Despite its name, a mechanic’s lien is generally utilized by any supplier, contractor, laborer, and/or subcontractor. If you worked on someone’s home, for instance, and were not paid, you can then file a mechanic’s lien.
This is essentially a “hold” against the business, commercial, or homeowner’s property. Although this can result in foreclosure if the owner doesn’t pay, the most common result is a recorded lien on the property.
The following step-by-step process will ensure that your mechanic’s lien is filed accurately and efficiently. In turn, this will support a more desirable end result.
Who Can File for Mechanic’s Lien?
Generally speaking, any person or entity who provides a service (or supplies materials) during a contracted job is eligible to file a mechanic’s lien. This includes everyone who is a subcontractor, an equipment lessor, laborer, contractor, or material supplier, as well as design professionals.
Eligibility is outlined in California Civil Code § 8400 – 8400. However, regardless of eligibility, there are legal procedures in place to ensure that filing is completed properly.
The Complex Lien Timelines and Rules In the State of California
As California’s population continues to rise, contractors are able to maintain a steady stream of construction work across commercial and residential sectors. As the demand grows, more contractors need to be aware of their legal rights if left unpaid for their work.
When filing a mechanic’s lien, different requirements apply to each state. In California, there are time limits based on a number of variables. These include whether or not you are a direct contractor (in comparison to say a supplier or subcontractor), and whether or not a valid notice of completion was recorded.
In the case that a valid notice of completion has been recorded with the County Recorder, the prime contractor has 60 days after the recorded date to record a mechanic’s lien. If no such notice exists, contractors, suppliers, and subcontractors alike have 90 days after work on the project is completed to record a mechanic’s lien.A preliminary notice is also required within 20 days after the job in-question began, which is outlined below. Please also familiarize yourself with California Civil Code sections 8412-8414, which summarizes legislation in regards to a valid notice of completion. In this case, a mechanic’s lien must be recorded within 30 days.
Steps to Take When Planning to File a Mechanic’s Lien
Step one: Properly record breaches of contract
Before filing a mechanic’s lien, it is critical that you understand the associated provisions. That way, you can effectively record and document all supporting information. For example, record the property information and statement of demand (i.e. the work performed, the hiring party, etc.) Tip: When completing any job which is under contract, keep notes regarding the work performed. The more detail you include the better (i.e. how many hours worked, timelines, unexpected issues, etc.) As long as the quality of work provided is not in question, your notes regarding the initial breach of contract will significantly support your claim.
Step two: Send preliminary 20-day notice
If you were not paid-in-full for your labor or materials but were not the primary contractor, you will need to send a preliminary notice within twenty days of the commencement of work on the property in question.
In this case, you will need to send a notice to all parties involved, including the lender (if one exists), the property owner, and the primary contractor. Also, if you provide work or supplies to more than one contractor/subcontractor, you must create separate preliminary notices. Tip: Please ensure the language used in your preliminary notice matches the language in the statute. This will significantly reduce your risk of termination, as the judge may throw out the inaccurate notice.
Step three: File lien with a recorder’s office
Before filing your lien, be sure to consult the recording office you will be dealing with. Each office (within varying counties) has their own unique requirements and relevant procedures. Unfortunately, many filers experience rejection (often several times) based on a lack of due diligence.
Most often, a lien is rejected because it contains typos, is missing relevant content, is accompanied by insufficient payment (for the filing fee), and is incorrectly formatted. You must also have a proof of service affidavit or you will risk voiding your mechanic’s lien.
As stated in Civil Code section 8416 (a), in addition to an affidavit, a lien must contain:
- (1) A statement of the claimant’s demand after deducting all just credits and offsets.
- (2) The name of the owner or reputed owner, if known.
- (3) A general statement of the kind of work furnished by the claimant.
- (4) The name of the person by whom the claimant was employed or to whom the claimant furnished work.
- (5) A description of the site sufficient for identification.
- (6) The claimant’s address
Step four: File a lien cancellation if payment is collected
In most cases, the simple act of filing a lien results in payment. After all, most parties will want to resolve the dispute as soon as possible, without needing to go to court. If you have received payment, you must release the lien. This will prevent future complications in relation to attorney fees, additional court costs, and possible statutory penalties.
Once the funds have cleared your bank account (or you have received certified funds), you can then have the lien removed. The process to release a lien is similar to that of filing a lien. Please note, you will need to complete this process in the same office in which you originally filed the lien.
Step five: Prepare for legal action/lawsuit if unpaid
Unfortunately, you may face obstacles in that your customer does not want to pay. Some may acknowledge your lien and refuse payment, while others may ignore you completely. In this case, you will need to take further action.In California, you will have a 90-day window to file suit from the date in which your lien is filed. This will prevent expiration. After the 90-day period, if your lien is not extended upon or is not foreclosed, it will become void. To enforce a lien (due to non-payment), you will need to file a lawsuit.If you are in need of legal advice or assistance, please contact the Mellow Law Firm today. We will help you obtain the money you are entitled to based on the work you provided.