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 mechanic 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 mechanic’s 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?
Of course, you can only file a mechanic’s 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 mechanic’s lien.
California Civil Code §3110 provides as follows as to who can file a mechanic’s lien:
Mechanics, materialmen, 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 skill 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 mechanic’s 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 pretty liberally interprets these definitions to include folks, rather than exclude them. Here are some examples of folks who can not file mechanic’s 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 foremans
- pest control companies
- suppliers of teams, power or appliances
If Required, Verify You Sent Preliminary Notice
Some parties in California may only file a mechanic’s 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:
- 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.
- 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.
- 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 this page out 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 mechanic
lien document. While this seems like a simple task, it’s not. Mechanic lie
n laws are very complex, and even if you have a proper mechanics lien form, there are many traps for the preparer who is inexperienced with the mechanic lien requirements. Take a look at this article, for example, about the Perils of using Do-It-Yourself Forms to File A Mechanic’s Lien.
With that said…here is a great mechanic’s 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:
- Statement of your demand;
- Property Owner’s name;
- Statement identifying what the lien is for;
- Name of party who hired you;
- Description of the job site (legal property description is best);
- Proof of service affidavit attesting to delivery of the lien to required parties;
- Statutory notice statement; and
- Verification.
Now, you may notice some things that are required within a mechanic’s 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 mechanic’s lien is not properly identifying the property. Getting the property’s legal property description correct 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
As part of the 2011 changes in the California Mechanic’s Lien Law, you must deliver a copy of the mechanic’s 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
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 mechanic’s 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
Mechanic’s 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 Mechanic’s 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
- Great Informative Blog Post about California 20-Day Preliminary Notices
- Strict Proof of Delivery May Be Required For Preliminary Notices
- Perils of Using Do-It-Yourself Mechanic’s Lien Forms
- California Lien Law Changes Effective January 1, 2011. Are You Ready?
- Don’t Delay Filing California Liens: Counties Have Backlogs
Forms:
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