Filing a mechanics lien requires care, discipline, and attention to detail. Filing a California mechanics lien is no exception.
To successfully record you mechanics lien, you need to comply with notice requirements, prepare and format documents according to great detail, meet certain deadlines, and record with the proper office. There are plenty of opportunities to make a mistake, and any small mistake can invalidate your lien. Keep reading to learn the four steps to filing your California mechanics lien.
Should I File a Lien?
If you’re considering filing a lien, you probably are owed money that is past due. The mechanics lien is a powerful, effective tool designed to help suppliers and contractors who aren’t getting paid. On the other hand, many potential lien claimants worry that filing a lien will damage their industry relationships. It’s a worthy consideration, and ultimately, nobody but you can decide if the pros outweigh the cons. Nonetheless, if you’ve done your work, you deserve to be paid.
There are a number of ways in which filing a mechanics lien will help you get paid. Primarily, mechanics liens will:
- Prevent the sale of the property
- Tie up progress payments or funding of the job
- Bring more parties to the table to consider your claim
- Transform the property into security for your payment
- Allow you to sue the owner for work you performed, even if you did not contract with the owner directly
- Allow you to recover attorney fees and legal costs against non-paying parties when you properly record a Claim of Lien
Step 1: Do You Have The Right To File a Lien?
You can’t file a California mechanics lien if you’re not eligible, or you haven’t satisfied the prerequisite requirement. Ask yourself two questions to see if you can file a lien.
1. Did you provide “lienable” services or materials?
According to California Civil Code § 8400 – 8400, the following people are entitled to file a lien:
8400. A person that provides work authorized for a work of improvement, including, but not limited to, the following persons, has a lien right under this chapter:
(a) Direct contractor.
(c) Material supplier.
(d) Equipment lessor.
(f) Design professional
8402. A person that provides work authorized for a site improvement has a lien right under this chapter.
8404. Work is authorized for a work of improvement or for a site improvement in any of the following circumstances:
(a) It is provided at the request of or agreed to by the owner.
(b) It is provided or authorized by a direct contractor, subcontractor, architect, project manager, or other person having charge of all or part of the work of improvement or site improvement.
The definition is relatively well-defined, but does contain some grey areas. For example, can can construction managers file liens in California? Generally, if you have provided labor or materials authorized for a construction or renovation project in California, you can file a mechanics lien.
2. Did you meet your notice requirements?
All potential lien claimants must satisfy California’s preliminary notice requirements, or else they will lose their right to file a mechanics lien.
Parties that contract directly with the property owner must send a 20 day preliminary notice to the construction lender, if one is exists on the project. Parties that did not contract directly with the property owner must send a 20 day preliminary notice to the prime contractor, property owner, and the construction lender (if one exists).
This notice must be sent within 20 days of first providing labor or materials. In most circumstances, if the notice is sent more than 20 days after beginning work, you may still file a lien to secure payment for some of your work. Consult zlien‘s California Lien Resources for a more in-depth explanation of notice requirements.
Need help meeting your notice requirements? Send free notices with zlien.
Step 2: Prepare The Mechanics Lien
Now it’s time to produce the lien document. California Civil Code § 8416 sets forth which content the lien must contain:
8416. (a) A claim of mechanics lien shall be a written statement, signed and verified by the claimant, containing all of the following:
(1) 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 work furnished by the claimant.
(4) The name of the person by whom the claimant was employed or to whom the claimant furnished work.
(5) A description of the site sufficient for identification.
(6) The claimant’s address
Additionally, California requires that lien claimants provide within the mechanics lien an affidavit swearing that the claimant served the lien upon the owner:
(7) …the affidavit shall show the date, place, and manner of service, and facts showing that the service was made in accordance with this section. The affidavit shall show the name and address of the owner or reputed owner upon whom the copy of the claim of mechanics lien was served… and the title or capacity in which the person or entity was served.
Last, but not least, a California mechanics lien must contain the following statement in at least 10-point boldface type (note that the statement is case-sensitive):
NOTICE OF MECHANICS LIEN
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.
Step 3: Serve The Owner and Record The Lien
As of 2011, California requires you to serve a copy of the mechanics lien upon the property owner at the same time as filing the lien itself. (As pointed out in Step 2, you must include an affidavit within the lien verifying that the mechanics lien was served on the owner.) Service on the owner is now very important in California, and equally important is the proof you must have to demonstrate that you did, in fact, serve the lien.
The lien must be filed in the Recorder’s Office in the county where the project is located. Most county’s charge a small fee to record a lien (usually between $20-$40). Be careful about mailing your lien to the recorder, as some counties have back logs and your lien won’t get filed for weeks! You’ll likely need a courier to hand-deliver the lien to the recorder.
Need help filing a mechanics lien? Record your lien online in less than 10 minutes. No research, preparation, or mailing required. File your lien now.
Step 4: Enforce, Release, or Extend the Lien
A California mechanics lien is valid for 90 days after the date that it is filed. After this 90-day period, if the lien is not foreclosed upon or extended, it will become void and unenforceable. You’ll want to take one of three actions by the time your 90-day deadline is approaching:
- Extend your enforcement deadline: Liens in California (unlike most other states) can be extended, allowing lien more time, beyond the 90-day period, to make collections attempts before needing to enforce the lien. Getting a lien extended can be tricky in California, however, as the lien extension is only valid if the property owner agrees to it and signs the extension document. Therefore, you and the property owner must likely be in negotiations, or on some payment plan, for an extension to be agreed to.
- Enforce the lien: If you cannot extend your deadline, and you still have not been paid, you’ll likely want to bring an action to enforce the lien. Doing so enables you to foreclose upon the property to recover the money you’re owed. Enforcing a lien requires filing a lawsuit. You can hire an attorney to do this for you. Alternatively, zlien has a collections program through which you can foreclose on your lien.
- Release (or cancel) the lien: If you’ve been paid, you will probably be asked to file a lien release. The process of filing a lien release is similar to that of filing a lien. You must file the release in the same office in which you filed the lien.
Filing your California mechanics lien starts with meeting your notice requirements. Pay attention to these requirements, as they are time-sensitive and the clock runs out fast — usually, 20 days after starting work. Prepare your mechanics lien document with detail, according to the specifics set forth by California lien statute. Don’t forget to include the proof of service affidavit! Record the lien in the county recorder’s office in the county where the property is located.
After you record the lien, start the timer. If 90 days after the date of recording is approaching, consider requesting a lien extension from the property owner. If that option isn’t available. Prepare measures to enforce the lien, with the help of an attorney. If you get paid, great! File a lien release in the same office in which you filed the lien.