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It’s not always easy to receive the gold you’ve earned in the Golden State. California, like all other states, has mechanics lien laws to help construction workers and suppliers like you get paid. Like all other states, California mechanics lien law is also confusing and complicated. So you need to know how the law works to be able to properly file a mechanics lien in California and protect your right to be paid. Here are 5 things you need to know about the California mechanics lien law to successfully file your next lien.
Who Can File a Mechanic Lien in California?
Generally, anyone who provides materials or services during construction can file a mechanics lien. This includes general contractors, subcontractors, laborers, and material suppliers but their rules for filing a mechanics lien are different than those explained below.
The First Step to Filing a Mechanics Lien is a Notice of Right to Liens
Your first step in protecting your lien rights is to serve notice of your right to file a mechanic’s lien, often referred to as the Preliminary Notice. It must be served on the owner and the general contractor. Unless you are working directly for the general contractor. If the owner obtained a loan to fund the project, you must also serve the notice on the construction lender.
Preliminary 20-Day Notice
This notice must be served within 20 days of the day you start work or begin supplying materials to the project. If you miss the 20 days, you can still serve the notice late but only money earned within the previous 20 days can be included in your lien.
The notice may either be served by certified mail, return receipt requested or personally served on each of the parties. If you file a lien, you need to provide proof of this service by affidavit and proof of mail delivery. The notice must include a description of the work or goods you will provide, the estimated total price of the work or goods you will provide and the statutorily required statement California Civil Code Section 8202 Chapter 2. The language in the notice must exactly match the language in the statute.
Preparing the Lien
Every mechanics lien in California must contain the owner’s name, a general description of the property and location, the name of the hiring party, a description of the work performed and the amount of money owed. The lien must also include the statutorily required statement in California Civil Code Section 8416 Chapter 4.
Filing and Serving the mechanics lien
According to California mechanics lien law, you have 90 days from the last day you performed work or provided goods on the project to file your mechanics lien. However, if the owner files a notice of completion or cessation to indicate the project has stopped, you only have 60 days from the filing of that notice to file your lien. The lien must be filed in the county recorder’s office in the county where the property is located. The lien may either be served by certified mail, return receipt requested or personally served on each of the parties. If you file a lien, you need to provide proof of this service by affidavit and proof of mail delivery.
Important Facts to Consider
Even if you do not plan to foreclose on the lien, (perhaps to give the owner additional time to pay or for whatever reason), it is best to go through the entire procedure. Even if circumstances change, it may be too late to act when dealing with California mechanics lien law. If payment discussions break down or your customer appears headed toward insolvency, your diligence will have made it possible for you to foreclose on the lien. Property owners and competing creditors may try to block your path, but if you followed the law, you will have placed yourself in a strong position against your adversaries.
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