The Dreaded Mechanic’s Lien: Learn Four Important Factors of the Mechanic’s Lien Law in California
When you are buying or selling a property, ideally, the entire transaction would go smoothly, from putting in your offer to escrow and beyond. Unfortunately, none of us live in a perfect world, and issues can and do arise. In the world of escrow, one of the most frustrating surprises is often the mechanic’s lien.
Keep reading to learn four essential factors that will help you better understand the law in California. At Neighborhood Escrow, we have worked on countless cases with these and other liens against the property.
A Notice of Non-Responsibility Might Be Necessary
In the event that there is construction on the property, but the owner of the property is not responsible for it, then they must execute and post a Notice of Non-Responsibility. It must be posted on the property and recorded at the county recorder’s office. The owner has ten days from the date they became aware of the work to file this form. For example, if they rent the property and a tenant is in charge of their own construction project on the property.
A Preliminary 20-Day Notice
When the person who completed construction (aka the claimant) believes that they have a claim against the property, they must file a preliminary 20-day notice. This notice does not have to be recorded with the county recorder but instead is simply filed with them. The law requires that it be filed within 20 days of the start of the claimant’s work – hence the name of the notice.
A Notice of Completion
Within ten days of the work being completed, the person who ordered the work to be done will record a Notice of Completion (NOC) at the county recorder’s office. If it is properly recorded and valid, it will give constructive notice to any claimants.
Depending on whether a potential claimant is a contractor or subcontractor, and depending on whether or not a construction loan was part o the deal, the claimant will have a specific amount of time to file and record their claim. It could be as little as 30 days, as long as 120 days, or 60 days.
A Recorded Mechanic’s Lien
When a Mechanic’s Lien is recoded correctly, it is only relevant for 90 days. This is the amount of time that the claimant has to file an actual lawsuit. The mechanic’s lien is just a notice that the claimant believes they have a claim and intends to act on it.
Hopefully, this has helped you better understand some of the issues affecting mechanic’s liens. Check out these other escrow resources for more information.a