Contractors are prohibited from filing mechanic’s liens on public projects like highways, schools or fire stations, as this would lead to public real estate foreclosure. Instead, they are offered alternative security in a performance bond as a guarantee against the failure of the other party to meet the contract obligations.
Why it matters: Understanding the prohibition of mechanic’s liens on public projects and the role of performance bonds is important for contractors to secure their financial interests and ensure fulfillment of contractual obligations.
