If there’s a dispute over payment, contractors or suppliers who worked on a property in California can file a mechanics lien — a powerful legal tool designed to compel property owners to provide proper compensation. For contractors and suppliers, mechanics liens offer critical legal relief that ensures compensation for work completed. For property owners, these liens can pose significant challenges, especially when wrongfully filed for work that has already been compensated or was never completed.

It’s critical for both contractors and property owners to be well-versed on the ins and outs of mechanics liens. We’re here to provide expert assistance in all forms of real estate and construction disputes at Marinaccio Law, and in this guide, we’ll provide concise and thorough education on everything you need to know about mechanics liens.

What Is a Mechanics Lien?

In the state of California, a mechanics lien is a legal claim against a property that can be made by a contractor, subcontractor, or building material supplier who has not been paid for work done to construct or improve on that property. Mechanics lien rights are provided under the California Civil Code Sections 8000–9566, and this type of lien is tied to the property itself, not the current owner.

Mechanics liens are designed to protect workers and provide a reliable legal mechanism for solving contractor payment disputes. For property owners, a mechanics lien can prevent the sale or refinancing of a property until the lien is resolved, requiring prompt attention. For contractors, the mechanics lien process can secure payment for completed work that would otherwise go unpaid.

How Mechanics Liens Work Under California Law

Mechanics liens must be submitted and processed following strict procedural guidelines. Beginning with preliminary notice and culminating in the filing of the lien, the exact timeline varies with each mechanics lien filed.

If the underlying legal procedure is not followed, a mechanics lien may be invalidated. Proper execution, however, will lead to the lien being validated through litigation, settlement, or even foreclosure of the property.

Core components of the mechanics lien process in California include:

  • Eligible Claimants: Most contributors to the construction of a property — including contractors, subcontractors, suppliers, and laborers — are eligible to file a mechanics lien.
  • Preliminary Notice Requirement: To be eligible to claim on a mechanics lien, any potential claimants must submit a preliminary notice in California within 20 days of starting work detailing the services or materials they intend to contribute to the project.
  • Lien Filing Deadline: If the property owner submits a Notice of Completion, contractors and other claimants must file a mechanics lien within 60 days of project completion. Otherwise, the lien must be submitted within 90 days after the project is complete.
  • Foreclosure Action: A mechanics lien will expire after 90 days if the claimant does not also file a foreclosure lawsuit to enforce the claim. This lawsuit will satisfy the compensation demanded by the mechanics lien by foreclosing the disputed property.

How to File a Mechanics Lien as a Contractor or Supplier

If you are a contractor, subcontractor, supplier, or laborer who was not compensated for work completed on a property, these are the steps you need to follow to properly file a mechanics lien:

1.) Serve a Preliminary Notice

Contractors and laborers directly hired by the property owner may be exempt, but subcontractors and suppliers must serve a preliminary notice to the property owner and lender (if applicable) within 20 days of starting work to be able to file a mechanics lien later. This notice should include details like a description of the work intended to be provided, the estimated cost, and contact information for the claimant.

2.) Monitor Project Completion

Be aware of the progress of the project, and keep an eye out for the property owner filing a Notice of Completion. If this notice is not filed, assume the property is complete when work on it ends or it becomes occupied.

3.) File a Mechanics Lien

Contact the recorder’s office in the county where the property is located within 90 days (60 days with Notice of Completion) to file a mechanics lien. Working with an experienced real estate litigation attorney can expedite this process and ensure there are no submission errors.

4.) Ensure Enforcement

A mechanics lien will expire within 90 days unless a foreclosure lawsuit is also filed as a means of securing payment for the disputed work on the property. This is a complex process that is best completed with the help of a real estate lawyer.

Risks of Mechanics Liens for Contractors

  • Your claim will be rendered void if proper procedures and timelines are not followed.
  • Inaccurate or fraudulent claims can lead to slander of title suits and other penalties.
  • Property owner lien disputes can be costly both to your finances and reputation as a contractor or supplier.
  • Private negotiation or mediation through an attorney may be a more appropriate first step.

How to Contest and Remove a Mechanics Lien as a Property Owner

To remove a mechanics lien placed on your property, owners must move promptly by following the proper procedures:

1.) Check the Validity of the Lien

Have an attorney check the lien for any submission errors or fraudulent claims. Make sure that the claimant is actually eligible to file a lien.

2.) Respond Promptly

Contact the claimant to suggest private negotiation. Consider filing for lien release under California Civil Code Section 8480 if the mechanics lien appears fraudulent or invalid.

3.) Post a Release Bond

To clear the title on the property while the lien is being resolved, post a release bond (generally 1.5 times the lien amount) with the court. This shifts the claim from the property itself to the bond, allowing the property to be sold or refinanced.

4.) Prepare a Court Defense

Prepare defenses against a foreclosure lawsuit such as improper notice, payment disputes, or lien defects. Experienced legal counsel is indispensable at this stage.

Legal Risks for Property Owners

  • Ignoring a mechanics lien can lead to foreclosure, satisfying the debt through the value of the property.
  • Liens can prevent the sale or refinancing of a property.
  • Invalid or frivolous liens waste time and money, potentially entitling you to damages but requiring legal assistance.

Important Deadlines to Observe

Contractors must adhere to strict deadlines during the mechanics lien process, or property owners will be able to invalidate the lien:

  • 20 days after starting work: Any potential claimants must serve a preliminary notice.
  • Immediately after the project is complete: Property owners should file a Notice of Completion to shorten the lien filing window.
  • 60-90 days after project completion: Uncompensated workers must file a mechanics lien.
  • Within 90 days of filing a lien: Those who have filed a mechanics lien must also file a foreclosure lawsuit.

Trust Marinaccio Law to Help

Marinaccio Law is a trusted legal authority in the arena of real estate and construction disputes. For both contractors and property owners, we provide comprehensive legal services that ensure satisfying resolutions to mechanics lien proceedings.

Our deep understanding of California real estate law allows us to offer personalized, effective guidance through any property disputes. Contact Marinaccio Law to protect your interests today.

FAQs

How long do contractors have to file a mechanics lien?

Contractors must file a mechanics lien within 90 days of the completion of the property. If the owner files a Notice of Completion, only 60 days are provided under California law.

Yes, a mechanics lien can place a hold known as a “cloud” on a property, preventing the sale or refinancing of the property until the lien is resolved. This is one of the reasons that property owners should respond to lien filings promptly and with the help of an attorney.

Yes, an attorney can dramatically improve your chances of properly resolving a mechanics lien. The process of filing and litigating a mechanics lien is complex for both contractors and property owners, making expert legal assistance indispensable.