CALIFORNIA MECHANICS LIEN RESOURCES 

Below are two links to government website which talk about which forms to file in order to create, perfect and exercise your mechanics lien rights:

In the State of California, a Mechanics Lien Claimant has the ability to start the timeline of their Mechanics Lien rights from 20 days before they file a 20 day preliminary notice of completion.  This means that within 20 days of starting a project as a contractor or sub-contractor, to make sure you preserve your right to file a mechanics lien, you should file a 20 day preliminary notice of completion.  If you wait until the 30th day of work to file the preliminary notice of completion, for example, you will only be able to file a mechanics lien that covers from the 10th day onward.  It is mandatory that you file a 20 day preliminary notice of completion in the State of California if you wish to file a mechanics lien.

There are 2 exceptions for needing to file a 20 day preliminary notice of completion, they are: 1) you have contracted directly with the owner 2) you are a laborer for wages.  In these two instances you do not need to file a preliminary notice of completion, but you may still and it is not a bad idea to still file.  It is a good idea always to file a 20 day preliminary notice of completion.  A 20 day preliminary notice of completion is served on the property owner, the lender and the general contractor (if you are a sub-contractor or a supplier)

The very best reason to keep in mind for filing a 20 day preliminary notice of completion is this:  The owner must serve notice to all people who have a properly filed 20 day preliminary notice of completion upon filing their notice of completion.  The owner is supposed to file their notice of completion within 10 days of actual completion, and the owner then has 10 days to serve notice to all who have filed a 20 day notice of completion.  If the owner does not follow this timeline, then all contractors and sub-contractors have 90 days from cessation of work to file their mechanics lien and serve statutory notice. 

The next step in the mechanics lien process is completing the work and then filing a notice of completion yourself.  You may file the notice of completion once you have finished all of the work for which you contracted.  You may also file a notice of completion if you no longer have the ability to finish all of the work for which you contracted (ex. Shutdown of project, Personal Termination).

There are two timelines with regards to when a mechanics lien must be filed.  Also it is required that you serve statutory notice of the filing on the owner, lender and contractor.  The first timeline is when there is no notice of completion filed, and the second is when there is a notice of completion filed.

When there is no notice of completion filed, it is mandatory that you file your mechanic’s lien and give statutory notice within 90 days of completion of work.

When there is a notice of completion filed, it is mandatory that a sub-contractor file their mechanics lien and give statutory notice within 30 days of completion of work.  A contractor must file their mechanics lien and give statutory notice within 60 days of completion of work.

Be careful not to create a premature mechanics lien on the property because it will be required of you to remove the lien.  This can create a situation where you loose your right to file a proper mechanics lien.

Timelines are with respect to each individual property and not an overall project with a set of individuals or businesses.  You must file a 20 day preliminary notice of completion for each property and a notice of completion for each property in order to preserve your mechanics lien rights. 

It is not required that you file a mechanics lien.  You have the option to not file a mechanics lien.  It is just that you loose the option to file a mechanics lien if you do not file your 20 day preliminary notice of completion and your final notice of completion.

Once you have a properly filed mechanics lien, it is required that you begin a lien foreclosure lawsuit within 90 days of filing the mechanics lien.  If you do not begin a lien foreclosure lawsuit within 90 days of filing the mechanics lien, you are required to go through the legal process of removing the “stale” lien.  If you do not remove the “stale” lien, you may become liable to the owner for the cost they incur in the process of petitioning the court to remove the “stale” lien.

Mechanics lien foreclosure lawsuits cannot be filed in small claims court and as such it is highly advisable that you hire an attorney to file the lawsuit for you and that you do not attempt to file the lawsuit on your own.

FOR THAT REASON I MENTION LEGALSHIELD RIGHT HERE BECAUSE I CARE ABOUT YOUR BUSINESS AND I BELIEVE LEGALSHIELD CAN HELP YOU AND YOUR EMPLOYEES IN PROBABLY THE MOST EFFICIENT WAY POSSIBLE.

I sell LegalShield business plans which start at $45 if you have under 10 employees, and are $155 if you have under 100 employees.  If you are a sole-proprietor sub-contractor, work from home and have no employees then you are covered under a personal plan with an additional home based business supplement which costs $45 to sign-up and then $35 a month ($25 plus the $10 home based business supplement).

LegalShield gives their members unlimited legal advice phone calls, will review an unlimited number of contracts and documents (limit to the number of pages depending on the plan), and the most important with respect to filing a mechanics lien foreclosure lawsuit, LegalShield gives all of their members a 25% Preferred Member Discount off of the already discounted price of filing a lawsuit.  LegalShield Partner Law Firms give LegalShield Members discounted rates because of the large bulk amount of business they receive through LegalShield.  It is an awesome way to save a good amount of money on the cost of legal fees. 

If you are interested in looking at the different LegalShield plans, you can view them at www.LegalShield.com/hub/jamespolk (click the business tab and then click small business for the business memberships.  Click personal and then check home based business supplement if you are a sole-proprietor without employees unless you plan on expanding upwards to having employees.)  A good video about LegalShield and IDShield can be found at www.JamesPolk.US.  There is a difference between the personal plans and the business plans (you can purchase both, but the smallbiz 10,50, or 100 is the most common for contractors and sub-contractors, followed by the personal plan with a home business supplement.)

If you have any questions about the mechanics lien process, documents required, or have any questions about LegalShield, please contact me on my contact page.

Below are two links to government website which talk about which forms to file in order to create, perfect and exercise your mechanics lien rights: