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Mechanic's lien: Overview, prevention and remedial action - III

Over the past few weeks, posts on this blog have discussed mechanic's lien in California and how it can be prevented. This third and final post in this series will discuss the course of action for a property owner in the event a mechanic's lien is filed. While the complete set of laws related to mechanic's lien can be found in Sections 8000 to 9556 of the California Civil Code, this post is meant to provide the reader with an overview of the remedial actions for an invalid mechanic's lien in California.

The first step after receiving a notice for mechanic's lien is to check whether that lien is valid or not. Some common reasons behind an invalid lien filing include situations such as when the work has not been completed; when some materials that were required for the work were not actually supplied; and when an eligible stakeholder not file the lien within the time stipulated by law. A detailed checklist to determine the validity of a mechanic's lien is available on the California Contractors State License Board website.

Even if a lien is found to be invalid, it stays in the county records and on the property until remedial action is taken. This ultimately results in the property owner not being able to sell, refinance or obtain a line of credit against the property. Therefore, the property owner needs to send a written request to the lien filer and explain all the deviations from the checklist that was observed. That request should ask the filer to remove the lien, failing which the filer may be liable to bear the legal costs that court may ask the filer to pay in the event the property owner takes the help of an attorney to have the lien removed.

All through this exercise, it is important for a property owner to preserve all documentation. In the case a filer does not remove the mechanic's lien even after a property owner takes these steps, that owner is entitled to go to the court to have the lien removed. The court process, however, is complicated and therefore, it is often beneficial for the property owner to engage the services of an attorney in order to get the court to pass a decree that releases the property from mechanic's lien.

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Retz & Aldover LLP
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