When filing a mechanic’s lien in California, one must tread carefully. Any little mistake can invalidate your lien, and there are plenty of opportunities to make a mistake. This post aims to educate you on the importance of filing a mechanic’s lien in California, and how to actually file the document. At the end of the post, we even provide you with a free form to use.
Why You Should File A Lien
If you’re unpaid on a construction project in California, there are a lot of reasons why you should file a mechanic’s lien. I’ve dedicated this entire blog to the mechanic’s lien remedy because I believe it’s the most powerful way for contractors and suppliers to collect on unpaid debts. Check out these posts on Why Liening is Important.
Aside from those posts, here is a summary of what effects a lien’s filing may have:
- 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 didn’t 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 Lien?
Before filing a lien in California, you must first determine whether you have the right to file the lien. This really requires you to answer two questions.
First, did you provide lienable services or materials? This can be a complicated question, and I posted about this question in the past: FAQ: What Work Qualifies Me To File A Lien? To generalize, you can usually file a lien if you performed labor or provided materials to a construction project.
Second, did you deliver required notices? Pre-lien notices are typically required in California for those who do not contract with the property owner, who must deliver a “20-Day Preliminary Notice” to the prime contractor, the property owner and the construction lender. If you failed to deliver this notice within 20 days of first furnishing labor or materials to the project, you are prohibited from filing a lien.
If you furnished lienable services and sent any required notices, you are eligible to file a mechanic’s lien in California.
Step 2: Prepare The Form
Now it’s time to produce the lien document. There are strict requirements (via Cal. Civ Code § 3084) about what your lien must contain: (1) Signature and verification by claimant; (2) Statement of demand; (3) Name of the property owner; (4) General statement of services furnished; (5) Name of party who hired claimant; (6) Description of the jobsite (legal property description); (7) An affidavit swearing that Notice of the Mechanic’s Lien was served on the owner; and (8) the following statement in boldface 10-point type:
NOTICE OF MECHANIC’S 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 Form
Recent changes to the California lien laws require you to serve a copy of the mechanic’s lien upon the property owner contemporaneously (i.e. at the same time) with filing the lien itself. In fact, as you can see from the above-explained Step 2, you must include an affidavit within the filed lien verifying that the mechanic’s lien was served on the owner. Service on the owner is now very, very important in California, and equally important is the proof you are required to have to demonstrate you served it.
Insofar as the filing goes, the lien must be filed in the Recorder’s Office in the county where the project is located. There is a small fee required to record the lien (usually between $20-$40). Be careful about mailing your lien to the recorder, however, 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.
Remember that hiring a service like Zlien to file your California Mechanic’s Lien may be a good idea. Their fee includes all filing and service costs, and they make all of the arrangements for you. Mechanic’s liens can be quite complex, and it may be most efficient to leave the technical work to folks who file liens every day.
Step 4: Foreclose or Extend!
Once your lien is filed, it’s effective for a period of 90-days. After this 90-day period, if the lien is not foreclosed upon or extended, it will expire!
Extending a mechanic’s lien is usually not an option. California, however, is a rare exception to the rule, allowing lien claimants to extend the effectiveness of a mechanic’s lien for additional 90 day periods. Getting an extension can be a bit tricky in California, however, as the lien extension is only valid if the property owner agrees to it and signs the extension document itself. Therefore, you and the property owner must likely be in negotiations or on some payment plan for the extension to make any sense.
More likely, you’ll need to foreclose on the lien by filing a lawsuit. You can hire an attorney to do this for you (let us recommend Wolfe Law Group, who practices in California), or you can let Zlien arrange for the foreclosure suit through its Collections service.
Free California Mechanic’s Lien Form
If you’d rather do the lien work yourself, here are some resources that can help you, including the California Mechanic’s Lien form as provided by the Sacramento County Public Law Library.
- How to File A Mechanics Lien in California Avvo.com Guide
- How to File A Mechanic’s Lien in California Knol Guide
- California Mechanic’s Lien Articles on zlien.com/blog
- California Mechanic’s Lien Form