# Mechanic’s Lien

Canonical URL: https://fundmyequipment.com/learn/glossary/mechanics-lien/
Last modified: 2026-05-29T19:39:17+00:00
Type: efin_glossary

## Summary

Lien filed by a contractor or repair shop for unpaid services on equipment.

## Content

Mechanic's lien (sometimes called "artisan's lien" or "repairman's lien") is a state-law lien filed by a service provider on equipment they worked on, when the bill goes unpaid. Most states allow mechanics, repair shops, body shops, and similar service providers to lien titled vehicles and some other equipment.
How mechanic's liens work

Service provider performs work on equipment (repair, parts, labor)
Customer fails to pay the bill
Service provider files a mechanic's lien with the appropriate state agency (DMV for titled, county recorder for some equipment)
The lien sits on the equipment's title or in UCC records
If not paid, the service provider can foreclose on the lien and sell the equipment to satisfy the debt

How mechanic's liens affect equipment financing
Mechanic's liens can have priority over earlier UCC-1 filings in some states. This is one of the few situations where a later-filed lien can leapfrog an existing senior lien. Specifically:

State law varies. Some states give mechanic's liens "super-priority" status
Most equipment lenders require borrowers to notify them of any mechanic's lien claims
Unresolved mechanic's liens can trigger default on the equipment loan (under common loan covenants)

For borrowers

Pay equipment-service bills promptly to avoid mechanic's liens
If a service provider files a lien, contact your equipment lender immediately (it's a covenant default trigger; proactive communication preserves goodwill)
Dispute incorrect liens through state-law procedures (most states allow contest within 30-60 days)
If a legitimate lien exists, work out a payment plan with the service provider; many will release the lien on receipt of payment or signed payment agreement

For lenders
Equipment lenders typically:

Require borrowers to maintain equipment in good repair and pay service providers timely (loan covenant)
Monitor for mechanic's lien filings on titled collateral
Require notification of any unpaid invoices over a threshold (typically $500-$2,000)
May pay off small mechanic's liens directly to protect collateral, adding the cost to the borrower's loan balance