Escrow & Title
In Illinois, what is a 'mechanic's lien' and how does it affect a real estate closing?
AA lien placed by automobile dealers; does not affect real estate
BA claim against property by contractors or suppliers who provided unpaid labor or materials for improvements✓ Correct
CA government lien for unpaid property taxes
DA mortgage lien held by a commercial bank
Explanation
A mechanic's lien (also called a construction lien in some states) is a claim against property by contractors, subcontractors, or material suppliers who were not paid for work or materials provided to improve the property. In Illinois, mechanic's liens must be addressed before closing because they can cloud title. Sellers typically must pay off mechanic's liens at closing.
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