California Mechanics' Lien Laws
Recording of a Mechanics’ lien can be a very effective way of ensuring payment from an owner for anyone providing either services or supplying material for a work of construction, or of improvement to real estate. If executed correctly, a Mechanics’ Lien can ensure that the owner cannot sell or refinance the property without first paying off the debt that is being secured by the lien. Therefore, it can be a great motivator to the owner to ensure payment to all general contractors, subcontractors, and material suppliers. However, there are specific requirements, and deadlines that must be met in order for it to be lawfully enforceable. In this article, we will attempt to answer some of the most common questions our clients pose to us when it comes to California regulations governing Mechanics’ Lien laws.
1. Who can record a Mechanics’ Lien?
The short answer is anyone who has provided services for a project, or a claimant as defined by California Civil Code Sections 8004, 8024, and 8400-8404. In general terms a claimant can be be either a general contractor who is defined as someone who directly contracts with an owner of a project, or subcontractors who work on behalf of, and under the orders of the general contractor. It can also be anyone who is supplying material, or any other type of labor to a work of improvement.
2. Do I need to give notice to the owner before recording a Mechanics’ Lien on the property?
It depends on whether you are a general contractor of the project, or a subcontractor. Generally a general contractor whom contracts directly with the owner of the project does not need to give notice to the owner before being able to record a Mechanics’ Lien, however they may need to give notice to the construction lender of the project, if any. Under California Civil Code Section 8410, claimants such as subcontractors whom do not directly contract with the owner, do need to give a 20 day preliminary notice to the general contractor, the owner of the project and if applicable in the situation to any construction lenders involved with the project. This preliminary notice is a prerequisite to the enforcement of both Mechanics’ Liens and stop payment notice rights.
3. What are the time limits if any?
Preliminary Notice: Generally, preliminary notice must be filed within 20 days after the claimant has first started work on a work of improvement. However, a claimant may not barred just because they failed to take this crucial step. Please contact our office for more clarification on this matter.
Recording a Mechanics’ Lien: Typically, a claimant has either 90 days after the work of improvement is finished, or 60 days if the owner records a notice of completion.
4. Is it enough to just record a Mechanics Lien?
No. You have to take steps to actually enforce it. If no steps are taken, not only will the lien be ineffective, and invalid but in the event that the owner has to release the lien, you may also be liable to pay the owner’s attorney fees and costs.
Sara F. Zahbihi is a founding partner at Zahbihi & Watkins Law Firm, APC. Sara has over a decade of hands on experience in the construction industry, and is competently experienced with the California State Licensing Board (CSLB).
The information in this article do not constitute legal advise. Although every effort is made to maintain this article current, Zahbihi & Watkins Law Firm, APC cannot be held liable for any information provided here that may be not fully reflect the change in law. Please see our full legal disclaimer.