How To File A California Mechanics Lien

This post, originally published as a Google Knol (which is being discontinued, yawn), is now repurposed for this blog.  One of the reasons I want to republish this thing is because I consider it one of the most comprehensive how-to guides for California mechanics lien filings.

This how-to guide really does give a start-to-finish explanation on how to file a California mechanics lien.

Attorneys and collection agencies around the country will unanimously agree that filing a mechanics lien is one of the best ways to collect money owed to you on a construction project. The remedy is very powerful, but you must know how to use it. There is so little room for error.  Here is some information to help you avoid the error.

Getting Started: Do You Have Lien Rights?

How To File A California Mechanics LienOf course, you can only file a mechanics lien if you have the right to file it under California law. Before you go off through the other steps to prepare and file the lien, consider whether you even qualify to file a mechanics lien.

California Civil Code §3110 provides as follows as to who can file a mechanics lien:

Mechanics, material men, 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 skills and/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…

Civil Code § 3106 is also important, as it defines the term “work of improvement:”

“Work of improvement” includes but is not restricted to the construction, alteration, addition to, or repair, in whole or in part, of any building, wharf, bridge, ditch, flume, aqueduct, well, tunnel, fence, machinery, railroad, or road, the seeding, sodding, or planting of any lot or tract of land for landscaping purposes, the filling, leveling, or grading of any lot or tract of land, the demolition of buildings, and the removal of buildings. Except as otherwise provided in this title, “work of improvement” means the entire structure or scheme of improvement as a whole.

So, if you are furnishing services, materials, equipment or labor on a “work of improvement,” and you’re one of these listed types of parties…you can file a mechanics lien in California.

Can’t figure it out?  Don’t stress yourself, even attorneys like me will acknowledge that there is a lot of gray area here.  There are a lot of situations when one may find themselves wondering…did I work on an improvement?  Do I fall into one of these categories?

The good news is that California is liberal in the way it interprets these definitions to include folks, rather than exclude them.  Here are some examples of folks who can not file mechanics liens in California:

– Watchmen over job sites
– Lenders of money to construction projects
– Cooks hired to cook for construction workers
– Cleaning services
– Party who requires a license, and does not have one

Here are folks who can file a lien in California:
– job foremen
– pest control companies
– suppliers of teams, power or appliances

If Required, Verify You Sent Preliminary Notice

How To File A California Mechanics LienSome parties in California may only file a mechanics lien if they delivered the state’s required “preliminary notice” right after they first furnished labor, material or services to the project.  How soon after?  The notice must be filed within 20 days, and in fact, is referred to in the industry as the 20-day Preliminary Notice.

Here are the three most important things you need to know about California’s preliminary notice requirement:

  1. Are you required to deliver it?   If you did not contract with the property owner (i.e. you contracted with the prime, a sub, etc.), the answer is almost always ‘yes.’
  2. What must you send?  California requires you send a very specific form to the property owner.  You can learn more about it at this website.  Also, here is a free form for you to download and use as an example.
  3. How must you send it and to who?  California can be picky. You must send the notice by certified mail, and just as importantly, you must be able to prove you sent it.  Check out this page for proof requirements.  Insofar as who needs to receive the notice, the notice should be sent to the property owner, the prime contractor and the construction lender.

Preparing and sending a California 20-Day Preliminary Notice can be quite complicated, and time consuming. Consider outsourcing the work to a service that does it everyday.

Step-by-step instructions

1. Step One — Prepare Your Claim of Lien Document

If you have the right to lien, and you preserved it by sending your notice, now it’s time to prepare the mechanics

lien document. While this seems like a simple task, it’s not.  Mechanics lieHow To File A California Mechanics Lienn laws are very complex, and even if you have a proper mechanics lien form, there are many traps for someone who is inexperienced with the mechanics lien requirements.  Take a look at this article, for example, about the Perils of using Do-It-Yourself Forms to File A Mechanics Lien.

With that said…here is a great mechanics lien form, published by the Sacramento County Public Library, and updated with the California lien law changes that took effect in January 2011.

You can use it to prepare a lien form ready for filing, which includes all of the following information:

  1. Statement of your demand;
  2. Property Owner’s name;
  3. Statement identifying what the lien is for;
  4. Name of party who hired you;
  5. Description of the job site (legal property description is best);
  6. Proof of service affidavit attesting to delivery of the lien to required parties;
  7. Statutory notice statement; and
  8. Verification.

Now, you may notice some things that are required within a mechanics lien…that you simply do not know.

For example, do you know who actually owns the property?  Are you sure?  Sometimes property is owned by a company even when outsiders believe it is owned by someone individually.  Or consider this, is the property owned by the husband, the husband and wife, or the wife?  These details can make a big difference.

Another error people frequently make when preparing their own mechanics lien, is not properly identifying the property.  Correctly identifying the property’s legal property description can be the difference between a valid lien and an invalid lien.  Take a look at this article about Identifying Property with a Legal Property Description.

If you feel uncomfortable about getting everything right, you may want to consider filing with a mechanic’s lien filing service like zlien .

2. Step Two — Deliver A Copy Of The Lien To The Property Owner

How To File A California Mechanics LienAs part of the 2011 changes in the California mechanics lien law, you must deliver a copy of the mechanics lien to the property owner…and you must do it FAST.  As a matter of fact, you must deliver it before (or at the same time) of filing your lien, and attach proof of that delivery with the lien you’re filing.

So, take a copy of your lien form and sign it, verify it, and put it in the mail to the property owner.  You must send it certified mail, keep a record of your mailing and sign an affidavit swearing that you send it on the date it was sent and in the manner by which it was sent.

Attach this affidavit of delivery and the proof of mailing with your mechanic’s lien when you send it for recording in the next step.

3. Step 3 — Record Your Lien

At first blush, this may seem like the easy part, but don’t get too confident.  A lot can go wrong:  (i) you can get

How To File A California Mechanics Lien

the filing fee wrong; (ii) you can file it in the wrong place; or (iii) you can not understand a county’s turnaround time.

The original copy of your lien, together with the affidavit of delivery upon the property owner, must get filed, and the place to file is the Recorder’s Office for the county where the project was located.

The filing fee will be approximately $20 – $50, depending on the county and size of your lien form.  Don’t send your lien for filing via regular mail in California, as many counties have back logs checking the mail that can extend weeks.  Literally, if you send a lien to Los Angeles via mail or fed ex, for example, it may not get recorded for up to 6 weeks!

You need to go there yourself and record the lien, or hire a courier to do it.  This is another reason why a mechanics lien filing service may be the way to go, as they will arrange for the filing with a courier and make sure the lien is filed in the right place and the appropriate fee is provided.   zlien , a licensed and bonded legal document preparation company in California (LDA-352) files Mechanic’s Liens in California.

The Timing Of Your Filing

Mechanics liens cannot be filed at any time.  The California statutes specifically provide that they must be filed within the earlier of: (1) 90 days from project’s completion or abandonment; or (2) 60 days from recording of Notice of Completion or Notice of Abandonment.

You may not know when these dates occur if you are a subcontractor or supplier not intimately involved with the project’s finishing. In this case, the earlier you file the better your chance of getting it recorded in time.

What Next?  After You File…

The Mechanics lien will stick on the property in California for 90 days. After this short period, the lien will expire and be of absolutely no effect unless you either:  (1) Extend the lien for an additional 90-day period; or (2) File a lawsuit to foreclose on the lien.

Extending the lien may be difficult, because it requires the property owner’s consent and signature.  This is good for folks who are working with the property owner on credit to pay a debt.

Otherwise, however, you need to file a lawsuit to foreclose on the lien.  This will keep the lien viable during the lawsuit, and at the end of the suit, if you win your case, the lien will turn permanent, and you’ll be allowed to foreclose on the property to sell it and pay off your debt.

Additional Resources & Forms

Forms:

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  • http://www.saclaw.org Kate Fitz

    I’m a librarian at the Sacramento County Public Law Library… Thanks for the compliment and the link to our form! Just as an FYI the “credit” for the form should go to someone at the Sacramento recorder’s office who pointed out that we had the old form linked, and provided us with a new form. It is one of our most requested forms; in fact I just printed one out for a gentleman about an hour ago.

    Great information here, I have referred to this blog when working on our Mechanics Lien handouts, and it’s very helpful!

    • http://www.zlien.com Scott Wolfe Jr

      Hi Kate – Thanks for the comment, and for being a reader. It was a no-brainer to point to the Sacramento County Public Library’s forms, as I think you do a really terrific job of putting this information together. What a good service to the public you guys offer – the usefulness is revealing in your comment that its one of your most requested form. Keep up the good work, and ping me if you ever need any help with your materials.

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  • Melanie

    Thanks for this great info! My question is, do people in california have a grace period to pay your before the lien can be filed?

    • http://www.zlien.com Scott Wolfe Jr

      Our pleasure Melanie. Thank you for visiting the site, and for your comment. The answer to your question is a bit complex, and I think the reason for this is because you’ve asked the wrong question. There is no statutory “grace period” for someone to file a lien. If someone owes you money, you can file a lien. Period. However, there is a time LIMIT as to when you can file that lien in California. After a certain point, you’re no longer entitled to file a lien. So it’s important to lien early. In California, the general rule is that you have 90 days from completion of the project to file your lien. However, there are scenarios when this period is shortened to as little as 60 days from the same date. Check out this link for more details: California Lien Law Summary and FAQs

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  • Bharti Khatri

    My question i I am in California -and my property is set for sake date aug 21st for auction –can they sell the property if there is a mechanic lien?

    • http://www.zlien.com Scott Wolfe Jr

      If there is a mechanics lien the property can still be sold, but any money received from the sale will have to be paid to all lien holders in their order of priority.

  • http://www.macvaugh.com Hoss MacVaugh

    Scott,

    I am a commercial real estate broker who just represented a property owner in leasing space to a restaurant. I was paid ½ of my fee on lease execution – the other ½ was due upon occupancy. In between those times, the building was taken over by the bank. It has not yet been 20 days since they moved in.

    In the capacity of Broker I was a contractor (I have an Independent Contractor agreement) and I did provide necessary skills and services.

    Buildings are valued on income stream, with an added income if $15,000 per month, at a 7 Cap, this lease added 2,751.000 of value to the building. I also have subcontractors who are seeking payment from me – space planners etc.

    The property was just auctioned off. A bid was accepted – they have 2 weeks to close.

    What do you think I have a shot at “the grey area.”?

    • http://www.zlien.com Scott Wolfe Jr

      Hoss – Thank you for visiting our site and for your comment here.

      First, let me say that as a real estate broker, there are certain lien types available to you independent of the mechanics lien. I’m not as up to speed about these types of liens, however. You should consult an attorney who can research this for you if you are looking to lien for this.

      Second, your question suggests you’re looking to lien for some type of construction furnishing, as opposed to your real estate broker commission. As such, the first issue doesn’t really matter and the key question is simply whether the services you provided qualify you to file a traditional mechanics lien. From your question, however, it is unclear exactly what type of “skills and services” were furnished to the property. This will boil down to the question of “Who is allowed to file a mechanics lien” in California. We answer this question on our Resources page here: Who can file a California mechanics lien.