Jeff entered into a building contract with Mike under which Jeff agreed to construct a garage on Mike's lot for $60,000.Lumber Supply Company supplied the lumber at Jeff's request,but when Jeff failed to pay for the material within a few weeks after it was supplied,the Company filed a construction lien for $30,000 against Mike's property.When Mike is notified of the registration of the lien,he must hold back the amount of the lien,or whatever funds he has in his hands at the time,if they should be less than the amount of the claim.

Question

Quizplus · Accepted Answer

This is true under the mechanics lien laws, which allow the supplier of materials to place a lien on the property where the materials were used if the contractor fails to pay for them. When the property owner is notified of the lien, they are required to hold back the amount of the lien from any funds they may owe the contractor.

Jeff Entered into a Building Contract with Mike Under Which