California Lien Law Forms, Procedures and Laws Changing on January 1, 2011

By on November 16, 2009

The California legislature just passed an act to amend California Code § 3084 and 3146, relating to construction liens, and the new regulatory scheme is set to take effect on January 1, 2011.   While the effective date is still more than a year away, it’s important for potential claimants to understand and prepare for the changes.

You can read the Act amending the mechanics lien laws by clicking here.

Here are some key changes to the California lien laws:

Service of the Lien Upon Owner

Previously, there were no specific provisions requiring service of a recorded lien upon the property owner.   As Porter Law Group reported on a website bulletin, “[p]roperty owners have long complained that until they receive the foreclosure lawsuit they are often entirely unaware that a mechanics lien had even been recorded on their property.”

To address the concern, California Civil Code § 3084 will be amended to provide a specific statement titled “NOTICE OF MECHANICS LIEN.”  This identical statement must be printed in at-least 10-point boldface type on the lien itself….and it must be served upon the property owner contemporaneously with the filing of the lien.

Along with the printing of this text onto the lien, § 3084 (a)(6) also states that a “proof of service affidavit” must be completed and signed, and included with the lien, by the person serving the Notice of Mechanics Lien to the owner.

If the lien is not served, § 3084(d) provides that the “mechanic’s lien [shall be] unenforceable as a matter of law.”

Additional Changes

§3146 adds the requirement of recording a “notice of pendency of proceedings” within 20 days after the filing of the mechanic’s lien foreclosure action.  §3084 also adds that reference to the user of the term “mechanics lien,” when it previously only referred to a “claim of lien.”

Zlien is Prepared

Zlien is prepared for the upcoming changes to California’s lien laws.  Starting January 1, 2009, the Claim of Lien document will be updated to include the new Notice of Mechanics Lien language, and service of the property owner will be made as required by the statute.

Zlien can help your company manage the sending of these notices, record delivery and sending notifications, and record affidavits of service.

Subscribe to our blog to stay tuned to lien law changes across the country.  An alert will be posted to our blog before the change takes effect in 2011.

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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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  • John Bova

    Who has the right to file a lien?
    Does a construction consulatant that is not a license contractor have any rights under the millers act?

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

      Hi John – Thanks for stopping by and posting your comment. The answer to your questions really depends on a number of facts, and so it’s difficult to answer it with such a short explanation of the circumstances.

      You can read the Miller Act Statutes at this link.

      The Miller Act provides that the following persons/parties have a right to make a claim: “Every person that has furnished labor or material in carrying out work provided for in a contract…”

      The question is whether your consulting work qualifies as this. This depends on the work you engaged in as the consultant. You likely need legal advice to answer this question (or it may be a good idea to get legal advice). You can get legal advice by asking your question at Avvo.com, or by finding an attorney (at that website or elsewhere) and contacting them to discuss your question.

      • Richard Burton

        The answer should be that no “liens” are allowed under the Miller Act, and that the only remedy would be under the payment bond. However, the minimum levels for the job may be too high (i.e., $100,000) to have a payment bond required. Also, the ROICC may choose to avoid the need for a bond. It’s specific on each job and always a good idea to ask for the copy of the bond ahead of time.

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

          Hi Richard – Thanks for stopping by and for the comment. I think you make some great points here – especially something that I’ve missed in some of my posts about the Miller Act….that sometimes a payment bond isn’t required based on the project cost.

          Getting a copy of the bond at the beginning of a project is best…and if you can’t get it nicely, a formal request is helpful.

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