A contractor in Alabama completes $85,000 worth of work on a commercial project. The contract amount was $92,000. If the contractor files a lien claim, what is the maximum amount that can be claimed under Alabama lien law?
Correct Answer
A) The unpaid balance only
Under Alabama lien law, a contractor can only claim a lien for the unpaid balance of work actually performed, not the full contract amount or completed work value.
Why This Is the Correct Answer
Option A is correct. Under Alabama lien law, a contractor's lien is limited to the unpaid balance — the amount actually owed and not yet paid. The lien does not cover the full value of work completed or the full contract price. If the owner has already paid some portion, the lien can only secure what remains unpaid. This prevents contractors from obtaining lien protection for amounts already collected.
Why the Other Options Are Wrong
Option B: $85,000 plus interest and attorney fees
$85,000 plus interest and attorney fees is not the standard measure for the lien amount itself. While interest or attorney fees may be recoverable in litigation, they are not part of the lien amount calculation under Alabama lien law.
Option C: $85,000
$85,000 represents the value of work completed, not the unpaid balance. If any payments have been made against the $92,000 contract, the lien amount would be less than $85,000. Claiming the full completed work value could result in a lien larger than what is actually owed.
Option D: $92,000
$92,000 is the total contract amount, which includes both paid and unpaid portions. A lien for the full contract amount would overreach — a lien can only secure what remains unpaid, not the entire contract.
Memory Technique
A lien is like a security deposit on a debt. You can only secure what you are owed. If you have already been paid $30,000 of a $92,000 contract, you can only lien for the remaining $62,000 — not the full amount. 'Lien = Unpaid Balance Only.'
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