It is not always easy to get the gold you have earned in Golden State. California, like all other states, has mechanics lien laws to help builders and suppliers like you get paid. Like all other states, California’s mechanics lien law is confusing and complex. So, you need to know how the law works so you can file a reasonable lien and protect your right to be paid. Here are 5 things you need to know about California’s mechanics lien law in order to 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.
NOTICE OF RIGHT TO LIEN
Your first step in protecting your lien is to file a notice of your lien asking the lien to be, commonly referred to as the “Preliminary Notice”. It should be serviced by 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 starting 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 sent by registered mail, requesting a return of the receipt or personally sent to each party. If you are filing for a lien 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 under California Civil Code Section 8202 Chapter 2. The language in the notice must exactly match the language in the policy.
Preparing the Lien
Any lien in California must include the name of the owner, a general description of the property and location, the name of the tenant, a description of the work performed and the amount owed. The lien must also include the required statutory statement in California Civil Code Section 8416 Chapter 4.
See also: What Does a Real Estate Attorney Do?
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 on project 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. Lien must be lodged at the county recorder’s office in the county where the property is located. A lien can be sent by registered mail, requested to be returned a receipt or personally served to each party. If you are filing for a mortgage you will need to provide proof of this service by affidavit and proof of mail delivery.
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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