How to Record a Mechanics' Lien in California
Posted in Construction / Development. Jurisdiction: California
If you are a contractor, material supplier, subcontractor or laborer, here is how to record a Mechanics' Lien in the State of California.
1
Check Your RecordsAssemble your contract, payment records, and change orders. Check to make sure that you sent out a twenty-day preliminary lien notice if you are not in direct contract with the Owner of the project (i.e., a subcontractor or a material supplier to the Prime Contractor or a subcontractor). You need to get the name of the Owner, the property address where the project is, the name of the lender, if any, the amount of your contract, the amount you have been paid, and the amount of your lien. You also want to check your contract to see if there is any provision for payments of interest on any outstanding balance. 2
Check the ProjectYou can only record a mechanics' lien on private projects. You cannot record a mechanics' lien on a public works project. You also cannot record a mechanics lien until your work on the project is completed. If your work has not been completed, consider filing a stop notice. A mechanics' lien has strict recording deadlines that are tied to the date of completion of the project. Where there has been no recorded notice of completion, the deadline is 90 days from the date of completion. If a Notice of Completion is timely recorded, then the deadline is reduced to 60 days for those in direct contract with the Owner, and 30 days for all other claimants. When in doubt, go ahead and get the lien recorded. Notices of Completion are often found to be invalid because they were recorded at the wrong time. 3
Fill Out the Mechanics Lien FormGet a mechanics' lien form from a construction publisher, such as BNI. Many of these forms are available on the Internet. (See link below to BNI Books.) Be sure to use a California State form. Do not use a "50 State" form. The form will have you fill out the name of the owner, the project address, the construction lender, a description of the work you contracted to perform, and the amount of your lien. Be sure to sign the form in two places. One is a signature, and the other is a verification. Someone who is an officer or manager in the Company should sign the form. Do not overstate the amount of your lien, or you may lose your right to assert a lien. 4
Record Your LienThe mechanics' lien needs to be recorded in the County in which the property is located. You can call a title company and ask for customer service to obtain help concerning which County the property is located by asking for a Property Profile. Because mechanics' liens are time sensitive, it is always a good idea to go to the County Recorder's office yourself to make sure the lien gets recorded. Be sure to bring your checkbook, because the Recorder will charge a fee for recording the lien. You will get a stamped copy of your lien. A copy will be sent by the Recorder to the Owner. Don't let anyone try to get you to put off recording your lien. An agreement to extend the time for recording a lien is not valid. 5
Keep Aware of Your DeadlinesOnce you have timely recorded a mechanics' lien, you have no more than 90 days in which to file a lawsuit to foreclose on the lien. After 90 days, your lien is no good. Be sure to contact the people who have control over the money on the project, such as the Contractor, Owner and Lender to find out why you have not been paid. If you need more time before filing a lawsuit, you can record an agreement called an Extension of Credit to give you more time before you have to file a lawsuit. Usually, it is better to just get the lawsuit on file. Be sure to give your lawyer at least a couple weeks to prepare the lawsuit before the deadline. If you wait until the last minute, you increase the chances that a mistake will be made or a deadline missed. Good Luck! Additional ResourcesCalifornia Mechanics' Liens and Related Construction Remedies, Continuing Education of the Bar. Available at most law libraries. California Lien Law & Collection Procedures, 5th Edition, available at Builders Booksource in San Francisco and Berkeley.
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