Thursday, December 30, 2010

2011 Mechanic’s Lien Changes – Overlook Them at Your Own Peril!

Beginning January 1, 2011, contractors and material suppliers must fulfill additional requirements to record and foreclose on a Mechanic’s Lien for a work of improvement on real property. The new laws are designed to afford property owners more protection when a lien is recorded against their property. Failure to follow the new rules will invalidate your Mechanic’s Lien claim. (Refer to Civil Code § 3084).

Under the new law, prior to recording a Mechanic’s Lien, you must serve a copy of the Lien and also a “Notice of Mechanic’s Lien” on the property owner, or if unable to do so, then on the lender or the general contractor. Failure to serve the Notice and Mechanic’s Lien in the required manner will cause your Lien to be unenforceable. A “Proof of Service Affidavit” must now be recorded with the Mechanic’s Lien, to prove that the Lien and the Notice were served in accordance with the new law.

The new law also requires a Notice of Pendency of Action (sometimes called a “Lis Pendens”) to be recorded within 20 days of filing a lawsuit to foreclose on the Mechanic’s Lien. (Civil Code § 3146). In the past, recording this Notice was not mandatory.

2 comments:

Central Heating UK said...

The new laws are designed to afford property owners more protection when a lien is recorded against their property.
Thanks for post..

Gary said...

Thanks for the post. I'm looking at starting up my own construction contracting company and Construction Commando has been an irreplaceable tool when it comes to tips and stuff. Thanks a lot.