Hello Everyone, I am a law student in CT interested in construction law and have been researching mechanic's liens. I have seen it referenced that some states prohibit assignment of said liens in articles posted on Levelset, but have failed to find any statutory language which explicitly prohibits them. Several states have no reference to assignment in their mechanics lien statutes at all. Is there a state which does not allow for assignment of a perfected mechanic's lien? Thank you for your time and effort. Levelset has been my go to for all construction research.
Liens are created by contract, statute, common law or at equity. Check out Wikipedia article on “Liens.” I have been practicing for many years and had no idea that there are so many different types of liens. So, on the issue of assignability, one must look at case law in each particular jurisdiction to appreciate the source of the authority that permits assignments. In Connecticut, a construction or mechanic’s lien is created by statute rather than by agreement. And, as you aptly noted, whether a mechanic’s lien is assignable is determined state by state. On the other hand, mortgages are created by contract and, like contracts in general are assignable as a matter of right unless expressly prohibited in the mortgage deed. And then, the restrictions of assignability must be met. And then there are judgment liens that are a creature of statute as are tax liens. As it relates to a tax lien on real property, under CGS § 12-195h, a municipality may assign, for consideration, any liens filed to secure unpaid taxes on real property so long as it is authorized by resolution of the municipality's legislative body with the consideration to be received by the municipality to be negotiated between it and the assignee.
In answer to your direct question, I am not aware of any state that expressly prohibits the assignment of mechanics liens outright but the best way to find out is to do