Mechanics’ Liens are one of the basics components of construction law. A mechanics’ lien is a tool that a workman or materialman providing improvements to property uses to enforce payment. If an owner of real estate does not pay for the improvements and materials received a mechanics’ lien can be recorded against the property and then foreclosed on to pay the debt.
A Mechanics’ Lien Is Not Proof Of The Debt
A mechanics’ lien is not used to prove that the debt is owed. This is a common misconception among contractors. Before a lien claimant can foreclose on real estate using the mechanics’ lien it must first be proven that the debt is owed. This is done in court. The contractor must prove that the owner has a legal obligation to pay on an agreement and exactly how much is owed. It might even be enough to show that the owner had knowledge of the improvements and did nothing to stop them even if there was no agreement.
The owner has a right to argue that the work was not done properly and the debt, if any, is subject to a set-off. Often times filling a lawsuit for payment results in a cross-complaint for construction defects. The court might even find there is defective work that will cost more to repair than the amount of payment being claimed. The risks of filing a lawsuit are specific to each case.
A Mechanics’ Lien Becomes Invalid
A mechanics’ lien does not last forever. A contractor cannot just leave it recorded on title until the owner wants to sell the real estate or refinance. The lien is good for 90 days from the time it is recorded. Within this time the claimant must file an action for foreclosure in the proper court. After the 90 days the lien is considered “stale” and can no longer be used. The claimant must then provide a notarized mechanics’ lien release to the owner for recording. If the claimant does not release the mechanics lien the owner can file for a quick hearing with a court to have it removed. The claimant could end up being responsible for the owner’s attorney fees.
Deadlines on Filing a Mechanics’ Lien
The rules on when a workman or materialman can file a mechanics’ lien are technical. The deadline is different for prime contractors than it is for subcontractors and materialmen. It can be made significantly shorter if the owner records a “notice of completion” or a “notice of cessation” of work. There is a different deadline for jobs where the work stopped but was not finished. Some lien claimants must provide to the owner a “20-Day Preliminary Notice” as a prerequisite to recording a lien. If the Preliminary Notice was never provided then lien rights are waived. Consult with an attorney to see if rights exist in your case.
Don’t Waive Your Rights To A Mechanics Lien
If you are a worker or materialman who believes that you are entitled to payment from owners you should record a timely mechanics’ lien and then file an action with the proper court before the lien becomes stale. Your right to the payment is not affected by failing to record a mechanics’ lien, but your ability to enforce that payment is compromised without one.
As you can see from the above analysis a person’s right to a mechanics’ lien requires a certain amount of consideration of the facts of each job and the relationships of the parties. Unless you are up to speed on the rules you should contact an attorney to make sure your rights are not lost accidentally.
For free mechanics’ lien forms click here. Each form is fillable on your computer. You can save these forms on your computer after you have filled them out if you have Adobe Acrobat.
From Sebastopol, the Law Offices of Graden Tapley represents clients throughout Sonoma County, California, including Santa Rosa, Cotati, Healdsburg, Petaluma, Rohnert Park, Santa Rosa, Windsor and neighboring communities.