New Requirements for Mechanic's Liens in 2011

As of January 1, 2011, claimants recording mechanic's liens have new requirements to follow in order to have an enforceable mechanic's lien.

1. Serve Notice of Mechanic's Lien.

The first requirement is that you have to serve the mechanic's lien and a new form entitled a "Notice of Mechanic's Lien" upon the Owner by registered mail, certified mail, or first class mail with a certificate of mailing. The "Notice of Mechanic's Lien" that must accompany the Mechanic's Lien, reads as follows:

NOTICE OF MECHANIC’S LIEN
ATTENTION!

Upon the recording of the enclosed MECHANIC’S LIEN with the county recorder’s office of the county where the property is located, your property is subject to the filing of a legal action seeking a court-ordered foreclosure sale of the real property on which the lien has been recorded. That legal action must be filed with the court no later than 90 days after the date the mechanic’s lien is recorded.

The party identified in the mechanic’s lien may have provided labor or materials for improvements to your property and may not have been paid for these items. You are receiving this notice because it is a required step in filing a mechanic’s lien foreclosure action against your property. The foreclosure action will seek a sale of your property in order to pay for unpaid labor, materials, or improvements provided to your property. This may affect your ability to borrow against, refinance, or sell the property until the mechanic’s lien is released.

BECAUSE THE LIEN AFFECTS YOUR PROPERTY, YOU MAY WISH TO SPEAK WITH YOUR CONTRACTOR IMMEDIATELY, OR CONTACT AN ATTORNEY, OR FOR MORE INFORMATION ON MECHANIC’S LIENS GO TO THE CONTRACTORS’ STATE LICENSE BOARD WEB SITE AT http://www.cslb.ca.gov/

This notice must be in at least 10 point boldface type. The letters of the last sentence must be in all caps, except for the website address at the end.

2. Prepare Proof of Service Affidavit

You also need to prepare a Proof of Service Affidavit completed and signed by the person serving the Notice of Mechanic's Lien. The affidavit needs to show the date, place and manner of service and facts showing that the service was made in accordance with the requirements for service. The affidavit must also show the name and address of the person or persons upon whom a copy of the mechanic's lien and Notice of Mechanic's Lien was served. If the recipient is an entity, like a Corporation, Limited Partnership, General Partnership, Limited Liability Company, or Limited Liability Partnership, then the affidavit should also note the title or capacity in which a particular person was served. Here is what the affidavit should contain:

I, [name of person serving], declare:

I served a Notice of Mechanic's Lien in the form specified by California Civil Code section 3084(a)(7) and a true and correct copy of the Mechanic's Lien that is being recorded on the date, place and in the manner of service set forth below:

Date of Service: [Date of Mailing]

Place from which Notice Mailed: [Address of Sender]

Manner of Service: [check one]

__ Registered Mail

___ Certified Mail

___ First Class Mail with Certificate of Mailing

Postage prepaid, addressed to the following address:

[name and address of Owner or Reputed Owner]

[If an entity, include title or capacity, i.e., President, or Agent for Service of Process]

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on _______________ at [City affidavit executed], California.

___________________________

[Signature of Person Serving Notice]

This affidavit needs to accompany the Mechanic's Lien that is being recorded with the County Recorder's Office.

3. Record a Notice of Pending Action

As was the case before these changes were made, you need to file a complaint to foreclose on the Mechanic's Lien within 90 days after recording the Mechanic's Lien. After the complaint is filed, you are now required to record a "Notice of Pending Action" with the County Recorder within 20 days from the date of filing the complaint. The process of recording a "Notice of Pending Action" is complicated. If you are trying to do this yourself, it is even more complicated. If you are doing this yourself, you need to have a judge approve the Notice of Pending Action before you file it. Attorneys who record a Notice of Pending Action are not required to do this. You then need to mail the Notice to all owners of the property, and to all parties to whom the Mechanic's Lien is adverse (typically, the contractor you are in contract with and the prime contractor). You need to send this by registered or certified mail. Then, take the Notice to the Recorder's Office in the same County where you recorded the Mechanic's Lien and get it recorded. Then, you need to immediately take the recorded Notice back to the Court clerk in the County where the lawsuit was filed, and file it with the Court, with a proof of service on all parties.

The requirements for Mechanic's Liens have been substantially revised by the California Legislature. The remaining changes will take place on July 1, 2012.