A lien is a financial claim by one person or company against the property of another person. Liens are commonly used in both the automotive and real estate industries and are often used by lenders to secure their property. Mechanic's liens are a specialized type of lien that is usually field by contractors. In a mechanic's lien, contractors create a debt against a property for their work. As an example, consider the purchase of a new home. You are approved by a local lender for a mortgage that covers the $100,000 purchase price of your new apartment. There is a small hitch because the lender needs to secure the loan. In order to do this, the lender files a lien against the property. The lien is usually filed in the local courthouse where the property is owned and creates a financial encumbrance. Before you sell your home, you must first satisfy the lien.