How Big of a Deal is a Mechanic’s Lien? Get the Facts from an Escrow Company
When purchasing or selling a home, the entire transaction should run as smoothly as possible, from the time you submit your offer to the time you close escrow. Unfortunately, we do not live in a perfect world, and problems do happen. The mechanic’s lien is one of the most aggravating surprises in the world of escrow.
Continue reading to learn four key points that can help you better comprehend California law. We have worked on many situations involving these and other liens against the property at Neighborhood Escrow.
It’s possible that a Notice of Non-Responsibility is required
If there is construction on the property but the owner is not accountable for it, a Notice of Non-Responsibility must be signed and posted. It must be displayed on the property and documented with the county recorder. This document must be filed within ten days of the owner becoming aware of the work. For instance, if they rent the land and each renter is responsible for their own building project.
A 20-Day Preliminary Notice
When the individual who finished the work (also known as the claimant) feels they have a claim against the property, they must submit a preliminary 20-day notice with the court. This notification is not required to be registered with the county recorder, but is instead filed with them. The legislation mandates it to be filed within 20 days of the claimant’s first day of employment, thus the notice’s name.
A Completion Notice
The person who requested the work to be done will register a Notice of Completion (NOC) with the county recorder’s office within ten days of the work being finished. It will offer constructive notice to any claims if it is properly documented and legitimate.
Whether a potential claimant is a contractor or a subcontractor, and whether or not a construction loan was involved, the claimant will have a certain length of time to submit and document their claim. It may be as short as 30 days, as long as 120 days, or even as long as 60 days.
A Recorded Mechanic’s Lien
A Mechanic’s Lien is only valid for 90 days after it has been properly recoded. This is the time limit in which the claimant has to bring a lawsuit. The mechanic’s lien is just a notification that the claimant feels they have a claim and plans to pursue it.
Hopefully, this has given you a better understanding of some of the mechanic’s lien difficulties. For further information, look at these other escrow sites.
