Jim Porter: new mechanic’s lien form
Contractors, subcontractors and suppliers, heads up. Effective Jan. 1, 2011, there is a significant change in the law regarding mechanicand#8217;s liens.
The California Constitution provides a mechanism for contractors, subcontractors and suppliers to collect money due if they have not been paid and#8212; either by the owner, or in the case of an unpaid subcontractor or supplier, by the general contractor.
An unpaid or partially paid contractor, subcontractor or supplier may record a mechanicand#8217;s lien, then file a lawsuit within 90 days to foreclose on the lien, ultimately forcing a sale of the property. Mechanicand#8217;s liens are an effective collection mechanism for the construction industry.
Recent changes to Civil Code sections 3084 and 3146 address shortcomings in Californiaand#8217;s lien laws. As of Jan. 1, a mechanicand#8217;s lien claimant must not only record a lien in the recorderand#8217;s office of the county where the property is, but must serve a copy of the lien on the owner along with a prescribed Notice of Mechanicand#8217;s Lien.
The lien and notice lets the property owner know about the lien and gives a brief explanation of the nature of mechanicand#8217;s liens and what the property owner might do to address the lien. Long overdue. The lien and notice must be served on the owner by registered mail, certified mail, or first-class mail evidenced by a certificate of mailing. Interestingly, the code recites that if the owner cannot be served, then the lien and Notice must be served (in the same manner) on the construction lender or the general contractor.
Failure to properly serve the mechanicand#8217;s lien and Notice of Mechanicand#8217;s Lien makes the lien unenforceable. Ouch.
In sum, the mechanicand#8217;s lien form itself has not changed (although an affidavit of service replaces a verification), but now as the lien is recorded, it must be mailed, as specified, to the property owner with the Notice of Mechanicand#8217;s Lien.
If you need a copy of the new Notice of Mechanicand#8217;s Lien and proof of service affidavit, contact our office.
But thatand#8217;s not all.
When a mechanicand#8217;s lien foreclosure suit is filed, it is common practice to record a notice of the pendency of the lawsuit, sometimes called a lis pendens, so the world is put on notice that the property may be sold to pay the lien debt. As of Jan. 1, 2011, it is mandatory to record a lis pendens within 20 days after the filing of the lien foreclosure suit.
This is good legislation which serves the construction industry and those that receive the services of contractors, subcontractors and suppliers. There is a two-year omnibus bill proceeding through the legislature which overhauls mechanicand#8217;s lien laws. Weand#8217;ll keep you informed.
Jim Porter is an attorney with Porter Simon, with offices in Truckee, South Lake Tahoe, Incline Village and Reno. He is a mediator and was the Governor’s appointee to the Fair Political Practices Commission and McPherson Commission, both involving election law and the Political Reform Act. He may be reached at email@example.com or at the firmand#8217;s website http://www.portersimon.com.
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