California’s mechanics lien law is confusing and complex. So, you need to know how the law works so you can file an enforceable lien and protect your right to be paid. Here are 5 things you need to know about California’s mechanics lien law to help you successfully file your next lien.
WHO CAN FILE
In general, anyone providing materials or services during construction can apply for a mechanics lien. This includes design professionals and engineers but their rules for submitting mechanical property guarantees are different from those explained below, and are beyond the scope of this post.
NOTICE OF RIGHT TO LIEN
Your first step in protecting your lien is to provide notice of your lien and requesting that the lien be repaid, commonly referred to as the “Preliminary Notice”. It should be served on the owner (and general contractor, unless you are working directly for a general contractor.) If the owner receives a loan to finance the project, you must also notify the building lender.
This notice must be sent within 20 days of starting work or the start date for supplying materials to the project. If you miss the 20 days, you can still submit a late notice, but only money earned during the previous 20 days will be counted toward your lien.
Notice can be served by registered mail, requesting a return of the receipt or personally sent to each party. When you file for a lien (see below) you will need to provide proof of this service by affidavit and proof of mailing. The notice must include a description of the work or merchandise you will provide, the estimated total cost of the work or merchandise you will provide, and the mandatory statements set forth in California Civil Code Section 8202 Chapter 2.
FILING AND SERVING THE MECHANICS LIEN
According to California mechanics lien law, you have 90 days from the last day you performed work or delivered goods to file your mechanics lien. However, if an owner submits a completion or decommissions notice to indicate a project has stopped, you only have 60 days from the date of filing that notice to file your lien. he lien must be filed with the county recorder’s office in the county where the property is located. Once filed, the lien must be served on the interested parties by registered mail, return receipt requested, or personally served to each party.
Even if you do not plan to foreclose on the lien, (perhaps to give the owner additional time to pay or for whatever reason), it’s best to go through the entire procedure. Even if circumstances change, it may be too late to act in compliance with California’s mechanics lien laws. If the payment discussions break down or your client seems insolvent, then your vigilance will make it possible to recover your collateral. Property owners and competitive creditors may try to block your path, but if you obey the law, you will put yourself in a strong position against your adversaries.
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