A subcontractor performed $15,000 worth of electrical work but was not paid by the general contractor. If the subcontractor files a mechanics lien and the property sells, what is their priority position for payment?
Correct Answer
C) First, ahead of mortgage holders
Alabama mechanics liens have priority over most other claims, including mortgage holders, provided they are properly filed and perfected.
Why This Is the Correct Answer
Under Alabama lien law, properly filed and perfected mechanics' liens generally have priority over mortgage holders and most other creditors when the lien relates to improvements made to the property. This 'super-priority' is one of the main reasons the lien remedy exists — to protect those who improve property from losing out to lenders.
Why the Other Options Are Wrong
Option A: Third, after all existing mortgages
Third, after all existing mortgages is incorrect. Mechanics' liens in Alabama are not subordinate to all existing mortgages; they can take priority over mortgage holders, particularly for work performed after the mortgage was recorded or in certain statutory priority schemes.
Option B: Last, after all other creditors
Last, after all other creditors is the opposite of the truth. Mechanics' lien statutes are specifically designed to elevate contractors' payment priority, not to place them at the back of the line.
Option D: Second, after first mortgage only
Second, after first mortgage only is a partial truth that understates lien priority. While mortgage priority interactions can be complex, Alabama mechanics' liens — when properly perfected — can take priority ahead of even first mortgage holders for the work performed.
Memory Technique
Mechanics built the value — they get paid first. Think 'mechanic > mortgage.' The person who added value to the property stands at the front of the payment line, ahead of the bank that lent money on it.
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A material supplier files a mechanic's lien 95 days after last furnishing materials. The project was substantially complete 85 days ago. Is this lien valid under Alabama law?
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