Paralegal Advanced Competency Exam (PACE) Practice Exam

What can a mechanic's lien claimant do if payment is not received?

1. Cancel the construction project

2. Sue to have the real estate sold at auction

3. Place a hold on future contracts

4. Negotiate a payment plan

The correct answer is: Sue to have the real estate sold at auction

A mechanic's lien is a legal claim against a property that has been improved by labor or materials when the contractor or worker has not been paid for their services. If payment is not received, a mechanic's lien claimant has the right to sue to have the property sold at auction. This legal process allows the claimant to seek satisfaction of the debt owed by forcing the sale of the property, and the proceeds from the auction can then be used to pay off the amount owed. This option is rooted in the principles of construction law, where the purpose of a mechanic's lien is to provide a remedy to those who have provided valuable labor or materials and have not been compensated. The lien gives them a priority claim against the property, thereby ensuring that they can recover their payment through the sale of the property if necessary. The other options, while they may seem relevant, do not provide a direct legal remedy available to a mechanic's lien claimant in the event of non-payment. For instance, canceling the construction project does not address the issue of unpaid labor or materials. Placing a hold on future contracts doesn't resolve the current outstanding payment. Negotiating a payment plan may be a potential avenue for resolution but is not an action that specifically takes advantage of the legal rights