Thursday, October 4, 2007

5 Fast Facts: The California Mechanic’s Lien Process

1. Subcontractors and material suppliers who do not have a direct contractual relationship with the owner must serve a Preliminary 20-Day Notice on their customer, the property owner, general contractor and construction lender (if applicable) within 20 days after first providing materials or services on a project. A Preliminary Notice served later than 20 days after the start of work or furnishing of materials will only protect a subcontractor’s or supplier’s mechanic’s lien rights for materials or labor furnished during the 20 days prior to the service of the Preliminary Notice.

2. Any subcontractor who enters into a contractual relationship exceeding $400 is required by law to prepare and serve a Preliminary Notice. Failure to do so constitutes grounds for disciplinary action by the Registrar of Contractors.

3. A Mechanic’s Lien must be recorded at the Recorder’s Office in the county where the property is located, according to the following deadlines: If no Notice of Completion or Notice of Cessation has been recorded, the Mechanic’s Lien must be recorded within 90 days of the completion of the construction project; if a Notice of Completion or Notice of Cessation has been recorded, a subcontractor or material supplier must record a Mechanic’s Lien within 30 days of the completion of the project, and a prime contractor has 60 days to record a Mechanic’s Lien.

4. To perfect the Mechanic’s Lien, a general contractor, subcontractor or materials supplier must file a Civil Complaint to Foreclose Mechanic’s Lien in Superior Court in the county in which the property is located within 90 days of the date the Mechanic’s Lien was recorded.

5. If payment is received after the Mechanic’s Lien has been recorded or if the Civil Complaint to Foreclose Mechanic’s Lien has not been filed within the required 90-day period, the contractor or supplier who recorded the lien must record a Mechanic’s Lien Release. Failure to do so could subject the lien claimant to penalties of up to $2,000 for the property owner’s legal costs in getting the Mechanic’s Lien removed.

1 comment:

Illinois Mechanics Liens said...

This is the kind of plain-English description that actually helps non-lawyers to be able to follow through on their legal rights. Excellent!