What is a Mechanic’s Lien?
A mechanic’s lien in California is a legal tool that guarantees payment to builders, contractors, subcontractors, laborers, and suppliers involved in a construction project. This lien can be used when the project owner or other responsible parties fail to pay for the services rendered or materials provided. For contractors, developers, or property owners in California, dealing with mechanic's liens can be complex and stressful. A lien can halt your project and disrupt your budget and schedule. Conversely, for contractors or suppliers who haven't been paid, filing a mechanic's lien may be necessary to secure the payment owed.
Handling mechanic's liens in California involves adhering to strict deadlines and procedural requirements. An experienced California construction lawyer is crucial for properly filing or defending against a mechanic's lien. This guide provides an overview of how mechanic's liens work in California and offers advice for filing a valid lien as a contractor and defending against a suspect lien as a property owner.
Our team of California construction attorneys has extensive experience in construction and lien law, advising clients on handling construction contracts, negotiations, liens, and codes. Call us today for more information at (800) 358-0305
How do Mechanic’s Liens work in California?
A mechanic's lien allows contractors, subcontractors, suppliers, and design professionals to place a lien against the property to secure unpaid bills for work or materials provided. Some key characteristics of California mechanic's liens include:
Liens can be filed on private property.
Preliminary notice must be given within 20 days of starting work.
Liens must be filed within 90 days of completing the work if no notice of completion is recorded.
Property owners can face double payment if they pay the general contractor who fails to pay subs and suppliers.
Steps to File a Valid Mechanic’s Lien in California
If you are a contractor, subcontractor, or supplier who has not been fully paid for your work on a construction project in California, then you need to follow these steps to file a valid mechanic's lien:
Send a Preliminary Notice Within 20 Days
In California, most claimants must serve a preliminary notice within 20 days of starting work or delivering materials. This notice informs the property owner, general contractor, and lender that you provide labor or materials and may file a lien if unpaid. If you send a notice after 20 days, then you may lose lien rights for work done or materials delivered more than 20 days before the notice.
File your Lien with the County
The mechanic's lien must be recorded with the county recorder's office where the property is located. This must be done within 90 days of completion of work, when the owner began using the improvement, or when the owner accepted the improvement.
Serve the Owner of the Property
After recording the lien, you must serve a copy to the property owner. This step ensures the owner knows the lien and can address the payment issue.
Start Suit to Foreclose your Mechanic’s Lien
To enforce your lien, you must file a lawsuit to foreclose on the lien within 90 days of recording it. If you do not enforce the lien in court within this timeframe, the lien becomes void.
It is highly recommended that you have an experienced California mechanic's lien attorney guide you through the process to avoid missing deadlines or technical defects that could invalidate your lien.
How to Defend Against a Mechanic’s Lien
If you are a property owner or developer who has had a mechanic's lien filed on your California property, here are some potential defenses and strategies to beat the lien:
File a Lien Release Bond
Filing a lien release bond for 125% of the lien amount will remove the lien from your property title. This allows you to sell or finance the property while the lien is being disputed.
Challenge Service or Notice Defects
Examine the lien for defects in service of notices or documents. If the lien claimant missed a notice deadline or improperly served the lien, it may be invalidated.
Assert Payment Defenses
If you have evidence that you paid the contractor who failed to pay the lien claimant, assert this defense. Additionally, if the work was improper or unfinished, file a counterclaim.
Reduce the Lien Amount
Argue that the lien is excessive and seek to reduce the amount through court intervention. You can also negotiate a lower settlement of the lien.
The Lien Was Filed Beyond the Deadline
One of the most common defenses is that the lien was filed after the statutory deadline from the last furnishing of labor or materials.
Attack Technical Lien Defencts
Liens can be invalidated if they lack key details about the property, the parties involved, or the nature/amounts of the claim.
Having a California lawyer experienced in mechanic's liens review the claim and build potential defenses is highly recommended for property owners.
Why Should You Contact A California Construction Attorney about a Mechanic’s Lien?
Strict Deadlines
Missing a lien deadline by even one day can destroy your rights. A lawyer will ensure deadlines are met.
Complex Notices and Process Service
Improper service of notices or lien claims can invalidate a lien. A lawyer handles service properly.
Lien Amount Determination
Calculating the accurate lien amount is complex. A lawyer ensures the amount is supported and stands up in court.
Payment Priority Issues
An attorney can help pay your lien first from sale or financing proceeds.
Negotiations and Settlement
An experienced construction lawyer can negotiate fair lien reductions or settlements, often resolving liens out of court.
Avoiding Liability
Property owners who don't manage payments correctly can end up paying twice. A construction lawyer helps avoid double liability.
Enforcement Expertise
Enforcing a lien is complex and requires litigation experience. Construction lawyers have the expertise to enforce or defend liens in court.
Takeaways for Mechanic’s Liens in California
Mechanic's liens are serious and can harm your property rights and budget, but they are defendable with help from an experienced construction law attorney. To avoid critical mistakes, contractors and suppliers should consult a lawyer before commencing the lien filing process. Property owners should retain counsel once a lien is received to maximize defense strategy options. While expensive, litigation may ultimately be needed to enforce or defend against a lien if a cheaper resolution is not reached first.
What is your next step?
Will you keep trying to negotiate independently with mounting stress and uncertainty? Or is it time to consult an experienced California mechanic's lien attorney for expert guidance and confidence that your rights are protected?
Our team of California construction attorneys has extensive experience in construction and lien law. We advise clients handling construction contracts, negotiations, liens, and codes. Call us today for more information at (800) 358-0305
