In 2010, my parents paid a builder to add an addition to their house. My parents paid the builder in full for the project, but the lumber company was not paid bt the builder. The builder subsequenlty placed a lien on their home and they are now unable to refinance.

What options to my parents have? Can the lien be removed legally?

Unfortunately the only thing they can do is pay the person who placed the lien and then sue the builder for that amount.

If it's possible they should increase the amount of money they're getting from the lender and have the lien paid as part of the refinancing. That way they'll only be paying interest on the lien amount rather than paying all of it out of their pocket. Then they can sue the builder for the lien amount plus the interest they had to pay on it.

... the lumber company was not paid bt the builder. The builder subsequenlty placed a lein on their home ...

The builder liened the property or was it the lumber company? If the lumber company was not paid, I would think it filed the materialman's lien.

At any rate, mechanics and materialmens' liens frequently, depending on the state, only last for a limited amount of time. If the lienor fails to bring suit within so many days or months, the lien is ineffective. What state is the property in?