Preliminary Notices & Mechanic's Liens in California
If you take some time out from your busy daily schedule and drive around the city, you will come across several construction projects taking place around you. These projects involve many men working on building a structure. It may either be a house or a commercial building or even a stadium. However, do these workers get the pay that they are guaranteed at the beginning of the project? This is where a mechanic’s lien steps in.
What Is a Mechanic’s Lien?
Most of you may have heard about a mechanic’s lien, but very few probably know about it. A mechanic's lien in California is a type of guarantee or a contract between the owner of a property and the contractors stating proper and timely payment to the contractors, builders, and construction companies. This lien may also extend to all the subcontractors and suppliers of raw materials and may also cover any type of building repair, as well.
Steps to Enforce a Mechanic’s Lien
It is important for you to understand that the process of enforcing a mechanic’s lien anywhere in the US follows the same procedure. There are 3 steps that needed to enforce the lien. These steps are discussed below.
- Preliminary Notice: If you are in California, the process of protecting your lien rights commences with the Preliminary Notice. It is important for you to serve this Preliminary Notice within 20 days from the first day of providing material or labor to any construction project. This notice is extremely important since it preserves your right to a mechanic’s lien if you fail to receive your dues. You are allowed to serve the Preliminary Notice beyond the 20 days mark from furnishing materials and labor. However, in such a scenario, the mechanic’s lien will only include the work provided within the 20 days before serving the notice and work provided thereafter.
- Getting the Lien Recorded at the Right Time: If you fail to receive your dues, the next step for you is to record the mechanic’s lien. The proper timing of recording the lien is entirely dependent upon the completion of the work of improvement. However, this may seem like a pretty tricky thing to understand. Once a project is complete, you will have 90 days during which you need to record the lien and also serve it on the owner of the property. This timeline can easily be shortened if the owner records a Notice of Cessation or Completion. Once this notice is recorded, all material suppliers and subcontractors will have 30 days to record the lien. On the other hand, direct contractors will have 60 days for the same.
- Take Any Legal Action: Upon successful recording of the lien, you will have a time frame of 90 days to file a lawsuit in order to enforce or foreclose the lien. This lawsuit should include the names of all the interested parties, which includes the lenders, owner, and any other contractor or material supplier who have also recorded liens against the said property.
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