Have You Updated Your Mechanic's Lien Procedures in California?

Now that the holiday frenzy has wound down, many have overlooked the necessity of updating their mechanic’s lien procedures in California. Effective January 1, 2011, prevailing California law imposes new requirements and notice procedures for effective lien actions on mechanic’s lien claimants. These changes immediately affect the preparation, service, and recordation of mechanic’s lien claims. California Civil Code § 3084(a)(6)-(7) will mandate that a valid claim of lien, also known as a mechanic’s lien, must contain the following information in addition to what the law currently prescribes:

                          Particular language in 10-point boldface type entitled “Notice of Mechanic’s Lien” as set forth precisely in the statute, and

 

                          Affidavit of proof of service on the owner or reputed owner (and construction lender or original contractor in some cases, but best practices suggest that providing notice to all categories may provide an increased opportunity for payment).

 

If you have been using old forms, or even current commercially prepared forms, you should verify that they will not be outdated come January 1. The law makes clear that a failure to meet the requirements would cause the mechanic’s lien to be unenforceable as a matter of law. Your counsel should make certain that any preprinted form or custom form captures the new requirements of the Civil Code.

 

Further, the amendments affect the recordation of a lis pendens for a suit to foreclose a mechanic’s lien. The filing, which was previously performed as “good practice,” is legally mandatory beginning January 1, 2011 under Civil Code § 3146. The lis pendens must be recorded within 20 days after filing of the foreclosure action, and best practices dictate that counsel should record it immediately after the action is filed to preserve priority.  You can find the legislation here.

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