5 Fast Facts About California Mechanic’s Liens

By on January 19, 2009

The Contractor’s Secret Weapon blog posted an article providing 5 fast facts about California Mechanic’s Liens.

Here they are:

1)    If you didn’t contract with the property owner, within 20 days after first providing materials or services to a project, you must deliver a Preliminary 20-Day Notice to their customer, the property owner, the general contractor and the construction lender.

2)    Failing to provide the Preliminary 20-Day Notice is grounds for disciplinary action by the Registrar of Contractors.

3)    Mechanics Liens must be recorded either:  (a) within 90 days from completion of project if Notice of Completion or Cessation is not recorded; or (b) within 30 days from completion of project if Notice of Completion or Cessation is recorded.  Prime contractors have 60 days.

4)    Your construction lien does not last forever.  You must file an action to foreclose on your lien within 90 days of its filing.

5)    If you don’t file an action to foreclose on your lien, the contractor must record a Mechanic’s Lien Release.   Failure to do so could subject the claimant to statutory penalties of up to $2000 for property owner’s legal costs in getting the lien removed.

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About Scott Wolfe Jr

Scott Wolfe Jr. is the CEO of Zlien, a company that provides software and services to help building material supply and construction companies reduce their credit risk and default receivables through the management of mechanics lien and bond claim compliance. He is also the founding author of the Lien Blog, a leading online publication about liens, security instruments and getting paid on every account. Scott is a licensed attorney in six states with extensive experience in corporate credit management and collections law, with a specific emphasis on utilizing mechanic liens, UCC filings and other security instruments to protect and manage receivables. You can connect with him via Twitter, LinkedIn and Google+.Read Scott's Biography Post Here
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  • sam pignato

    I did a financial comparison requested to solve construction problems on 23 buildings for a condo association/ The board odf directors and magmnt. company are claiming it was free consulation!! I made it clear verbally , including hourly rate to board member that gave me a go ahead. The management company did also. Not in writing. They refuse to pay for a elabore analysis and solution for the 176 condos. I want to file lien. Do i file on board of directors home or ,management company.?? It is a condo association>>> a low cost one at that. bill 1645$ sam pignato

  • Pingback: Mechanics Lien – Is it like a Mortgage? Yes and No. | Construction & Mechanics Lien Blog

  • http://rss2francais.com Anglebrandt

    [...] In Louisiana, liens must be enforced within 1 year from filing.  In Washington, lien foreclosure is due within 8 months of filing.  In California, you must foreclose within just 90 days of filing! [...];…

  • Pingback: Mechanics Lien – Is it like a Mortgage? Yes and No. | Construction Law Monitor

  • http://www.foreclosure-information.org/ Ralph Ferraren

    I’ve read that one must serve a “Preliminary 20-day Notice” within 20 days from first furnishing labor or materials. However, many suppliers give 30 days to pay invoices and only begin to apply pressure after 60 days. Wouldn’t that be later than 20 days from “first” furnishing labor and materials?

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

      Ralph, your comment touches on a question I get very frequently from folks in the industry. In fact, it’s worthy of its own blog post here on the Construction Lien Blog. The problem is that many companies feel like they only need to monitor or move to protect lien rights when the debt becomes due – but this is absolutely not the case. In a large number of states (click here to see the map of preliminary notice requirements across the country) notices must be filed before any payment is due. The preliminary notice is due within 20 days after furnishing materials or labor.

      So in your hypothetical example, you would be required to deliver the preliminary notice right when you first deliver the materials or labor, and before any payment is ever due. Perhaps the reason for your confusion is that you are considering the “Preliminary 20-Day Notice” to be an adversarial step, or an action that is applying “pressure.” Preliminary notices are not notices of intent to lien, however, and they are not designed to apply any pressure on any party to force payment.

      This is an other misconception. Many in the industry think that preliminary notices are going to scare their customers, hurt relationships, etc. – and this is far from the truth. I wrote an article last week titled: Preliminary Notices Will Not Scare Your Customer. The article is about this precisely. Preliminary notices are not adversarial instruments, and are nearly always sent when things are going perfectly on the project, and no one owes anyone anything.

      Another article that may help explain this is Filing A Lien Is A Discipline And Not A Knee Jerk Reaction.

  • http://www.foreclosure-information.org/ free foreclosure information

    Essentially, so long as a mechanic’s lien is issued against a property, the person must pay off the lien or else the contractor can file a lawsuit to enforce the lien. If the court finds in favor of the contractor, the person either must pay the lien or the court can order that the property be auctioned and sold in order to satisfy the debt.

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

      That’s correct.