What type of encumbrance is created when a construction company files a lien for unpaid work?

A mechanic's lien is a specific type of encumbrance that is placed on a property when a construction company or contractor is not paid for their work. This lien gives the contractor a legal claim to the property, which allows them to seek payment for services rendered in connection with construction or improvement projects.

The purpose of a mechanic's lien is to protect contractors and subcontractors by ensuring they are compensated for the materials and labor they provided. If the property owner fails to pay for the work, the contractor can enforce the lien, which may involve foreclosure on the property in order to recover the payment owed.

In contrast, other types of liens, such as a mortgage lien, involve loans secured by real property where the lender has a claim in case of default. A judicial lien arises from a court judgment against a property owner, while a statutory lien is created by statute, such as property taxes owed. Mechanic's liens, however, are specifically related to construction services, making them the correct choice for this question.