- The Preliminary 20-Day Notice
All claimants except the general contractor or a person performing actual labor for wages must give a Preliminary 20-Day Notice or forfeit their lien rights. In other words, if you contract directly with the homeowner, or if you contract directly with the homeowner for labor, the Preliminary 20-Day Notice is not required. (Cal. Civil Code § 3097.) If you are hired by the general contractor, the Notice is required.
The Notice must be given not later than 20 days after the claimant has first furnished labor, services, equipment or materials to the job site. (Cal. Civil Code § 3097, subd. (d).) Notice may be given before the claimant commences work, or delivers materials. (Brown Co. v. Appellate Department (1983) 148 Cal.App.3d 891.) That is, Notice may be given after the contract is signed, but before work is performed, or before materials are delivered.
- The Mechanics’ Lien
If a Notice of Completion, or a Notice of Cessation has been recorded, the lien claimant has 60 days to record a Mechanics Lien from the date of the Notice.
If no Notice of Completion, nor a Notice of Cessation has been recorded, the lien claimant has 90 days after the completion of work to record a Mechanics’ Lien. (Cal. Civil Code § 3115.)
If a Notice of Completion, or a Notice of Cessation has been recorded, the lien claimant has 30 days to record a Mechanics Lien from the date of the Notice.
If no Notice of Completion, nor Notice of Cessation has been recorded, the lien claimant has 90 days after the completion of work to record a Mechanics Lien. (Cal. Civil Code § 3116.)
The lien must be filed in the Recorders Office in the county where the work or improvement is located.
- Action To Foreclose On Mechanics’ Lien
An action to foreclose on a properly recorded Mechanics Lien must be filed within 90 days from the date of the lien. (Cal. Civil Code § 3144, subd. (a).) If the claimant fails to commence an action within 90 days, then the lien automatically becomes null and void. (Cal. Civil Code § 3144, subd. (b).)
An action must be filed in Superior Court, an action to foreclose on a Mechanics’ Lien cannot be filed as a small claims action.
A claimant is entitled to the amount of the lien, plus interest and the costs of filing the lien. Attorneys’ fees are not recoverable in an action to foreclose on a Mechanics’ Lien. However, if the claimant has a written contract with the debtor, and the contract contains an attorneys’ fees provision, then a breach of contract cause of action can be coupled with the cause of action to foreclose on a Mechanics’ Lien, and attorneys’ fees may be recoverable.
In addition, after the filing of the complaint, the claimant is advised to record a Notice of Lis Pendens in the office of the county recorder of the county in which the property is located. A Lis Pendens will put any subsequent purchaser or encumbrancer of the property on notice of the litigation.
Our firm has significant experience in filing actions to foreclose on Mechanics’ Liens, and filing Lis Pendens. Please do not hesitate to contact us if you require assistance in these matters.
Please be advised that the aforementioned rules apply only to private works of improvement, different rules apply to public works.