If you’re hiring someone to do improvements or renovations on your property, you could be at risk for a mechanics lien. These liens can occur even if you fulfill your payment obligations, which means you would need a real estate or foreclosure defense attorney at your side.
Mechanics liens have gone up by 40% since COVID, and Oakland is no exception. Lien laws in California are designed to protect laborers and supplies first, before homeowners.
What is a mechanics lien, and how do California lien laws work? Read on to learn about the ins and outs of this potential legal pitfall.
What is a Mechanics Lien?
A mechanics lien is a legal claim filed on a property title when contractors and subcontractors are not paid in full for the work they perform on the property. A mechanics lien is also known as a construction lien.
In some cases, the property owner pays for work in full, but the contractor fails to pay their subcontractors, laborers, and/or suppliers. The unpaid parties can still file a lien on the property, even though the owner didn’t miss a payment. If this is the case, you need to reach out to an attorney in the Oakland area right away.
How Mechanic Liens Can Affect You
The property generally cannot be sold or refinanced by the owner without settling the lien first. The owner may even lose their property to lien foreclosure.
Owners can usually hire a lien attorney and sue the contractor to force or recoup the missed payments. The lien process is generally faster than a civil dispute process, however, and the resulting settlement might be too late.
To avoid losing their home, the owner could be forced to pay for property work twice. They must then take up their loss in court.
The owner can also check to see if the claim meets their state’s lien laws. If the claim doesn’t satisfy certain conditions, it won’t be enforceable.
California Lien Laws
Lien procedures are found in California Civil Code 8410-8424, “Conditions to Enforcing a Lien.” These conditions must be met for a lien to be enforceable.
Preliminary notice must be given 20 days from the first day of providing work or supplies. The claimant must be able to prove they gave preliminary notice.
Direct contractor deadlines are:
- 90 days after completion, or
- 60 days after the owner records a notice the work has finished or stopped
Other claimants must file:
- After the claimant stops providing their service, or
- 90 days after project completion, or
- 30 days after the owner’s notice
Errors in a lien filing don’t automatically invalidate the claim. A claim is invalid when services not provided to the property are included on the lien, or when the lien’s intent is to defraud the owners.
California Mechanics Liens
A mechanics lien has additional conditions according to Civil Code 8416. It must be written, signed, and verified. The claim must include:
- Claimant’s demands
- Owner’s name
- Claimant’s provided work
- Claimant’s employer
- Site identification
- Claimant’s address
- Proof of service affidavit
- Mechanic’s lien statement (provided by 8416)
The claim must also be served to the owner. This means the owner must receive their notice through verifiable means, like registered mail.
If the claimant fails to properly serve the owner, the claim is unenforceable. You can also add protective clauses to your construction contract so you aren’t held liable if the contractor fails to pay.
Protect Yourself and Your Property from Real Estate Disputes in Oakland
Lien laws don’t always protect a homeowner. Even if you’re 100% responsible and pay for the work done on your Oakland area home, you can still face paying extra money and a risk to your property.
If you’re struggling with a mechanics lien dispute, we’re here for you. Our law firm has the necessary experience and expertise to protect your money and your home.
Connect with us online, by phone, or by email to get started. Estavillo Law Group is always ready to help you win your case.