Mechanics' Liens
California Mechanic's Lien Law
In the State of California, this is a constitutional right.
Article XIV, Section 3 of the California Constitution provides: “Mechanics, materialmen, artisans, and laborers of every class shall have a lien upon the property upon which they have bestowed labor or furnished materials, for the value of such materials, for the value of such labor done and materials furnished; and the Legislature shall provide by law, for speedy and efficient enforcement of such liens.” When Mechanics Liens are filed, the filing person is a claimant.
When do claimants file mechanics liens?
Claimants file mechanics liens when they are not paid for the labor or materials they supplied for a work of improvement on property. There is often a dispute between the contractor and homeowner at this point. If the dispute is resolved, then the claimant files a Release of Mechanic's Lien. When I speak of filing, it refers to the recordation in the county records of the lien on the property improved-just like a mortgage is recorded.
Situations When Mechanics Liens are Recorded Against Homeowners
1. Homeowner pays General Contractor according to a payment schedule and withholds a retention. The General Contractor records a mechanic's lien for the difference between the value of the work completed and the amount of money received from the homeowner.
2. Homeowner pays General Contractor according to the payment schedule, but the General Contractor does not pay the subcontractors. The subcontractors file a mechanic's lien against the property. The subcontractor can do this only if he or she served a 20 Preliminary Notice on the homeowner.
3. General Contractor or subcontractor orders supplies for the work of improvement or jobsite. The supplies are not paid for. The supplier files a mechanic's lien or a materialmen's lien-the same thing.
Other Situations When Mechanic's Liens are Utilized
A work of improvement is done on a leasehold for tenant improvements. For example, Retail Store As leases a location formerly occupied by Retail Store B. The lessor has promised Retail Store A that ia certain amount of money for tenant improvements as an incetive to enter a long-term lease. The General Contractor files a mechanic's lien for the improvement. During the work, the General Contractor files partial releases of the mechanic's lien as the progress payments are made. However, when the job is completed, there is a dispute as to whether all the work was completed correctly according to the building plans. Store A cannot get its certificate of ocuupancy from the city Department of Building Safety to open the store. The lessor refuses to release the tenant improvement money until the certificate is obtained.
A huge construction project is undertaken in a large downtown Los Angeles office building. Funding for the project is coming from a large commercial bank. During Phase I of the project, the large commercial bank is taken over by the FDIC because of mismanagement and insolvency. The General Contractor, subcontractors and material suppliers file mechanic's liens. Eventually, a foreclosure of the mechanic's liens take place in Superior Court. The court orders the property sold to payoff the lienholders.
A Complex Law
Although the above explanation may seem straightforward, mechanic's lien law is a complex minefiled for the unwary.
For example, when a contractor, subcontractor or material supplier files a mechanic’s lien, they are obligated to foreclose the lien within a statutory period of time. Otherwise, the lien can be removed by judicial action. That is where this law office can help the individual, family or tenant. We can get the lien expunged or released and, in many cases, we can obtain a court order that the contractor pay your attorney fees. Please call our office to arrange an appointment so we can examine your situation and provide representation, if needed.
If a court action has already been filed, we can help you in court or assist you in negotiating a fair settlement if the case has merit. It would be wise not to attempt to handle an action in court by yourself. The law is very complicated and you are responsible for knowing the law, all of the court rules, procedures and rules of evidence.
California law regarding mechanic’s liens is complicated. There are numerous conditions, deadlines, and statutes which must be adhered to. Let us evaluate your case and assist you with this legal problem.
How We Can Help
Homeowners, Tenants and Investors
We can assist you in getting liens removed through court action or negotiations. Knowing the law and complexities, the costs, and experience in this field will enable us to obtain a satisfactory result so you can move on with your life, get your business started on time, and make your profit on your investment.
General Contractors, subcontractors and suppliers.
We can assist you in management of your mechanic's lien, preliminary notices, resolving disputes with homeowners, tenants and investors. We can help you get paid in a timely manner, write contracts for you that comply with the mechanic's lien law and Contractors Law as promugated by the State Contractor's Licens Board. We can file a foreclosure action and have property sold so you get paid for the work you have done.
Also visit http://www.mechanicslienlaw.net/
e-mail: steve.mooney@yahoo.com
Telephone: (949) 453-0310