MECHANICS' LIENS

The law gives priority to properly licensed contractors and material suppliers who are not paid for work they perform. They are allowed to file a mechanics' lien against the property that benefited from their work or materials. When mechanics liens are filed against associations, owners will have difficulty refinancing and/or selling their homes. There are some limitations to filing a lien against an association. Civil Code §1369. Following is a general outline of the procedure for recording mechanics' liens.

Process for Recording a Lien

1.  Preliminary 20-day Notice. Before recording a lien, a preliminary 20-day notice must be served on the association. The notice must be served before recording a lien and not later than 20 days after the actual date of construction begins, and must contain the following information:

• A general description of the labor, services, and equipment to be furnished.
• The name and address of the person providing the services.
• The name of the person who contracted for the purchase of the materials or services.
• A description of the job site sufficient for identification.
• Notice to Property Owner (in boldface type) of potential liens which might result from the owner's failure to pay.

2.  Service of Notice. The notice may be served by delivering the notice personally or by first class registered or certified mail to the association's management office, address shown on building permit, or the address shown on the construction trust deed.

• If served by mail, the person filing the lien must prepare a "Proof of Service" accompanied by either the return receipt of certified or registered mail, or by a photocopy of the record of delivery and receipt maintained by the post office, showing the date of delivery and to whom delivered, or, in the event of non-delivery, by the returned envelope.
• If served personally, the person filing the lien must prepare a "Proof of Service" showing the time, place, and manner of service, facts showing that service was made in accordance with the statute, and the name and address of the person on whom a copy of the preliminary notice was served and, if appropriate, the title or capacity in which he or she was served.

3.  Claim of Lien. The claim of lien is a written statement containing the following information:

• A statement of the demand after deducting all just credits and offsets;
• The name of the association;
• A general statement of the kind of services furnished;
• A description of the site sufficient for identification.

4.  Recordation. A lien may be recorded in the office of the county recorder where the property is located after furnishing services and before the expiration of:

• 90 days after the completion of work of improvement if no notice of completion or cessation has been recorded;
• 60 days after a notice of completion or notice of cessation has been recorded if you are in direct contract with the owner or 30 days if your contract is with someone other than the owner; or
• 10 days after a notice of completion if the work of improvement is accomplished through the use of two or more original contracts.

Filing Suit to Foreclose/Recording Notice of Lis Pendens.  No lien binds any property for longer than 90 days after the recording of the claim of lien, unless within that time an action to foreclose the lien is commenced in a proper court. As soon as the complaint to foreclose the lien is filed, you must record a notice of the pendency of the action (notice of lis pendens) with the county recorder.

Release of Lien.  If and when you are paid in full, you can release a mechanics' lien by filing a release of lien with the county recorder's office where the original lien was filed.

Updated by ADAMS KESSLER 5/7/2008