A mechanic’s lien is a legal document filed against a property by a person or entity that provided materials or services for improvement of the property and were never paid. This includes contractors, subcontractors, and suppliers. Once filed against the property in question, the lien protects their right to be paid, negotiate a settlement, or foreclose on it.
For example, if Joan Smith hires a contractor to build her new home and refuse to pay after he fulfills his end of the contract, he can both sue her for breach of contract and file a mechanic’s lien on the home. The lien laws hold the property owner responsible for all necessary payments, so even if Joan pays the general contractor and he fails to pay his subcontractors and suppliers, the latter can file a lien against her property, essentially forcing her to pay twice for the same job.
Once a lien is filed, it can create a wide range of problems for the property owner as long as it remains unpaid. These issues include:
- A cloud on the property title, which can impact one’s ability to refinance, borrow against, or sell the property
Filing a Mechanic’s Lien in California
California construction law contains strict provisions that must be followed in order for a mechanic’s lien to be valid. At the very least, it needs to contain the following:
- Property details, such as the name of the owner and the street address.
- A Statement of Demand that names the owner or party who did the hiring, describes the services or materials provided, and demands a specific amount of money.
- An Affidavit of Service specifying who was served with notice of the lien and how (e.g. personally, by mail or by publication).
The lien must be recorded at the county clerk’s office within 60 days of filing the Notice of Completion or Cessation or, if neither was filed, within 90 days after work was completed.
The law also specifies that if the party seeking the lien did not contract directly with the property owner, they must send preliminary notices to the following by certified mail within 20 days after first providing labor or materials.
- The property owner
- The primary contractor
- The lender (if applicable)
Furthermore, the wording in the notice must precisely match the language in the statute.
Mechanic’s liens generally take priority over any other claims made after work commenced or were unrecorded at the time work started, but it’s a complicated issue, especially if the conflicting claim is a tax lien or subordinate deed of trust. This is why anyone planning to file or defend themselves against a mechanic’s lien should consult with a California construction attorney to determine the best course of action.
At Adler Law, we have years of experience in filing, enforcing, and defending against mechanic’s liens in California. Whether you are a subcontractor seeking what you are legally owed or a property owner who thought they had fulfilled their payment obligations, we are here to serve you. To schedule a consultation and case review, please contact us today.