California Mechanics Lien Laws

What is a Construction Lien?

A Construction Lien (also called a “Mechanics Lien” or sometimes a “Contractor Lien”) is one of the most powerful legal tools that a Direct Contractor, Subcontractor, Material Supplier, Professional, or Laborer has to secure payment for the unpaid labor, service, equipment, or materials it provided to a privately owned (as opposed to state or federally owned) Property.  In California, a Mechanics Lien is referred to as a “Claim of Mechanics Lien” or simply a “Lien.”  When properly recorded with the County Recorder’s Office in the county where the Property is located, the Construction Lien creates an encumbrance (or a “cloud”) on the Property’s title, thereby giving notice to Lenders and potential purchasers that someone (referred to as the “Claimant”) claims a debt is owed to it for work provided to the Property.  Lenders typically will not provide permanent financing nor will they refinance a Property that has a Mechanics Lien recorded against it.  As such, Property Owners (especially on new construction) will need to resolve the Mechanics Lien prior to completion of the Project or before the Property is refinanced or sold.  Further, if the debt is not paid, you may enforce the Construction Lien by filing a Lawsuit to foreclose (sell) the Property.  It has become the practice, as opposed to the exception, for all categories of contractors to routinely serve and record all necessary Construction Lien Documents as a means to protect their unpaid invoices. Do you have a Construction Lien question?

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