How to File a Mechanics Lien in California
More often than not, when a contractor or subcontractor provides labor for another party, they end up not getting paid for their work. This is when learning how to file a mechanics lien in California becomes useful.
Read on here about the process.
Introduction
When you walk into a grocery store and fill your cart with items for dinner, do you just walk out? Absolutely not. The grocery store sells the food and you pay for it. When you go to the mechanic and get your oil changed, do you drive away without paying? No way. The mechanic performed a service – and gets paid for it.
It only makes sense that when a contractor, subcontractor, or laborer performs a job or a material supplier supplies the tools for that job, they get paid, right?
Unfortunately, time and time again, jobs get done and compensation is never received. Whether it is for the whole job or just a portion, the balance due needs to be paid. But where do you turn when this happens?
This is where a mechanics lien can help.
What is a Mechanics Lien?
A mechanics lien is like a hold against the property where the work was done, turning the property into collateral. And it is recorded within the county recorder’s office. This lien on the property is usually all that is needed to get a quick response – in the form of payment – from the property owner. Sadly, though, this is not always the case.
A mechanics lien entitles you to further action in an attempt to receive compensation for the job you did. For example, with this lien, a foreclosure could be filed on the property. Of course, this is something you would want to consult an attorney for. Also, the title to the property will reflect the recorded lien, meaning that the owner cannot refinance the property or sell the property without paying off the lien.
The idea behind the mechanic’s lien is to ensure that payment is made for work done.
When to File for a Mechanics Lien
Filing a mechanics lien isn’t something you do frivolously. In other words, you can’t finish the job on Monday and file for the lien on Tuesday. You have to wait and give time for the amount due to be paid. In California, the law states that you can file the mechanic’s lien 90 days after the completion of the job. However, there are instances when the property owner may file what is known as a Notice of Cessation or a Notice of Completion. If this is done, you may be able to file within 60-days or 30-days from the date of its recording.
It is best to seek the guidance of an attorney if you have any questions about filing. Not waiting the appropriate amount of time could disrupt the entire process. On the other hand, waiting too long to file may invalidate the claim.
Filing a Mechanics Lien, Step-By-Step
When you are ready to file a mechanic’s lien, the process is easy as long as you follow the steps required. If the appropriate amount of time has passed and you know that you are eligible to file the claim, here is an outline of the steps to take.
Step 1: Serve a 20-day Preliminary Notice
If you have a contract for the work directly with the homeowner, you should be able to skip this step. However, if you are a subcontractor or supplier and you want to make sure you get paid, you must serve this Notice to the property owner within 20-days of furnishing services, supplies, and labor. This gives you the right to file the lien if you do not get paid since you don’t have a direct contract.
Step 2: Prepare the Mechanic’s Lien Form
You must fill out this claim form meticulously. This means providing the details surrounding the claim. Missing facts, skipping steps, or simply not completing the form in its entirety could deem it invalid. This is another instance when working with an experienced lawyer can help ensure everything is done according to the laws in California.
The form does not require a notary, but as the filer, you must sign a verified written statement that includes:
- The demand for the amount due.
- Details of the work provided.
- The property owner’s name.
- The name of the person who signed the contract/hired the contractor.
- Address and description of the worksite.
- Address and contact info for all parties, including contractor, subcontractor, and supplier.
- Affidavit of delivery/proof of service containing facts about the work provided, the name and contact info for the property owner (or the person receiving the lien), and the certified mail/shipping tracking number.
Step 3: Provide a Copy of the Lien to the Property Owner
Before filing the lien, you must sign and copy the document and send it to the property owner via certified mail. You will complete an affidavit proving that you delivered a copy of the notice to the property owner.
Step 4: File Your Lien with the Recorder’s Office
Your original completed mechanic’s lien form as well as a copy of the signed affidavit of delivery will need to be filed with the County Recorder in the county where the work was completed. Use the timeframe discussed above, whether 90, 60, or 30 days, to determine when this should be filed.
It is important to note that there will be a fee for recording this document. Contact the court or consult with an attorney to determine the amount.
Lien Was Paid, Now What?
The idea behind filing the mechanic’s lien is to get paid. So, if this happens – great! You will have to file the appropriate lien release form (as there are a few to choose from) to have the lien removed from the homeowner’s property.
Seek Guidance Through the Process
Unfortunately, no matter how much you would like for the lien to be paid, things do not always flow so smoothly. Nobody wants to deal with litigation and court hearings to get paid for a job. This is where hiring an attorney can make matters simpler.
Lawyers are well-versed in the laws of California and they know the mechanic’s lien process well. Whether you want someone to help with the initial filing or you want to move forward to enforce the lien, speak to a professional. That way, you can do what you do best, staying busy with your current projects while your legal counsel can handle the rest.
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