How to do a mechanic's lien California -- the three basic requirements
How To Do A Mechanic's Lien California is written by Dave Barnier Esq. (construction attorney) and Diane Dennis (webmistress of this website, not an attorney).
The 3 basic requirements for how to do a mechanic's lien in California. Miss just 1 of these 3 requirements and you could a) lose your right to lien and b) get SUED for placing a lien. Learn the right way to preserve, maintain, and enforce your mechanic's lien rights for California projects.
Step one for how to do a mechanic's lien in California
Preserving your lien rights by serving a California 20-day preliminary notice
The notice MUST be served by the lien claimant (unless the lien claimant was hired directly by the property owner, in which case the contract between the claimant and the property owner serves as the notice) or the lien claimant will not have any lien rights.
The notice should be served no later than 20 days after the lien claimant first provides any benefit to the property, because the notice preserves lien rights for no more than 20 days prior to the date the notice is served through the completion of the contract.
If this deadline is not met, the preliminary notice should still be served as soon as possible thereafter, as the preliminary notice will still preserve lien rights for all benefits provided starting with the day that fell 20 days prior to the date of service of the preliminary notice.
As a side note: Per Civil Code Section 3097(h), if the contract price to be paid to any subcontractor on a particular work of improvement exceeds four hundred dollars ($400), the failure of that contractor, licensed under Chapter 9 (commencing with Section 7000) of Division 3 of the Business and Professions Code, to give the notice provided for in this section, constitutes grounds for disciplinary action by the Registrar of Contractors.)
Step two for how to do a mechanic's lien in California
Maintain your lien rights by recording the California mechanic’s lien
A mechanic’s lien cannot be recorded until the claimant has completed all work under the subject contract. This means either providing the entire scope of work or being excused from remaining work due to a breach of the contract by the party with whom the claimant contracted (although care should be taken before recording a lien based upon an argument that this party has breached the contract).
The earliest date the lien can be recorded is the day on which the subcontractor completes his/her own scope of work. The latest date is a day 30, 60 or 90 days after the entire work of improvement is completed. Sometimes there will be many months between these two dates.
If multiple properties are improved, the deadline is calculated based upon the completion of work on each individual property.
In all instances, if the owner or the owner’s agent records a valid notice of completion within 10 days after the date of actual completion of the work of improvement, the 90-day deadline is shortened to 30 days from the date of the recording of the notice of completion for subcontractors/suppliers and to 60 days from this date for prime contractors.
The mechanic’s lien must be recorded with the County Recorder within the County in which the improved property is located.
Step three for how to do a mechanic's lien in California
Enforcing your mechanic's lien rights by filing a lawsuit to foreclose on the mechanic’s lien
A lien foreclosure lawsuit cannot be filed in small claims court.
All parties claiming any interest in the property must be named in the lien foreclosure lawsuit, although at the time of filing of the lawsuit, only those parties known by the lien claimant to claim an interest in the property must be named. This can include contractors, subcontractors, suppliers and/or service providers that have recorded mechanic’s liens as well as anyone that’s recorded a lien of any kind, including judgment liens, mortgages, etc.
Lien foreclosure lawsuits are tricky and an attorney should be retained to file the lawsuit. An attorney should be given at least 14 days to prepare and file a lien foreclosure lawsuit.
If the 90 days goes by without a lien foreclosure lawsuit being filed, the lien is null and void, but a new lien may be recorded if the new lien would be timely (i.e., recorded within 30/60/90 days of the date of completion of the work of improvement(s) - 90 days if the owner or owner’s agent does not record a valid notice of completion within 10 days after the date of actual completion of the work of improvement, shortened to 30 days for subcontractors/suppliers and to 60 days for prime contractors if the owner or the owner’s agent does record a valid notice of completion within 10 days after the date of actual completion of the work of improvement.).
The above article was written by Attorney David Barnier of Barker Olmsted & Barnier in San Diego, and Diane Dennis (mistress of this website, not an attorney).
Disclaimer: The information in the above article is based upon California law and is provided for general information, only. The information provided illustrates laws and legal principals in general. Any information or analysis presented in the article is intended solely to educate the reader on general issues. A comprehensive review of facts, documents, and applicable laws is always required before any attorney can competently provide any legal advice regarding any particular situation. In short: Please do not rely on any part of this article when analyzing any specific situation affecting you or your business. Please do retain an attorney to obtain professional advice for your specific situation.
David J. Barnier Esq.
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