An Overview of California Mechanic Lien Law
Mechanic’s Lien Law
- You are hired to provide work or services on a project; 2. You didn’t get paid for that work; 3. You record a mechanic’s lien against the property to act as security for the work you provided; 4. You have to file suit to “foreclose" on the mechanic’s lien, which can ultimately lead to a forced sale of the property to obtain payment for your work.
Who has a right to file a Mechanic’s Lien?
If the work done or materials provided were used to improve real property, the person providing the labor or materials shall have the right to file a Mechanic’s Lien.
Mechanics, materialmen, contractors, subcontractors, lessors of equipment, artisans, architects, registered engineers, licensed land surveyors, machinists, builders, teamsters, and draymen, and all persons and laborers of every class performing labor upon or bestowing skill or other necessary services on, or furnishing materials or leasing equipment to be used or consumed in or furnishing appliances, teams, or power contributing to a work of improvement shall have a lien upon the property upon which they have bestowed labor or furnished materials or appliances or leased equipment for the value of such labor done or materials furnished and for the value of the use of such appliances, equipment, teams, or power whether done or furnished at the instance of the owner or of any person acting by his authority or under him as contractor or otherwise.
California Civil Code Sections 3110-3112.
20 Day Preliminary Notice:
A 20-preliminary notice to the owner, the lender and the general contractor must be given within 20 days of first providing labor, services or materials to the site. However, a person contracting directly with the owner of a property is not required to serve a preliminary notice.
A claimant shall be entitled to enforce a lien only if he has given the preliminary 20-day notice (private work) in accordance with the provisions of Section 3097, if required by that section, and has made proof of service in accordance with the provisions of Section 3097.1. California Civil Code Section 3114
A preliminary 20-day notice shall include:
(1) A general description of the labor, service, equipment, or materials furnished, or to be furnished, and an estimate of the total price thereof.
(2) The name and address of the person furnishing that labor, service, equipment, or materials.
(3) The name of the person who contracted for purchase of that labor, service, equipment, or materials.
(4) A description of the jobsite sufficient for identification.
(5) The following statement in boldface type:
NOTICE TO PROPERTY OWNER
If bills are not paid in full for the labor, services, equipment, or materials furnished or to be furnished, a mechanic's lien leading to the loss, through court foreclosure proceedings, of all or part of your property being so improved may be placed against the property even though you have paid your contractor in full. You may wish to protect yourself against this consequence by (1) requiring your contractor to furnish a signed release by the person or firm giving you this notice before making payment to your contractor, or (2) any other method or device that is appropriate under the circumstances. Other than residential homeowners of dwellings containing fewer than five units, private project owners must notify the original contractor and any lien claimant who has provided the owner with a preliminary 20-day lien notice in accordance with Section 3097 of the Civil Code that a notice of completion or notice of cessation has been recorded within 10 days of its recordation. Notice shall be by registered mail, certified mail, or first-class mail, evidenced by a certificate of mailing. Failure to notify will extend the deadlines to record a lien.
California Civil Code Section 3097
The Preliminary 20-day Notice must be served by personal service or by certified or registered mail, return-receipt requested and be accompanied by a “Proof of service affidavit".
California Civil Code Section 3097.1
Timing for Filing Notice of Mechanic’s Lien:
Original contractor, either:
(a) within 90 days after the completion of the work of improvement as defined in Section 3106 if no notice of completion or notice of cessation has been recorded, or
(b) 60 days after recordation of a notice of completion or notice of cessation.
California Civil Code Section 3115
All claimants other than original contractor, in order to enforce a lien, must record his claim of lien after he has ceased furnishing labor, services, equipment, or materials, and before the expiration of:
(a) 90 days after completion of the work of improvement if no notice of completion or cessation has been recorded, or
(b) 30 days after recordation of a notice of completion or notice of cessation.
California Civil Code Section 3116
Requirements for Valid Mechanic’s Lien:
The necessary information required on the recorded lien is as follows:
- A statement of the claimant's demand after deducting all just credits and offsets. 2. The name of the owner or reputed owner, if known. 3. A general statement of the kind of labor, services, equipment, or materials furnished by the claimant. 4. The name of the person by whom the claimant was employed or to whom the claimant furnished the labor, services, equipment, or materials. 5. A description of the site sufficient for identification.
Prior to recording the mechanic’s lien, the mechanic’s lien and a “Notice of Mechanic’s Lien" must be served on the owner, or if unable to do so, then on the lender or the general contractor. Failure to serve the mechanic’s lien with the required Notice of Mechanic’s Lien, shall cause the mechanic’s lien to be unenforceable as a matter of law.
Civil Code Section 3084
The wording of the “Notice of Mechanic’s Lien" is as follows:
NOTICE OF MECHANIC’S LIEN ATTENTION!
Upon the recording of the enclosed MECHANIC’S LIEN with the county recorder’s office of the county where the property is located, your property is subject to the filing of a legal action seeking a court-ordered foreclosure sale of the real property on which the lien has been recorded. That legal action must be filed with the court no later than 90 days after the date the mechanic’s lien is recorded. The party identified in the mechanic’s lien may have provided labor or materials for improvements to your property and may not have been paid for these items. You are receiving this notice because it is a required step in filing a mechanic’s lien foreclosure action against your property. The foreclosure action will seek a sale of your property in order to pay for unpaid labor, materials, or improvements provided to your property. This may affect your ability to borrow against, refinance, or sell the property until the mechanic’s lien is released. BECAUSE THE LIEN AFFECTS YOUR PROPERTY, YOU MAY WISH TO SPEAK WITH YOUR CONTRACTOR IMMEDIATELY, OR CONTACT AN ATTORNEY, OR FOR MORE INFORMATION ON MECHANIC’S LIENS GO TO THE CONTRACTORS’ STATE LICENSE BOARD WEB SITE AT www.cslb.ca.gov.
A “proof of service affidavit" is required to be recorded with the mechanic’s lien to prove that service of the lien and Notice was made. Generally, service must be done by registered mail, certified mail, or first-class mail, evidenced by a certificate of mailing, postage prepaid.
A Mechanic’s Lien must be filed in the County Recorder’s Office for the county in which the project is located.
Timing to File an Action to Foreclose on a Mechanic’s Lien:
A Complaint to Foreclose a Mechanic’s Lien (legal perfection of a Lien) must generally be filed within 90 days unless the lien claimant grants a properly recorded extension of credit to the property owner. The Complaint must be filed in the proper judicial district in which the property is located.
California Civil Code Section 3144
A lis pendens (notice of pendency of action) must be recorded with the county recorder within 20 days of filing the foreclosure lawsuit.
After the filing of the complaint in the proper court to foreclose on the mechanic's lien, the plaintiff shall record in the office of the county recorder of the county, or of the several counties in which the property is situated, a notice of the pendency of the proceedings, as provided in Title 4.5 (commencing with Section 405) of Part 2 of the Code of Civil Procedure on or before 20 days after the filing of the mechanic's lien foreclosure action. Only from the time of recording that notice shall a purchaser or encumbrancer of the property affected thereby be deemed to have constructive notice of the pendency of the action, and in that event only of its pendency against parties designated by their real names.
California Civil Code Section 3146
The claimant shall, prior to recordation of the notice, cause a copy of the notice to be mailed, by registered or certified mail, return receipt requested, to all known addresses of the parties to whom the real property claim is adverse and to all owners of record of the real property affected by the real property claim as shown by the latest county assessment roll. Immediately following recordation, a copy of the notice shall also be filed with the court in which the action is pending. Service shall also be made immediately and in the same manner upon each adverse party later joined in the action.
California Code of Civil Procedure Section 405.22