turns up. It won't show up on the municipal lien certificate, which lists taxes and municipal charges such as water rates, so deal with it early.

You finished the kitchen last spring, you and the contractor disagreed about the last payment, and you've almost forgotten about it. Then you accept an offer, and your attorney calls to say there's a filing against your house at the Suffolk County Registry of Deeds.

Owners of single-family homes, condos, and two- and three-families in Jamaica Plain, Roslindale, Hyde Park, Dorchester, and Roxbury have done a lot of renovation work in recent years, and any of those jobs can end in a payment dispute. Here is how these liens work, what the clock looks like, and what to do about one before it costs you a closing date.

Key Takeaways

A mechanic's lien under Massachusetts General Laws Chapter 254 is recorded at the Registry of Deeds and clouds your title until it is cleared.
A contractor's Statement of Account must be filed within 120 days after the last labor or materials (or earlier in some cases), or the lien is dissolved.
The lien is also dissolved unless a lawsuit is started within 90 days after the Statement of Account is filed.
The standard Greater Boston Real Estate Board form lets a seller extend closing by 30 days to cure a title defect.
You can pay the lien from proceeds at closing, negotiate a recorded release, record a bond under Section 14, or ask a court to discharge it under Section 15A.

How does a mechanic's lien get onto your title?

Under Massachusetts General Laws Chapter 254, a contractor, subcontractor, or supplier who isn't paid for work on your property can record paperwork at the Registry of Deeds that attaches a claim to the property. You do not have to agree to it. The claim attaches to the property, which is why it shows up when a title examiner searches the records.

For a contractor who signed a contract directly with the owner, the statute sets a sequence of filings, and the deadlines run from the earliest of several events:

Notice of Contract (c.254 §2). Recorded no later than the earliest of 60 days after a Notice of Substantial Completion is filed or recorded, 90 days after a Notice of Termination, or 90 days after the contractor last furnished labor or materials.
Statement of Account (c.254 §8). Filed no later than the earliest of 90 days after a Notice of Substantial Completion, 120 days after a Notice of Termination, or 120 days after the last labor or materials. If it isn't filed in time, the lien is dissolved.
Lawsuit to enforce (c.254 §11 and §5). The lien is dissolved unless a civil action is started within 90 days after the Statement of Account is filed, and an attested copy of the complaint is recorded at the Registry within 30 days of starting the action.

Those dates matter for you in two ways. If your project finished more than about 120 days ago and nothing was recorded, a new lien is unlikely. And if a lien was recorded but the contractor missed a later deadline, the lien may already be dissolved, which your attorney can confirm and clear off the record. Subcontractors and suppliers follow related sections with their own notice rules. Treat this as a general summary, not legal advice; the exact timeline depends on the facts of your job.

Why does a lien stall a Boston home sale?

Because you have to deliver clear title and the buyer's lender will not fund over an open claim. Your Purchase and Sale Agreement obligates you to deliver good, clear, marketable title at closing. The contract is covered in more detail in the guide to the Massachusetts P&S for Boston sellers. A recorded lien breaks that promise, and the buyer's lender will not fund a mortgage on a property with an open claim against it.

The standard Greater Boston Real Estate Board form gives a seller a safety valve. If you cannot deliver clear title at the scheduled closing, you can elect to use reasonable efforts to cure the defect by giving written notice, and the time for performance is extended by 30 days. Buyers' attorneys often add a rider that ends the extension if it would run past the buyer's mortgage commitment or rate lock. Every extra week costs the buyer something, and a lien that eats your 30 days can push a buyer toward the exit.

That is the real cost of an unpaid contractor. As an example, the invoice might be $12,000. A failed sale on a $900,000 house costs far more in carrying costs, a relisting, and a weaker negotiating position the second time around.

How do you clear a contractor's lien before closing?

You have four ways: pay it, negotiate a release, bond around it, or challenge it in court.

1. Pay it, and record the release. If the claim is accurate, the cleanest route is to pay it and get a recorded release or discharge. Your attorney can pay it from your proceeds at closing against a payoff letter, which keeps the sale on schedule. This works like paying off a mortgage or a HELOC, and it belongs on your net sheet. To see what else comes out at the table, here is how a Boston seller's net proceeds break down, or run your own numbers with the net proceeds estimate.

2. Negotiate a release. Contractors often accept a smaller number or a payment plan in exchange for a clean release. Get any deal in writing, and don't count the lien as gone until the release is recorded.

3. Bond around it. Section 14 of Chapter 254 lets any person in interest dissolve a lien by recording a bond from a surety company authorized in Massachusetts, in a penal sum equal to the lien amount. The lien is dissolved when the bond is recorded, and the contractor can still sue on the bond. A bond costs money and takes time to arrange, so it makes sense when the dispute is real and the amount is large.

4. Challenge it in court. Section 15A lets an owner ask the superior or district court to rule on a lien or discharge it of record, for example if the contractor filed late or claims money you don't owe. That is slower, so it usually pairs with an escrow arrangement at closing so the sale does not wait on a judge.

In a disputed case, sellers and buyers sometimes agree to have the closing attorney hold the disputed amount, often with a cushion above the claim, until the dispute resolves. The buyer's lender and title insurer have to accept that arrangement, and not every one does. Ask your attorney early.

What should you check for liens before you list?

If you did any work over the past two years, run through this before the sign goes up:

Pull every contract, invoice, and proof of payment for the work, including checks and bank statements.
Ask your attorney to search the Registry of Deeds for your address now, before you have an accepted offer and a closing date to protect.
Confirm your contractor was registered as a home improvement contractor when you signed. Under M.G.L. c.142A, the home improvement contractor law protects an "owner" of a pre-existing, owner-occupied building of one to four dwelling units, so registration and a written contract matter if the job goes wrong.
Get final lien waivers or written confirmation that everyone, including subcontractors and suppliers, has been paid.
If a project is unfinished, decide whether to finish it, credit the buyer, or disclose it. The trade-offs are covered in what to fix before selling and what to skip and how repair negotiations after an inspection play out.

Work that was never permitted or never closed out with the city creates a separate problem, and a lien claim can draw attention to it. Open building permits on a Boston home explains how to check. Raise it with your attorney before the buyer's inspector finds it.

When is the best time to deal with a contractor lien?

Before you list. A lien is cheap to fix a month before you list and expensive to fix a week before closing. The best time to find out is before you have a buyer waiting.

If you've done renovation work and want to plan your timeline and your net before you list, Juan Murray offers private, no-pressure consultations. Your attorney handles the legal side; Juan can help you plan the sale around it. Schedule a conversation.

FAQ

Can I sell my Massachusetts house with a mechanic's lien on it?

Not cleanly. A recorded lien clouds your title, and the buyer's lender will require it to be resolved by closing. Most sellers pay it from proceeds at the closing table, negotiate a release, or bond around it.

Can a contractor file a lien after I sell?

The contractor's deadlines run from the last day of work or materials, so a filing can still show up around a closing if the deadline has not passed. The lien attaches to the property as it appears of record when the notice is recorded, so timing matters, which is one reason the attorneys will want to confirm payment and collect lien waivers for recent work before the deed is delivered.

Does a lien mean I owe the full amount the contractor claims?

No. A lien is a claim, not a judgment. You can dispute the amount, the notice, or the timing, and a court or a negotiated settlement can reduce or remove it.

What if my contractor never finished the job?

Document what was done and paid for, and talk to your attorney before you list. You may be able to resolve the dispute, complete the work with another contractor, or credit the buyer.

The bottom line: a contractor's lien is cheap to fix before you list and expensive to fix a week before closing, so search the Registry and collect lien waivers early.

Sources

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About Juan Murray

Juan Murray is a Boston broker associate with more than 30 years of experience helping buyers, sellers, and investors across Greater Boston, personally leading every transaction from the first conversation through closing.

RE/MAX Real Estate Center · (978) 581-0801

Equal Housing Opportunity. Juan Murray is licensed as a Broker in Massachusetts, regulated by the Massachusetts Board of Registration of Real Estate Brokers and Salespersons. This article is general information only and does not constitute legal, tax, or financial advice. Confirm your specific costs and obligations with your closing agent, tax advisor, or lender.