Wednesday, May 2, 2012

Taking the Surprise Out of a Mechanics Lien Claim

Mechanics liens are great ways for a supplier, subcontractor, or even a contractor to take a step to ensure compensation for the work they perform on a construction Project. Usually, after the mechanics lien has been filed, the lien claimant can file a lawsuit to foreclose on the property. The mechanics lien filing and the subsequent foreclosure proceedings can be a huge surprise to owners who may not have know of any payment issues until receiving the mechanics lien.

To avoid the surprise, California, and many other states, have instituted prelien notice filing or serving requirements.  These recent changes to the mechanics lien law are generally billed as "consumer friendly" legislation because they aim to take some of the "surprise" out of the mechanics lien filing process.

In California in particular, the mechanics lien law requires that the lien claimant do the following:
  • serve the property owner of a mechanic’s lien when the lien is recorded;
  • serve a notice of a mechanic’s lien that explains the purpose of the lien and what it does; and
  • recording a notice that an action is pending (a “lis pendens”) within 20 days of filing a lawsuit to foreclose on the mechanic’s lien.
Lien claimants must comply with all existing procedures, such as the service of a California preliminary notice.

For help on filing a California mechanics lien, give us a call at 888-543-6765 or visit the California mechanics lien section of our website by clicking here.

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